illuminem summarizes for you the essential news of the day. Read the full piece on HBR or enjoy below:

🗞️ Driving the news: ESG (Environmental, Social, and Governance) has faced increasing criticism from both ends of the U.S. political spectrum
• On the left, critics argue that ESG does not go far enough in addressing critical societal issues, particularly climate change
• On the right, it is seen as an attempt to impose a liberal agenda, distorting market operations and free competition

🔭 The context: The ESG debate is emblematic of broader questions about corporate responsibility, with the added complexity of accusations of greenwashing (overstating ESG efforts)
• Greenhushing is also emerging as companies, wary of backlash, avoid publicly discussing their ESG initiatives

🌍 Why it matters for the planet: Despite the controversies, there remains a pressing need for transparency in how companies link financial performance with ESG efforts
• The debate often centers on single materiality (focusing solely on shareholder value) versus double materiality (considering wider societal impacts)

⏭️ What's next: Corporate leaders are urged to
• Clarify their purpose: Focus on material ESG issues that directly affect value creation while acknowledging the limitations of what companies can do without regulatory changes
• Engage constructively: Proactively engage with stakeholders, including those with opposing views, to navigate the complexities of the ESG landscape
• Enhance transparency: Embrace emerging global reporting standards to improve ESG transparency and avoid both greenwashing and greenhushing

💬 One quote: “Corporate leaders need to be clear and forthright about how their companies are responsible businesses that are addressing the needs of shareholders and stakeholders”

📈 One stat: ESG-related shareholder proposals increased from 273 in 2022 to 337 in 2023, though investor support for these proposals dropped from an average of 30% to 20%

Click for more news covering the latest on sustainable finance and ESG