Leadership Talk by Jason Miklian

Leadership Talk by Jason Miklian

Ethics and Purpose in a Polycrisis World: How does ESG influence business efforts to be more responsible actors?

Environmental, Social and Governance (ESG) investing is one of the most common concepts in business, yet paradoxically also the most divergently defined. Most firms have incorporated ESG principles in some way as a means to moderate risk, and approximately $18 trillion in global assets are ESG-aligned. Meanwhile, many investors consider “ESG investing” as effectively synonymous with “impact investing”, and ESG-marked products a shorthand way to "do good" by investing in a more socially responsible manner. Today, we find a dizzying array of ESG definitions across the normative vs. positivitstic axis, and the "thick" vs. "thin" interpretative axis. I make sense of this evolving landscape, trace the transition and meaning of these evolutions, and deliver a conceptual framework for aligning myriad perspectives for what ESG is and represents today for business and society.

To do so, I first I categorised the 1,000 most impactful definitions of “ESG” across the scholarly and investment landscape over the 2012-2022 period, synthesizing these insights into a conceptual framework that links cross-disciplinary ESG advances across theoretical, empirical, and methodological approaches.

Second, I applied these frameworks to an analysis of 8,350 MSCI ESG reports and 10,000 SEC 10k reports from the 2017-22 period, extracting contextual instances of key normative terms such as "democracy, "human rights", and "governance" for changing applications and actions resulting from this normative shift among firms.I then focus on challenges of "S in ESG" considerations of the above. For example, a firm's "S" score doesn't seem to envision a world outside of the firm, or recognize that the firm is a social actor in a social system. Therefore, any assessment of S impact by definition must include internal and external impacts of firms policies and activities if it is to have value to investors or other stakeholders. This is not incorporated in scoring, so this lack of engagement with such issues represents (a) a massive hidden material risk for firms, (b) a failure of ESG assessors to calculate this risk, and (c ) a missed opportunity to disaggregate / more properly value firms’ risk profiles based on their ability and willingness (or lack thereof) to navigate these waters.

I conclude with a discussion on what our findings mean for theory, and guidance to academics, practitioners, and other stakeholders for employing ESG definitional best practice.

Jason Miklian

Jason Miklian, PhD, is a Senior Researcher in business and peacebuilding at the Centre for Development and the Environment, University of Oslo. Miklian has published 75 high-impact academic articles on business and peacebuilding, including award-winning works based on extensive fieldwork in Bangladesh, Colombia, India, and the Congo, among others. He is considered a top global expert in the field of business, peace, and crisis, consulting firms on their roles in conflict-affected and fragile spaces, and sits on numerous boards and high-level expert panels. He serves on the United Nations Expert Panel on Business and Human Rights and is an expert resource for government knowledge banks in the US, UK, EU, and Norway. He is also author of The Vortex, the true story of how the world’s deadliest natural disaster triggered a genocide and civil war. Miklian has also written for or been cited in an expert capacity by the New York Times, BBC, Foreign Policy, The Economist, Harvard Business Review, Financial Times, and others.

What is Leadership Talks?

Leadership Talks is a series of seminars about topics related to leadership, change and sustainability, project management and organizational psychology, hosted by the Department of Leadership and Organizational Behavior, at BI Norwegian Business School.