Greenwashing, virtue-signalling and corporate guff are setting back the City’s environmental agenda
Is it pro-bird? Is it anti-plane? Or is it just a bubble? That’s the question that many in the City have been asking themselves over the past few months about those three little words: environmental, social, and governance.
The rise of ESG was swift and borderline aggressive. During the pandemic, it was impossible to interview a chief executive who had not undergone either a Damascene conversion to the cause (or, perhaps more accurately, been brow-beaten by well-meaning types elsewhere in the business to become so). One could not move for ESG initiatives, nor attain a moment’s peace from claims that firms across the Square Mile had “got it.”
Has the tide turned (no pun intended)? Today’s survey on our front page found that whilst the drive towards sustainability in all its forms hasn’t necessarily slowed, the amount of noise around it has made it more difficult to tell what is – and what is not – actually what it claims to be.
Lest we sound too cynical, it’s worth stating for the record that the City, financial markets and old-fashioned capitalism are going to be the driving force behind the drive to slow climate change. Politicians can pontificate – and if anybody seriously thinks Rishi Sunak attending Cop-27 will make one iota of difference to the globe’s effort to eliminate carbon emissions then we have a bridge to sell you – but it’s economics that will be what delivers. That’s a good thing. London needs competitive advantages – it has one in green finance, and it should hold onto it.
But action makes far more of an impact than words. Greenwashing is now an art in itself. Talking a good game on ESG does not translate, clearly, into actually delivering it. There are fund managers, too, who run ESG funds which actually invest in the heaviest carbon-polluters, arguing it’s better to be the fox in the henhouse than simply pretending the hens don’t exist. The City’s ESG conversation could do with a little more of that realism.