Balancing Purpose with Profit: ESG in the Spotlight

It’s been more than 10 years since ice cream manufacturer Ben and Jerry’s became a B corp., a label that positions the company as a “force for good.” Becoming a force for good is no easy matter.

The latest salvo in the debate over the role of the corporation in society was struck by Jamie Gamble, a former lawyer for the insurance company American Insurance Group during the financial crisis and beyond. He proposed in an essay that modern executives are “legally obligated to act like sociopaths,” because of settled law for most corporate charters that puts shareholder rights above employees, the environment, customers and the community at large.

Deciding on the right environmental, social and governance approach for your company isn’t easy. Investors expect directors and executive teams at publicly traded companies to understand environmental and social risks and opportunities, according to Martyn Chapman, head of strategy for Nasdaq governance solutions, in a recent video.

“ESG” investing sounds like a great idea. Who can argue with steering your company toward environmental, social and governance practices that reflect the greater good?

But for a company ready to formalize its commitment to ESG, the problem is defining what it means and what qualifies.