The Ethics of ESG: Critically Assessing the Environmental, Social and Governance Movement

In recent years, new forms of investment have been created to direct funds towards companies performing well according to predefined environmental, social, and governance (ESG) indicators. This volume addresses moral, political, and legal questions about the legitimacy of ESG as a management and investment strategy. Some chapters argue that ESG strategies should focus on creating real-life impacts on morally significant problems, such as climate change, human rights violations, and corporate corruption. Other chapters instead examine the possibility that the long-term feasibility of ESG limits its moral ambitions, requiring ESG to be regarded as only a set of devices for minimizing risk in a way that protects financial gain. The book contributes a much-needed understanding of ethical interpretations of the ESG movement, which are likely to drive future social, political and legal developments.

Table of Contents:
Acknowledgements; Abbreviations; Introduction: ESG, ethics, law, and beyond Valentina Gentile, Eric W. Orts, Andreas Rasche and Alan Strudler; 1. ESG as dead and alive: how confusion around ESG's meaning hinders and benefits ESG's future Lisa M. Fairfax; 2. Ethics by proxy? An agency–theoretic analysis of ESG investment Joseph Heath and Sareh Pouryousefi; 3. What is the purpose of ESG? Who should decide? Valentina Gentile, Eric W. Orts and Alan Strudler; 4. The square peg: why the environment won't fit management models Thomas Donaldson; 5. Success, law, and ESG Colin Mayer; 6. Reforming ESG ratings: contributions from deliberative theory Andreas Georg Scherer, Dana Entenza and David Sieber; 7. Responsibilization of business and the informational ethics of ESG Steen Vallentin; 8. The ethics of ESG integration: ethical dilemmas of quantification Andreas Rasche; 9. The ethical quandary of monetary valuation in ESG impact measurement Laura Marie Edinger-Schons and Judith Stroehle; Index.

About the Author :
Valentina Gentile is an Associate Professor in Political Philosophy at LUISS University of Rome. Eric W. Orts is the Guardsmark Professor of Legal Studies and Business Ethics at the Wharton School of the University of Pennsylvania. Andreas Rasche is Professor of Business in Society at Copenhagen Business School and Associate Dean for its full-time MBA Program. Alan Strudler is a Professor of Legal Studies and Business Ethics and Professor of Philosophy at the University of Pennsylvania.

Review :
'In a world where ESG is both celebrated and contested, The Ethics of ESG offers a timely and critical examination of its evolving landscape. Valentina Gentile, Eric W. Orts, Andreas Rasche, and Alan Strudler bring together leading voices in law and business to explore ESG's theoretical roots, ethical dimensions, and practical challenges (with much nuance and insight). This book is essential reading for scholars, policymakers, investors, and business leaders who seek to better understand ESG-one of the most pressing corporate governance issues of our time.' Dorothy S. Lund, Columbia 1982 Alumna Professor of Law, Columbia Law School, New York 'Once heralded as key to driving investment and business decisions to be in line with broader environmental and societal goals, the ESG movement is now widely debated – with questions about its content, effectiveness, and ideology. At this critical moment, The Ethics of ESG is a much-needed intervention. This book provides one of the most wide-ranging and sustained analyses of the theoretical and philosophical underpinnings of the practice of ESG. It brings together in one volume the latest thinking of leading scholars from a variety of disciplines, covering critical topics from a variety of perspectives. Those concerned about ESG may not agree with everything they read in this book, but they – and the future of the environment and society – will be better for having engaged with it.' Nien-he Hsieh, Kim B. Clark Professor of Business Administration, Harvard Business School 'This book is a welcome breath of fresh air and an honest assessment of ESG, what has become for many a 'social movement' that should not be questioned.  But as we watch the near death of the idea, these timely chapters do just that, examining the misalignment between what ESG has been trying to measure and what it is trying to achieve.  These authors provide a fervent hope that we can move to the world 'beyond ESG' and really get down to the business of addressing both the financial and the ethical dimensions of the climate crisis.' Andrew J. Hoffman, Holcim (US) Professor of Sustainable Enterprise, Ross School of Business, University of Michigan 'ESG attracts a lot of attention. Some is positive: hundreds of billions of dollars are invested in ESG funds worldwide. Some is negative: many US states have enacted anti-ESG laws. But we still don't have a good grip on what ESG is, and what it could be. Is it just a way for corporations to protect shareholders' profits from environmental, social, and governance risks? Or is it a new way of doing business that promises to solve pressing social problems, possibly at shareholders' expense? Is ESG here to stay or a passing fad? This volume brings together leading scholars in law, management, and business ethics to explore these questions. It constitutes the state of the art in ESG scholarship, and is required reading for anyone who wants to understand the current debate, or to make a contribution to it.' Jeffrey Moriarty, Professor and Executive Director Hoffman Center for Business Ethics, Bentley University