Kenneth P. Pucker

<article-ideainbrief class="article-ideainbrief">
 <h4 class="ideainbrief-title">Idea in Brief</h4>
 <div class="ideainbrief-contents">
  <h5>The Hope</h5>
  <p>Over the past two decades, many people bought into the idea that if corporations committed to measuring and reporting on their sustainability performance, the payoffs would be profound. Companies would do less harm to the planet and more good for society. Investors and consumers would reward strong performers. Rigorous metrics would become the norm. Over time, the result would be a more sustainable form of capitalism.</p>
  <h5>The Reality</h5>
  <p>It hasn’t worked. Reporting is riddled with problems, and sustainable investing is overhyped. Meanwhile, environmental threats continue to mount, and inequality continues to grow.</p>
  <h5>A Better Approach</h5>
  <p>Metrics can and should be improved, and stakeholder pressure will incrementally advance sustainability. However, we also need stronger civic engagement, sharper regulation, different incentives for investment, and a rethinking of what makes a company or society successful.</p>
 </div>
</article-ideainbrief><p>Over the past 20 years many forward-thinking academics, consultants, executives, and NGO leaders have promoted a theory outlining how businesses can prosper while pursuing a greener and more socially responsible agenda. These people, whom I refer to collectively as “Sustainability Inc.,” believed that if companies committed to measuring and reporting publicly on their sustainability performance, four things would happen:</p>

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<p>For two decades progressive thinkers have argued that a more sustainable form of capitalism would arise if companies regularly measured and reported on their environmental, social, and governance (ESG) performance. But although such reporting has become widespread, and some firms are deriving benefits from it, environmental damage and social inequality are still growing.</p>
<p>This article, by Timberland&#8217;s former COO, outlines the problems with both sustainability reporting and sustainable investing. The author discusses nonstandard metrics, insufficient auditing, unreliable ESG ratings, and more. But real progress, he says, requires not just better measurement and reporting practices but also changes in regulations, investment incentives, and mindsets.</p>

Overselling Sustainability Reporting

For two decades progressive thinkers have argued that a more sustainable form of capitalism would arise if companies regularly measured and reported on their environmental, social, and governance (ESG) performance. But although such reporting has become widespread, and some firms are deriving benefits from it, environmental damage and social inequality are still growing. This article, by Timberland’s former COO, outlines the problems with both sustainability reporting and sustainable investing. The author discusses nonstandard metrics, insufficient auditing, unreliable ESG ratings, and more. But real progress, he says, requires not just better measurement and reporting practices but also changes in regulations, investment incentives, and mindsets.

Overselling Sustainability Reporting

Summary.

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