Earlier this year, Alison Taylor, clinical professor at NYU Stern Business School, published a book titled Higher Ground: How Business Can Do the Right Thing in a Turbulent World – a title that made it onto the Financial Times’ best summer books list for 2024.
She talks to Governance Intelligence sister publication IR Magazine at a time when ESG – an area of expertise for Taylor – has become turbulent indeed. Where companies once felt pressured to make statements in support of ESG, many now feel they can’t win whatever they do. And Unilever presents a perfect example of that, says Taylor, pointing to coverage of the firm’s more ‘realistic’ approach to ESG as a ‘watering down’ as just one example.
Taylor, however, welcomes Unilever’s new, four-pillar approach – focusing on plastics, nature, livelihoods and climate – noting that the company has replaced ‘baggy’ narrative with concrete goals. ‘We need companies to be focused on things directly relevant to their business model. We need them to be much more realistic,’ says Taylor.
A former investigator with Control Risks, Taylor spent a lot of time with ethics and compliance teams, with bankers with general counsel. ‘When I moved to sustainability consulting it was like an Alice Through the Looking Glass moment,’ she says. ‘The whole vision of business, how ESG people and legal and compliance people didn't talk to each other, that companies operated with these completely misaligned ideas and frameworks.
‘One thing you discover when you're an investigator is that the facts don't matter,’ she continues. ‘It was really clear they wanted to tick the box and do the deal. And I just got yelled at by so many bankers.’ Moving into ESG back in 2015, she says she was ‘completely blown away by that world, by the jargon and how it came to be that we have an ethics and compliance function that deals with the law and this other function that deals with human rights, climate change, inclusion, doing wonderful things for animals. How did that happen? What are we trying to achieve? Those are the questions I've been trying to unpack ever since.’
Inconvenient ESG
Taylor, who describes herself as a ‘big-picture person’, moved into the world of ESG the year before Donald Trump was elected president of the US. ‘We had this huge rise in corporates speaking up, corporates getting involved in social and political questions,’ she recalls, describing the trajectory ESG has taken as something of a ‘Trump story’.
She talks about the 2019 Business Roundtable as the ‘high-water mark’ in promoting stakeholder capital, but Taylor always warned it would end badly. ‘You’ve got Larry Fink and everyone yodeling about stakeholder capitalism. Then we've got the pandemic and George Floyd and a big reckoning on racism. Since then, we have had Russia invading Ukraine and it’s started to get a little less convenient. Then end of Roe versus Wade. And it's really inconvenient.
‘Now we've got Israel and Palestine and everyone is desperately trying to back out of the [political and social commentary] hole they backed themselves into in 2018- 2019.’
On LinkedIn, where she has more than 50,000 followers, Taylor describes herself as having ‘lots of hats, even more opinions’ – and she’s certainly unafraid to call out the problems in ESG.
‘We've ended up with the worst of both worlds,’ she states. ‘Companies treating this as PR and attention directed away from the political process by implying that these companies are solving problems they're not solving.’ This, in turn, has opened the door for the greenwashing backlash.
Click here to read the full article at IRMagazine.com
Garnet Roach
Garnet Roach joined IR Magazine in October 2012, working on both the editorial and research sides of the publication. Prior to entering the world of investor relations, her freelance career covered a broad range of subjects, from technology to...
