The Next Frontier of Responsible Business
The COVID-19 crisis has underscored the need for an entirely new approach to how we produce and consume. While Environmental, Social, and Governance standards of corporate risk disclosure are a necessary first step, the next should be unified metrics enabling assessment and comparison of companies' wider impact on the world.
PARIS – The COVID-19 crisis has revealed how intertwined all of our major challenges are. Biodiversity loss and rising inequalities have contributed to a global public-health disaster and the worst economic crisis in almost a century.
As often happens during such moments, people are suddenly open to changes that they previously would have rejected out of hand. For example, there is a major shift underway in the corporate world, where many managers and investors are eager to adopt more sustainable and responsible practices and business models.
The task now is to ensure that this new mindset itself goes viral. How can we ensure that all businesses are getting on the right page, given that they will remain beholden to the demands and interests of shareholders and investors? One obvious answer is through Environmental, Social, and Governance standards. But ESG offers only a partial solution. Precisely because this field is now booming, it has become crowded and confusing, leading to complaints about “sustainability reporting fatigue.”