High-performing companies are increasingly taking their ESG responsibilities seriously. They appreciate that paying attention to the longer term, to stakeholder perceptions, and to the social and environmental consequences of their products is good for business as well as the planet.
This process has been underway for some time – with encouragement from investors, governments, communities and customers – but is expected to be accelerated by the recovery from the COVID-19 pandemic. If COVID-19 has taught us anything, it is that we should prepare for the worst rather than hope for the best.
The post-COVID-19 world is likely to be one of inclusive capitalism, where environmentally-conscious, purpose-led companies prevail. Consumers increasingly make purchases based on how brands treat their staff, whether they respect the environment and if they support local communities. Shareholder capitalism is being replaced by stakeholder capitalism.
As a result, there have been widespread calls for a “Green Recovery” from COVID-19, using economic stimulus packages that prioritize environmentally-friendly infrastructure projects, and to “Build Back Better.”
Some companies have led the way by appointing chief sustainability officers (CSOs), who have become one of the newest members of the C-suite. CSOs drive the formulation and execution of an organization’s sustainability strategy, with some, though far from all, reporting to the chief executive.