With the rush of money into ESG investment funds — more than $1 trillion in the last two years — it’s easy to think everyone clearly sees the business value of sustainability. But many leaders still see an inherent trade-off between choosing a more sustainable future and achieving business growth and profit. They see ESG-related spending — a capital expense to reduce energy use, opting for renewable energy, paying living wages, and so on — as purely cost, not investment. With little resistance, CEO’s will spend money on IT, training, new factories, R&D, and more; but when it comes to investing in the future of the business and humanity, they hesitate.
Yes, Investing in ESG Pays Off
It’s absurd to have to justify investing in our very survival — but here are five (more) reasons it’s a good business decision.
April 13, 2022
Summary.
Why are leaders so reluctant to make ESG investments? Even those who know they’ll pay off are reluctant to do so, for five key reasons. The authors outline each — the numbers hide the truth about the real cost, our biases trick us, we focus on short-term benefits, we think about costs in silos, and we miss the bigger existential costs — and propose a solution for getting past these flawed mental models.