Recently, a paper from renowned London Business School Professor Alex Edmans proposed the phrase “rational sustainability” as a replacement for ESG to change how we frame the concepts and conversations. The paper has been very popular in the media, press and from other practitioners. I have huge respect and admiration for Alex and his work – especially in encouraging professional skepticism and intellectual rigor to claims of ESG value and benefits. His blog May Contain Lies is excellent reading, as is the paper Rational Sustainability – um, if you strip away the words “rational sustainability”.
Yeah, I know, but bear with me…
Alex’s main point is that the term “ESG” has become far too political although the concept is very much valid. One of the best quotes in the paper (and there are many!) is:
“Today’s environment calls for a bland term that goes back to basics.”
Alex says the phrase “rational sustainability” doesn’t have political baggage, but I’m not sure it’s the answer. Although he argues otherwise, each word is fairly ambiguous; putting them together only amplifies confusion and creates yet another buzzword. Rather, we should impart simplicity and neutrality. Consider this:
You are preparing for a 30-minute meeting with an executive of a mid-market, 100-old Rust-belt manufacturing company. The culture is rooted in manufacturing, profitability and increasing share prices. The company promotes ESG (or whatever you care to call it), but it isn’t prioritized and Operations pushes back against the initiatives. Your time is limited, so communicating efficiently is critical. Will “rational sustainability” be effective in that setting? Or would you be better off talking in traditional business terms?
Some might consider this an extreme, hypothetical or overly-generalized example. Using jargon and leading-edge terminology may be less of a concern in tech companies and those that are innovators and leaders, but the majority of US companies simply are not in that category. There are also executives who were around in the 1990s and still roll their eyes at “sustainability.”
ESG has become almost incomprehensible in what it covers, quantifying its value, and even deciding what label to put on it now that ESG has fallen out of favor (somewhat). Misinformation, misinterpretation, cherry-picking and confirmation bias are prevalent. If ESG professionals want to move the needle, we must seriously reconsider how we convey messages to those outside our self-selected ESG echo chamber. Simplicity is the key – and the ultimate sophistication. In another blog, I’ll provide some suggestions for doing this.
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