Purpose and profits are not mutually exclusive.
By Gina Mastantuono, CFO at ServiceNow
The business world faces a reckoning. Is profit really all that matters? Or do companies have a role to play in confronting some of humanity’s most pressing issues? Over the past few years, regulators, lawmakers, shareholders, customers, and employees have made it clear that they expect us to do more to address environmental, social, and governance (ESG) issues. The challenge every company faces now is not deciding whether to act, but how.
Accepting that ESG is a business imperative is a necessary first step. But there’s a fundamental question that companies need to answer first: When we say ESG, what exactly are we talking about? This may seem easy—it’s a three-letter abbreviation, after all. The trouble arises because each industry, company, and stakeholder group brings a different focus and different priorities to the conversation. Is ESG mostly about climate change? Or is it about diversity and inclusion in the workforce? How about reducing packaging waste in the supply chain?
ESG is a big umbrella; it covers a lot. While issues that fall under the “E” and “S” tend to grab headlines, the “G”—governance—risks being overlooked. That’s unfortunate because it’s just as important, if not more so. Simply put, there is no ESG without governance.
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