Join our community of smart investors
OPINION

Ideology’s threat to ESG

Ideology’s threat to ESG
March 18, 2021
Ideology’s threat to ESG

A company prints on the cover of its annual report, “Making sustainable living commonplace”. Another, on its report, has the slogan, “Enabling a zero-carbon, lower-energy future”. We barely notice these sound bites as we turn to what we consider the meat of the report. They are ubiquitous and the sentiments they carry so familiar as to be invisible. So why do companies bother with them? Why not print something that should really get investors excited, such as, “Another year of inflation-busting growth”?

For one explanation we can turn to a famous essay from the late 1970s by Vaclav Havel, a Czech writer, where he discussed why a fictitious greengrocer somewhere in Russia’s soviet empire put in his shop window a placard saying, “Workers of the world unite!” As with the slogans in those companies’ shop windows – incidentally, from Unilever (ULVR) and Drax (DRX) – no one actually notices the greengrocer’s sign. It’s part of the scenery.

All of these signs are innocuous. They express sentiments with which no one would disagree. What’s wrong with the workers of the world uniting? Who could object to a lower-energy future or sustainable living becoming commonplace? But, according to Havel’s essay, The Power of the Powerless, they are also signs of something else. All are expressions of conformity. As such, they offer breathing space. By mouthing these platitudes, companies in today’s western world, much like greengrocers in 1970s eastern Europe, effectively say that they behave in the manner expected of them. As such, they can be left alone by the powerful – or by the social-media mob – to run their businesses in peace and quiet.

This is subscriber only content
Start your trial to keep reading
PRINT AND DIGITAL trial

Get 12 weeks for £12
  • Essential access to the website and app
  • Magazine delivered every week
  • Investment ideas, tools and analysis
Have an account? Sign in