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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

→More Publications

George Serafeim

Accounting and Management
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More from the Authors
  • Vytal: Packaging-as-a-Service By: George Serafeim, Michael W. Toffel and Stacy Straaberg
  • Northvolt: Building Batteries to Fight Climate Change (B) By: George Serafeim, Debora L. Spar, Peter Tufano, Hugo Etchegoyhen and Emilie Billaud
  • Climate Solutions, Transition Risk, and Stock Returns By: Shirley Lu, Edward J. Riedl, Simon Xu and George Serafeim
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