ESG harmonizing environment, society and governance for a sustainable future

Abstract

The intellectual genealogy of Environmental, Social, and Governance criteria as an integrated framework for evaluating non-financial corporate performance is more complex than its apparent novelty might suggest. The vocabulary of ESG is relatively recent, crystallising with the United Nations Global Compact's landmark 2004 report, Who Cares Wins, which first synthesised environmental stewardship, social responsibility, and governance integrity into a unified analytical framework for investment decision-making.¹ But the substantive concerns that ESG aggregates have a much longer pedigree. Environmental considerations entered the mainstream of development and corporate governance discourse during the 1970s, catalysed by the 1972 Stockholm Conference on the Human Environment, the publication of the Club of Rome's Limits to Growth in the same year, and the nascent environmental movements of the Global North. The World Bank's initial environmental assessment requirements date to this period, reflecting an early recognition that development finance should account for ecological consequences beyond the immediate financial metrics of project viability.