Cyber security is not the only subject matter that some have added to the universe of ESG (e.g., tax strategy, Russia’s invasion of Ukraine). Nor is it the only one that experts differ on what letter gets assigned (e.g., DE&I, talent). But the various and creative ways in which cyber security can be packaged as ESG shown above demonstrate the potential for ESG to become an open-ended term. Even past evangelists now pray that we move on and search for a better one.
One could argue that the term “ESG” is best used as shorthand for anything not typically measured with traditional financial metrics, or “externalities” in general, and pedantic arguments over specific words and letters miss the point. But the possibilities for what is an ESG issue cannot be endless. What is not ESG? An undisciplined approach to what constitutes ESG will render it meaningless to those who need to understand its importance, and an absence of boundaries makes ESG ripe for manipulation, co-option, and ridicule by those with ulterior motives. Continuing down this path will undermine the concept of ESG as a critical component of business and investment decisions. ESG’s own biggest risk may be that it can be whatever you want or need it to be.
Source: There Is No “C” in “ESG”: An Illustration of ESG’s Biggest Risk
