Sustainability has its enemies

The US regulator, the Securities and Exchange Commission, hasn't escaped being targeted by ESG deniers. This is not a transient situation or just a domestic affair; these companies have global reach and significant weight in stock markets and asset management.

If this is the position of the greatest country in the world, what can we expect from the rest of the countries, especially the West, whose economies have been shaken and battered by inflation and raising interest rates?

Restless giants

For companies, especially multinational giants, the story is even more brazen.

They are becoming increasingly tired of years of conferences and summits about "responsible investment", adjusting strategies to incorporate sustainability requirements, social, and ethical standards and aggressive promotion campaigns. The idea of reflecting ESG criteria in investment portfolios is also wearing thin.

On Wall Street, there is a growing trend to see ESG requirements as potential risks to corporate survival, or more correctly, corporate profits.

It includes some of thelargest asset managers in the world – including BlackRock and Blackstone, private equity companies, and brokers – and amounts to warning of an uprising within capitalism. It sees ESG and sustainable investment as a real threat to financial performance.

And the sheer size of scale of the firms in this backlash mean they touch many countries, markets and lives.

Established companies involved in the backlash are some of capitalism's biggest names, including Apple, Amazon, Microsoft, and Disney. They once made promises to address the climate crisis.

Now, they rally along with other companies and groups to fight the extent of climate legislation proposed by Democrats, who set up a historic 2021 budget of $3.5 trillion for unprecedented action to combat global warming.

Too expensive

It seems to be a belated, but explicit, admission that the fight against climate change is too expensive for countries and businesses to afford amid the global economic crisis, the scarcity of funding, and the need to double profits to avoid business decline or collapse.

But it also looks increasingly like a public capitulation to indulgence in climate change, with logic that implies future generations should be left to endure the hunger, disasters, and horrors that await them.

If we accept the idea reported by Bloomberg in the Harvard Business Review that the ESG scale does not really assess a company's impact on the environment and society and rather outlines the potential impact of environmental measures on the company and its investors, then we could be looking at the basis of a wider failure

And that failure would be profound. It would mean profit and greed would overshadow the potential scale of damage to the planet.

In a survey conducted by PwC in December, global investors place environmental, social, and institutional governance among their top five investment priorities.

But 81% of them said they shouldn't lose more than one or less than one percentage point of their returns in order to agree to proceed with the adoption of ESG goals – both those related to the company and those that have a positive impact on the community.

Those who follow the current economic crisis and its severe repercussions may sympathise with the ESG backlash.

But they will inevitably miss that a large part of what we're living through now is an expression of past failures, evasion of responsibilities, and circumventing principles and rules of sustainable businesses.

If we continue to do so, we'll only reap more tragedies and missed opportunities at a time when conscientious vigilance, concerted efforts, and brilliant solutions cease to work anymore.

Deloitte estimates the cost of not tackling climate change at $178 trillion globally by 2070, compared with $43 trillion in economic gains that will come into being over the next five decades if countries unite to accelerate the shift to zero carbon – this represents a growth of 3.8%.

Between Milton Friedman's profit-driven economy and a green economy based on sustainability comes the role of a conscious individual, a role that governs corporate choices, their future, and the policies and laws of nations.

World Environment Day on 5 June came as a reminder of the importance of this debate and the need to keep it alive while celebrating the achievements already made.