Achieving ESG goals is about doing good business, not getting woken up, say CEOs

CEOs need to worry enough about running complex companies in a challenging environment and a likely recession without having to contend with political figures who attack them as “bright CEOs” for their focus on diversity and sustainability, a group of them said during one wealth Conference in Florida this week.

This so-called “stakeholder capitalism” they advocate is simply that companies focus on doing good by doing good, and was the focus of a panel at wealth‘s The CEO Initiative Summit Wednesday in Palm Beach, Fla. State Gov. Ron DeSantis has repeatedly targeted bosses looking to achieve ESG (environmental, social and corporate governance) goals, one of many Republican politicians targeting America’s companies focused on social and environmental issues . In some states, politicians have even gone so far as to ban state funds from investing in ESG-focused companies.

But CEOs at the conference say stakeholder capitalism merely reflects capitalism’s ability to revitalize itself and secure its future. It’s also about attracting talent and paying attention to what employees, investors and other stakeholders expect from companies today.

“It’s very important to listen to them (employees and other stakeholders) and understand their expectations because they really want to improve a company they want to work for and make an impact on the environment and the communities they are in. exercise,” said Chano Fernandez, co-CEO of Workday. “There is a great correlation between purpose and stakeholder capitalism and good deals.”

Schnitzer Steel Industries CEO Tamara Lundgren said that the basic idea of ​​stakeholder capitalism is “nothing new” and that many companies have understood the value of good performance by their employees and society in general as being beneficial to business. but that it should remain at the top of a company’s priorities.

Penny Pennington, Edward Jones’ managing partner, said the first thing prospective employees look for when considering job opportunities is the financial firm’s annual impact report. At the same time, Pennington said, it is important for a company to focus on what social issue or issue it is trying to address, focusing on those directly related to its business, rather than trying to address all of society’s ills . In the case of Edward Jones, Pennington says, it was financial security and wealth inequality.

“So financial security is our lane. And thinking long-term means that equity and access to financial education and advice are absolutely central to our longevity. So it’s important. Social mobility must be important to us,” said Pennington.

As for Moynihan, he said whatever the bank does will bring criticism. Bank of America invests in fossil fuel companies, but it also invests in renewable energy companies, he gave as an example. Ultimately, Moynihan said, capitalism must be flexible to respond to the societal concerns of the era – whatever label critics choose to throw at CEOs – in order to survive and remain what the panel delegates called the best economic system that was ever invented.

“If we don’t do that, we can lose,” Moynihan said. “Capitalism works. It can be weird, it can be tough and it can go in all sorts of directions, but it works.”

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