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  • October 16, 2019
  • Article
  • Institutional Investor

Where ESG Fails

By: Michael E. Porter, George Serafeim and Mark Kramer
  • Format:Electronic
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Abstract

We are entering a new stage of understanding of the linkage between investment performance and social impact. Previous approaches, such as socially responsible investing and environmental, social, and governance (ESG) screening, have obscured the opportunities for higher growth, profitability, and competitive advantage that come from creating shared value: addressing social and environmental issues as integral to a company’s core strategic positioning. A shared value approach to investing can deliver superior shareholder returns, but capturing that value will require very different practices on the part of both corporate leaders and investors.

Keywords

Esg; Sustainability; Environment; Social Impact; Impact Investing; Esg (environmental, Social, Governance) Performance; Esg Reporting; Shared Value; Environmental Sustainability; Social Issues; Investment; Value; Strategy

Citation

Porter, Michael E., George Serafeim, and Mark Kramer. "Where ESG Fails." Institutional Investor (October 16, 2019).
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About The Authors

Michael E. Porter

Strategy
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George Serafeim

Accounting and Management
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Mark R. Kramer

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    • January–February 2021
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    Cross‐firm Return Predictability and Accounting Quality

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    • 2021
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    Measuring Employment Impact: Applications and Cases

    By: Katie Panella and George Serafeim
    • 2021
    • Faculty Research

    Stock Price Reactions to ESG News: The Role of ESG Ratings and Disagreement

    By: George Serafeim and Aaron Yoon
More from the Authors
  • Cross‐firm Return Predictability and Accounting Quality By: Wen Chen, Mozaffar Khan, Leonid Kogan and George Serafeim
  • Measuring Employment Impact: Applications and Cases By: Katie Panella and George Serafeim
  • Stock Price Reactions to ESG News: The Role of ESG Ratings and Disagreement By: George Serafeim and Aaron Yoon
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