Publications
Publications
- September–October 2022
- Harvard Business Review
The Essential Link Between ESG Targets and Financial Performance
By: Mark R. Kramer and Marc W. Pfitzer
Abstract
Despite heightened attention to environmental, social, and governance (ESG) issues, surprisingly few companies are making meaningful progress in delivering on their commitments. Most firms are not integrating ESG factors into internal strategy and operational decisions and are giving investors little to no explanation of the impact of ESG performance on corporate earnings. To integrate ESG efforts into their core business models, firms should take these steps: (1) Identify the ESG issues material to the business; (2) factor in ESG effects when making strategic, financial, and operational decisions; (3) collaborate with stakeholders; (4) redesign organizational roles; and (5) communicate with investors.
Keywords
ESG; Environmental Sustainability; Social Issues; Governance; Financial Strategy; Decision Making; Business and Stakeholder Relations; Organizational Structure
Citation
Kramer, Mark R., and Marc W. Pfitzer. "The Essential Link Between ESG Targets and Financial Performance." Harvard Business Review 100, no. 5 (September–October 2022).