New Aspen Institute Data Indicate Turning Point for ESG

New data suggest that the backlash against accounting for social and environmental (ESG) costs and externalities in business and finance may have peaked. Attendees @Aspen ESG Summit offered insight into the opportunities and challenges ahead.

Contact:Keith Schumann
Communications Manager
Aspen Institute Business & Society Program
[email protected]

New York, NY, July 15, 2024-After years of headlines about the backlash against so-called "ESG" practices in business, new data from the Aspen Institute's Business & Society Program suggest the human and environmental context of management and investment is entering a new phase.

The Aspen Institute's Business & Society Program kicked off the third Aspen ESG Summit this week with a flash poll to gauge the business impact of political rhetoric from statehouses to Congressional hearings regarding scrutiny by investors and managers of everything from carbon emissions to human rights. 43% of participants either agree or strongly agree that their work had gotten easier in the last year, as opposed to 33% who disagreed.

By contrast, a year ago at the 2023 Summit, almost half (48%) of the 150+ participants agreed that "heated rhetoric on 'ESG' is adversely affecting my ability to advance my work."

"I think that the great 'pushback' of the last year or two has proved useful," said Judy Samuelson, Executive Director of the Aspen Institute's Business & Society Program in the keynote address that opened the 2024 Summit. "I think this moment-as frustrating and enervating as it has been-has also been clarifying. It has compelled executives to think anew about what we really mean by 'so-called stakeholders' and to identify which of the commitments we make, or priorities we elevate, is critically important to a sustainable business strategy and to the long-term health of the enterprise."

One business leader suggested that the ESG hype curve may at last be settling, with new disclosure requirements helping to reduce uncertainty. And greater regulation and enhanced reporting requirements come with consequences: sustainability leaders shared that more time dedicated to reporting could be better deployed toward strategy and execution.

Regulation cuts both ways; 34% of attendees named "policy and regulation" as the biggest factor in their company's ability to advance social and environmental concerns in the year ahead. "US Politics" ranked second at 31%.

Everything from tariffs to the fear of retribution for speaking on political issues were the focus of a plenary entitled "Corporate Voice, 2024 Edition", moderated by Witold Henisz, Vice Dean and Faculty Director, ESG Initiative at Wharton, University of Pennsylvania.

Over the course of two days of dialogue and working groups, participants elevated massive change in business priorities, sustainable innovation and enduring challenges to balancing long term vision and short-term pressures from capital markets. The need to consider the expectations of an animated, younger, workforce keen for work that matters to the world they will inherit was a recurring theme. Sessions such as "Regenerating Agriculture: A Lab for Innovating at Scale" delved into the opportunity for policy to help unlock new business models that will support both planet and profits.

The Summit, which took place in Aspen, Colorado, at the Aspen Institute's home campus, from July 8^ththrough July 11^th, is designed as a dialogue among business leaders along with long-term investors, corporate governance experts and those who advise, study, and regulate business. The program focuses on frontier issues that shape business decisions, from Artificial Intelligence to the role of private capital.

"I think we'll look back on these last few years as an important reset in more integrated thinking in business," said Judy Samuelson. "Executives are increasingly focused on business investment in the relationships and assets that govern the future of the enterprise, and we are in a better place to affect change than we were a few years ago. Attention is shifting to the 'how' of innovation, investment, and governance - all key to picking up the pace of change on global challenges from climate change to species protection, and domestic concerns over inequality and economic opportunity. There's no turning back, and business has a critically important role to play."

For commentary from Judy Samuelson and dialogue participants on business strategies, reach out to Business & Society Program Communications Manager Keith Schumann at [email protected].

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The Aspen Institute Business and Society Program (Aspen BSP), founded in 1998, works with business executives and scholars to align business decisions and investments with the long-term health of society-and the planet. Through carefully designed networks, working groups and focused dialogue, the Program identifies and inspires thought leaders and "intrapreneurs" to challenge conventional ideas about capitalism and markets, to test new measures of business success and to connect classroom theory and business practice. The Business and Society Program is most known for the First Movers Fellowship, for dialogue on curbing short-termism in business and capital markets, and for fresh thinking about the Purpose of the corporation. For more information, visit www.aspenbsp.org.

About the Aspen Institute

The Aspen Institute is a global nonprofit organization whose purpose is to ignite human potential to build understanding and create new possibilities for a better world. Founded in 1949, the Institute drives change through dialogue, leadership and action to help solve society's greatest challenges. It is headquartered in Washington, D.C. and has a campus in Aspen, CO, as well as an international network of partners. For more information, visit www.aspeninstitute.org.

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