The interest in ESG and responsible investing continues to gather momentum, with events and forums being held in cities across the world last week, from Dublin to Taipei.
This is a positive development. However, there is one caveat. Every year, well intentioned people attend events, proclaiming their feelings of leaving ‘inspired and motivated’. Once back into the grind of regular life that euphoria wanes rapidly and too often the action needed to bring change fails to materialise. Reasons on why not to move forward, beyond the status quo, begin to emerge.
I think it is worth bearing in mind the words of the Stoic philosopher Seneca as we think about how best to cultivate the required follow-through over the coming months and years.
In one of his letters to his friend Lucilius, Seneca wrote “the perfection of wisdom is what makes the happy life”, a pursuit that he argues must be lived every day. “Philosophy is not an occupation of a popular nature, nor is it pursued for the sake of self-advertisement.”
In the same vein, ESG is not a periphery subject that we can visit now and again, or something that we merely pursue for self-promotion, be it an individual or an organisation. It requires genuine conviction for it to be meaningful.
Seneca writes on the need for building one’s conviction to philosophy and the perfection of wisdom:
“Yet, this conviction clear as it is, needs to be strengthened and given deeper roots through daily reflection; making noble resolutions is not as important as keeping the resolutions you have made already. You have to persevere and fortify your pertinacity until the will to good becomes a disposition to good.”
The Stoic legend could easily have been talking about strengthening our commitment to ESG, the conviction needed to turn individual intent into meaningful action.
ESG is a way of thinking as much as applying a set of rules or principles, an internal compass that can help decision making at all levels. In line with Seneca’s point and in the context of implementing ESG, that “will to good” will only become “a disposition to good” when ESG becomes part of the consciousness of decision making.
This applies across business, investments and public policy, with those at the top carrying the most responsibility. It is a cultural change which is needed, something that requires leadership, conviction, cultivation and authenticity.
The two biggest challenges I see to this cultural shift are:
1) closing the knowledge gap around the practical understanding and application of ESG
2) changing the linear mindset in which people view ESG, something which limits its potential to make a difference.
These are not easy challenges to overcome. As one trustee recently put it to me, regarding his preference to stay on the sidelines with respect to ESG: ‘it is safer in the middle of the pack than to lead. I will wait for the consensus to develop, as most trustees will’.
We don’t have time to wait, considering the ecological crisis we face. This is a great opportunity to help shape the consensus. Leadership is needed now more than ever.
That is why I set up ESG Ireland; to help expedite the cultural change needed for the security of our future and that of generations to come. Along this journey I have been encouraged by people and organisations who share my desire to make a difference. To be part of change for the better.
I have always been convinced one person can make a difference, but to inspire cultural change you need to build a community. That process has now started, and I would encourage all stakeholders to get in touch to learn more about joining the ESG Ireland community.
Be part of the solution.
Vincent McCarthy, CFA
(Subscribe to ESG Ireland Insights, including “The ESG Factor”, the new quarterly newsletter developed to provoke thought and motivate action on ESG. Email: Insights@ESG.ie)