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Good morning.<\/p>\n
Over the past year and a half, I’ve been watching to see what effects the political backlash against ESG might have on corporate behavior. And so far, I haven’t found much. Companies are certainly becoming more cautious about speaking out on controversial social and political issues, hoping to stay out of the political fray. But most corporate leaders I speak with remain committed to efforts to address climate change, increase diversity and inclusion, and address social inequalities.<\/p>\n
However, our new survey of Fortune 500 CEOs got me thinking. This is the question we asked:<\/p>\n
As you know, there has been a significant political backlash against ESG and “woke” capitalism in the past year. Which of the following statements most closely reflects your view of this development?<\/p>\n
1. This was a helpful fix. Environmental, social and governance (ESG) issues were unduly affecting business decisions.<\/p>\n
2. This is an unfortunate development. Business leaders should be encouraged to consider environmental, social and governance aspects in decision-making.<\/p>\n
CEO responses were almost evenly split: 48% for No. 1 and 52% for No. 2. This suggests that attacks on ESG by people like Florida Gov. Ron DeSantis and the editors of The The Wall Street Journal has found its mark. . I suspect 48% of people also express frustration that activists and regulators have gone too far, attacking oil companies for increasing production in response to Russia’s invasion of Ukraine or proposing overly comprehensive rules to report on “Scope 3” carbon emissions from suppliers and customers. . And there is certainly reason to argue that the acronym \u201cESG\u201d is a confusing and bureaucratic framework for measuring social impact.<\/p>\n
But none of this changes my view that the increased focus on social impact by corporations in recent years has been a necessary and welcome development. It is not primarily driven by calculation or political posturing, but rather by increasing demands from employees, customers and investors that companies address the fundamental challenges of our society. And the best companies are increasingly finding that doing so is good for their business (and ultimately, their shareholders). <\/p>\n
So watch this space. The political environment is sure to get noisier as the next election approaches. But the opportunity for companies to better demonstrate their value to society will also grow. And my bet is that the companies that do it best will prevail.<\/p>\n
More news below. We’ll be releasing the rest of the Fortune 500 CEO survey results in the coming weeks.<\/p>\n