A useful framing, we find, is to compare the breadth of ESG with the uniqueness of purpose. ESG encompasses society’s wide range of expectations about the role of business. There are a multitude of ESG options, requirements, and variations—from community service to inclusivity, transparency in reporting, and waste management, to name just a few. Purpose, on the other hand, helps your firm prioritize from among all the things it can (and sometimes must) do in ESG. It directs you toward the areas where you want to “win” as opposed to the areas where you want to “play”—that is, where you can meet the societal bar but, for want of time and resources, can go no higher, at least for now.[…]
When leaders actively seek to embed purpose throughout their organizations, ESG feels less like a cost of doing business and more like a source of competitive advantage. That comes from your purpose being authentic and infused throughout your organization, not forced or tacked on.
Authors: Bruce Simpson, Jinchen Zou, Matt Stone, Olivia Loadwick, Robin Nuttall, Sebastian Leape
Source: McKinsey Quarterly
Subject: Social Responsibility (ESG)