ESG Summit explores secret sauce for ethical and profitable economic future
For The Aspen Times
Arn Menconi/For The Aspen Times
The bottom line increasingly is not the bottom line in today’s business world, and ethical leadership no longer is a nice notion, but at least arguably the best way forward.
Plenty of CEOs and others still take issue with the philosophy behind ESG principles — managing for environmental, social and governance issues. But attendees of the Aspen Institute’s annual ESG Summit last week unsurprisingly were all in while temperatures broke all-time records around the world.
ESG presents a framework emphasizing a delicate equilibrium between profitability and social responsibility while embodying the principle of doing good while doing well.
Will Toor, executive director of the Colorado Energy Office, headlined day two of the summit. He guided attendees through the interrelations between ESG principles and duties of public sectors — in Colorado’s case, an equitable energy transition could exemplify ESG principles such as environmental stewardship, social equity, and principled governance, he said.
ESG “isn’t just about doing good for society,” he said. “It’s also an intelligent business strategy.”
This sentiment was demonstrated by rising investor interest in companies prioritizing ESG principles as shareholders invest more money in such enterprises. Toor highlighted its significance by showing that businesses prioritizing ESG principles can garner long-term societal benefits while simultaneously maintaining a competitive edge.
Judy Samuelson, the founder and executive director of the Aspen Institute’s Business and Society Program and author of the book, “The Six New Rules of Business: Creating Real Value in a Changing World,” noted correlations between ESG’s emergence and more expansive societal changes like decreasing trust in institutions and growing economic inequality.
She said the principles were originally used by capital markets but quickly became more pervasive throughout businesses as they quickly encompassed tensions playing out throughout business operations. She proposed that ESG be viewed more as a compelling call to action mandated by capital markets than just another rebrand of corporate social responsibility.
After the summit ended, Colorado Treasurer Dave Young stressed in an interview the significance of ESG principles when making investment decisions. He illustrated how smart investing was like driving, emphasizing its merit as an approach considering ESG metrics rather than simply past performance alone.
Toor then discussed Colorado’s climate goals and efforts to foster a clean energy economy, including their aggressive goal: 50% greenhouse gas emission reduction by 2030 and 90% reduction by 2050. He explained how meeting this target would require shifting toward renewable energy sources such as wind power, electric vehicles, and energy-efficient infrastructure and adopting development strategies that incorporate ESG principles in their designs.
He described Colorado’s transformational steps toward realizing these goals, including incentivizing utilities to close coal plants in favor of cheaper and cleaner sources of power; passing one of the country’s most ambitious electric vehicle standards and striving to make homes and offices more energy-efficient; and incentivizing utilities to install solar panels to increase energy efficiency in homes and offices, measures he said would not only help achieve Colorado’s climate goals but foster an economy that’s resilient and sustainable — thus embodying ESG principles in real terms.
Discussions at the conference presented ESG as an added element of business strategy and public finance and as a blueprint for creating an environment where organizations can thrive financially while contributing positively to global well-being.
Yet the optimism at the conference was balanced by recognition of a growing anti-ESG sentiment. Critics say these principles distract businesses from their primary goal of maximizing profits.
Toor, Samuelson and Young all delivered the same message: ESG is no longer just a glimpse of our future. It has become part of the present. ESG represents an innovative business paradigm that combines profitability, sustainability and ethical governance into one framework.
Samuelson said ESG has become essential to business strategies. She pointed out that ESG has is part of everyone’s language in business, not just those working within sustainability departments.
“ESG is no longer simply about managing risk but how businesses can create value and drive change,” she said.
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