Dear Fellow Supports of Sustainability,
On February 15, 2022, Bhakti Mirchandani and I published “We Need Universal ESG Accounting Standards” in the Harvard Business Review. I posted it on LinkedIn that same day. It is my most viewed post on this platform ever. By a lot. It received many comments. Very surprising to me, many more of them were negative than positive and some of the negative ones were absolutely vitriolic.
I felt the criticisms deserved a response but doing so one-by-one on LinkedIn isn’t my preferred mode of communication. So four days later I published “A Personal Message To The Cantankerous Critics Of The International Sustainability Standards Board” and posted it on LinkedIn as well. This too received a fair amount of attention and comments. In this case they were more constructive, although not exclusively so. The general tone was one of support for the ISSB and dismay at the surprising degree of vitriol in response to a short piece in HBR in support of an organization that will make a big step forward in support of sustainability. Which the critics vehemently deny and think it will be destructive to sustainability. Go figure. The ISSB is not a silver bullet and isn’t presenting itself as one. There is other important work going on in disclosure, like in the EU, and disclosure alone can’t solve all the problems in the world.
Putting aside the angry rhetoric of those opposed to the ISSB, the issue is a simple one. Should the ISSB set standards for companies to report not simply on ESG/sustainability (and it is using these two words together that sends a certain crowd into paroxysm) information that is relevant to investors but also to wider society? The critics rightly point out that ESG and sustainability are different concepts. What they can’t accept is that this distinction isn’t important in the mainstream business and investment community where ESG/sustainability has only gained legitimacy in the last five years or so, by my estimate. Until very recently, ESG/sustainability were seen as ways to lose money. The narrative has changed and that is enormous progress. Still, these rabid critics like to posture themselves through what they think is a clever critique of the ISSB by calling it the I?SB and things like that.
These critics are passionate and, I’m sure, well meaning. They make some very valid points. However, their tone isn’t helping them or the cause. I also think in many cases it is more about their ego and identity and preening in front of their acolytes. These rabid critics have no practical alternative to suggest. They are naïve about the complexity of standard setting and the very real challenges the ISSB is facing to get established and for its standards to be used. They mock it as being “incrementalist” while not even having a vague idea of how to make the world the way they think it should be. Screaming won’t do it. These people can carp all they want but the ISSB can’t and won’t be what they want it to be. And if it tried to be, there are many reasons why its standards would not be put into use. The ISSB can create standards, but it is government that decide whether to mandate them or not.
I am in the camp that believes incremental progress is better than no progress at all. Although anyone who understands the capital markets and standard setting knows the ISSB is far from incremental. They also understand that capital markets aren’t the sole solution to creating a sustainable society and that the ISSB is not a silver bullet. Companies are free to report on issues that fall outside it’s remit, and government policies are critical. The conclusion I draw from the most virulent critics of the ISSB is that they’d rather not have it all. Kind of a “My way or the highway for ya’, dude” attitude.
I’m sure the critics of the ISSB feel that I’m not accurately reflecting their views. Fair enough. They are welcome to write their own articles and engage with the people they think are important to persuade on their point of view. Taking cheap shots at me is entertaining—even for me—but not particularly productive since my influence in all of this is modest at best.
This debate caught the attention of Andrew Edgecliffe-Johnson who writes for the “Moral Money” column of the Financial Times. On February 21, 2022, he published a short piece titled “Sustainability schism raises questions for the ISSB.” (It’s below the interesting piece on hydrogen). In an attempt to reconcile the different points of view, Claire Bodanis used this article for a post of her own. The general reaction was positive, although with a few notable exceptions in the same angry and sanctimonious tone.
After giving this debate a chance to play out, on February 22 I posted an article I’d written that was published late last week for the International Society of Sustainability Professionals: “The ISSB Can Make Chief Sustainability Officers More Relevant or Less Relevant—They Have to Choose.” My basic argument is that sustainability professionals need to learn “finance talk” and finance professionals need to learn “sustainability talk.” Yes, a challenge for both of them but not an insurmountable task and another positive way to move things forward. The nasty jabs and personal insults continued. It is very clear to me that dialogue is useful. The critics don’t want engagement. They want capitulation. Ain’t happen’ on my side.
The angry critics see themselves as the Brave Revolutionaries for True Sustainability and mock me—and pretty much all of the rest of you—as an uninformed, co-opted, and despised incrementalists. They are welcome to pursue their strategy, just as I will continue to pursue mine. I will continue to post on LinkedIn, but the past week has been a coming of Social Media Age for me. I’ve learned that it’s a platform that can be misused.
I have no intention of letting people use my name and this platform to spew their bile. A social media savvy Millennial friend of mine taught me how to “block” people on LinkedIn. I’ve done that for a few of the extreme offenders. I think debate is good and will do this only sparingly. But I’m glad I’ve found one way of helping to take some of the poison out of the discourse that I unintentionally launched with my HBR post.
Kind Regards,
Bob
