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Esg: Right Thesis, Wrong Data

Author

Listed:
  • Saul, Jason

    (Center for Impact Sciences, Harris School of Public Policy, University of Chicago)

  • Kurlander Costanza, Phyllis

    (OutcomesX)

Abstract

In this article, we argue that there is a need to move away from the outdated ESG regime that focuses on external risks for a corporation to one that addresses intrinsic issues that can have positive commercial and societal impacts. The current ESG inputs reflect administrative data points or checklists that align with socially responsible standards, policies, and codes of conduct. However, when corporations focus on societal impacts that are intrinsic to their business, ESG can be a powerful predictor of financial return. The future of ESG depends on producing a new generation of ESG 2.0 data that reliably measures the link between societal impacts and corporate intrinsic value. To get there, three key innovations are needed: (1) adoption of a standardized taxonomy of societal impacts, (2) establishment of an ESG 2.0 “intrinsicality” map, and (3) extension of measurement, reporting, and verification (MRV) to “S”.

Suggested Citation

  • Saul, Jason & Kurlander Costanza, Phyllis, 2022. "Esg: Right Thesis, Wrong Data," Journal of Financial Transformation, Capco Institute, vol. 56, pages 79-84.
    • Handle: RePEc:ris:jofitr:1692
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    Cited by:

    1. Carolina Almeida Cruz & Florinda Matos, 2023. "ESG Maturity: A Software Framework for the Challenges of ESG Data in Investment," Sustainability, MDPI, vol. 15(3), pages 1-18, February.

    More about this item

    Keywords

    ESG; social impact;

    JEL classification:

    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O35 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Social Innovation
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy

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