June 9, 2023
The political backlash against “woke” capitalism and ESG is hitting its mark—or at least part of its mark. The three letters are falling out of favor among U.S. corporate executives, as Peter reported yesterday. The practice of speaking out on controversial social and political issues, which reached a peak after the killing of George Floyd, is receding in C-suites, as this piece in the Wall Street Journal documents. And expectations that the Supreme Court may soon strike down affirmative action programs at Harvard and the University of North Carolina will undoubtedly lead to challenges for corporate DEI initiatives, as Ellen McGirt dissects in this masterful piece.
But here’s where the anti-ESG effort is failing: climate change. Oh, sure, oil companies have increased their investment and production in fossil fuels—a natural and welcome response to the war in Ukraine and the subsequent rise in fuel prices. But most large companies are holding firm in their commitments to ambitious net zero targets and sweeping carbon reduction efforts.
Why? We got a window into their thinking in our poll of Fortune 500 CEOs. We asked the CEOs whether they agreed with a series of statements that began: “By focusing on climate, we will…” A majority agreed or strongly agreed with the following:
—“better engage our employees” (77%)
—“strengthen our bond with customers” (61%)
—“open up new markets” (59%)
—“improve relations with shareholders” (51%)
Just 19% said that their climate efforts would help them reduce costs. And most significantly, only 12% felt that climate efforts would “have no business benefit to us.”
The message here is clear. Efforts to combat climate change have become entrenched in the strategies of the Fortune 500, not because they are good for the planet, but because they are good for business. Advocates for other aspects of the ESG agenda need to shore up their efforts to make a similar case.
And take some time today to explore Fortune’s newest product, Fortune Analytics, where you can purchase the complete datasets behind our iconic Fortune 500 and Global 500 lists. The data also come with comprehensive C-level contact information, relevant financials for each company, and exclusive data analysis from the Fortune team. You can explore Fortune Analytics here.
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