Embracing the Culture War: Why the Anti-ESG Campaign Can Be a Blessing for Corporate Sustainability
How to respond to the anti-ESG wave? Embrace it! By embracing the politicization of corporate sustainability and the culture war surrounding it, corporate sustainability can see multiple benefits: Shifting the focus to dark matter elements shaping the corporate sustainability discourse, articulating a narrative war between the past and the future, and creating a broader political alignment that can win over the contest on our future.
The “anti-woke” or “anti-ESG” wave seems to pop up everywhere these days. The forces behind this wave have been busy targeting companies and investors that they consider “woke” due to their embrace of ESG principles when making investing and business decisions. The ESG agenda, according to those attacking it as a mere representation of a “woke culture” or “woke capitalism”, is no less than “a direct threat to the American economy and individual economic freedom.”
So how should we address this anti-ESG wave, which is trying to make corporate sustainability a part of a culture war? What could be an effective response to the efforts to block or slow the shift into a more sustainable economy in times when there is a growing urgency to push for a stronger and faster transition?
Well, it depends on who you’re asking. Some believe that we should rescue ESG from being part of the culture wars by creating a bipartisan consensus “that will take the political passion out of ESG.” The key, Prof. Robert Eccles and Daniel Crowley suggest in a recent HBR piece, is “returning ESG to its narrow and technocratic intention — as a means for helping companies identify and communicate to investors the material long-term risks the company faces from environmental, sustainability and governance issues.”
Some businesses and investors are fighting back, including pension funds in red states like Kentucky, Kansas, and Indiana that are pushing against anti-ESG bills in these states. Their sentiment is somewhat similar to the one Eccles and Crowley discuss in their piece — let businesses make business decisions. As Eric Stafford, VP of government affairs for the Kansas Chamber said: “Private companies should be left to make decisions on what they believe to be best and let the free market determine their success or failure through creative destruction”.
I would like to suggest a different approach — instead of running away from making corporate sustainability part of a culture war, we should embrace it. Instead of shying away from this challenge sustainability champions should gladly accept it and use it to further support and advance a vision of a sustainability-driven future. In other words, the politicization of corporate sustainability by the anti-ESG movement can be a blessing, not a curse. Here’s why:
1. The dark matter elements in corporate sustainability can’t be ignored anymore
“My prediction will be that in 8–10 years from now the political leaders that we will be dealing with will be people we never heard of because that’s what happens in times of historic turmoil and disruption, and part of our challenge is going to be [to] make sure they are... people that we support, so we’ve got to become very much more political, and in some ways, I think the sustainability discussion has too often been a-political…” (John Elkington).
I couldn’t agree more with Elkington. In that sense, I find the desire to keep the conversation around ESG a-political and technocratic in nature to be not only naive but also oblivious to the dark matter elements that are key to shaping the corporate sustainability discourse.
So how dark matter is connected here? In his book “Dark matter and trojan horses: A strategic design vocabulary” Dan Hill uses dark matter as a metaphor for elements that are invisible, but nevertheless play a critical role in shaping what we actually see. Hill suggests this metaphor to represent the important invisible elements responsible for the value created by organizations. According to Hill, dark matter in this context refers to “organisational culture, policy environments, market mechanisms, legislation, finance models and other incentives, governance structures, tradition and habits, local culture and national identity, the habitats, situations and events that decisions are produced within.” Similar to dark matter, these elements are out of sight, are difficult to trace, and may get less attention; nevertheless, they are important for understanding the matter that is visible (i.e., the products and services produced by companies).
Building on Hill’s idea (and taking a strategic design approach), I consider the criticality of the invisible dark matter to the creation of visible matter when it comes to corporate sustainability. In my book, “Rethinking Corporate Sustainability in the Era of Climate Crisis,” I suggest that changing the focal point from corporate sustainability practices (visible matter) to the elements that underlie corporate sustainability (dark matter) could be a more effective way to transform sustainability in business. This shift in framing is helpful in understanding the problem (why sustainability in business is broken?), articulating the solution (what is our vision for the desired state of business sustainability?), and identifying a way to realize it (how do we make the desired vision happen?).
If you want to consider it in terms of the iceberg model, ignoring dark matter when it comes to corporate sustainability is just like ignoring the mental models level and trying to keep the conversation limited to the underlying structures level — it has some value, but a very limited one. Thus, the anti-ESG campaign, no matter how much of a political theater it is, forces those who want to see the sustainability discourse generating interventions that are systemic and meaningful to start recognizing the role of politics and culture in shaping corporate sustainability if they haven’t done so yet.
If anything, this campaign requires us to look under the hood to gain a better understanding of the current approaches to corporate sustainability and the elements that are key to how they are designed. In essence, there is nothing new about it — after all, sustainability and politics have been intertwined for decades — the rules of the game for corporate sustainability have been shaped by ideologies and power structures, while companies have been lobbying and donating money to politicians to ensure these rules work for their advantage. As such, the anti-ESG campaign has only magnified what we already know, prompting us to pay closer attention to the dark matter elements, including politics, and consider how they shape the visible parts of corporate sustainability.
2. Articulating a narrative war between the past and the future
I wrote here before that to win the battle over climate change you need first to win the battle of narratives. The anti-ESG wave both demonstrates this point and provides an opportunity to win a key narrative battle (as a side note, I would add that this is an ongoing fight, so even if we win over this battle, others will follow. This is a marathon, not a sprint).
Why opportunity? Because the forces opposing corporate sustainability clearly represent the past. They are interested in bringing back to life Milton Friedman’s doctrine of shareholder primacy, which suggests that “the social responsibility of business is to increase its profits.” This doctrine has lost its mojo similarly to other many 70s faves like smoking everywhere and taping songs off the radio, and yet the anti-ESG movement seems to be very determined to force companies, investors, and the overall public to stick to it. This is not just Friedman — the anti-ESG champions seem to be stuck in an old world dominated by neo-liberal economics, big oil, belief in meritocracy, and overall faith in the way the good old boys club is running things.
In other words, the anti-ESG movement is offering us the past as a vision for the future. This vision is disconnected from reality in the 2020s in every way possible, ignoring or understating the climate crisis, social inequalities, and other key societal concerns we need to address with great urgency. This narrative offers basically a time machine to the value system of the 70s and 80s, which is probably attractive only to those who benefited from it back then (and now). To the rest of us, it is as compelling as replacing your smartphone with a line phone.
The opportunity here is to juxtapose a narrative driven by everything that was broken in the past and a narrative focusing on a better future for everyone that is considerate of our ecological boundaries. If you consider, for example, Bucky Fuller’s World Game’s challenge to “make the world work for 100% of humanity in the shortest possible time through spontaneous cooperation without ecological offense or the disadvantage of anyone,” it’s pretty clear that the narrative the anti-ESG movement offers is as far from it as it gets.
Thus, the anti-ESG wave is making it much easier to show that those supporting it, who essentially exercise predatory delay, are basically fighting for the past, not the future. With a clear narrative articulating our vision for a future that is better and brighter, we can make a clear distinction between those stuck in the 70s and those who are truly interested in our future.
3. Building a new coalition for change
In his book “Hegemony How-To”, Jonathan Smucker talks about the symbolic and institutional contests as key components of any contest over hegemony. Symbolic contest, he writes, is over “the capacity to shape narrative, symbols, meaning, and common sense. Symbolic contests, according to Smucker, “are indispensable to changing structures and relationships of power and winning measurable gains.” At the same time, he notes that winning the symbolic contest is necessary but insufficient.
Winning the hegemonic contest, Smucker suggests, requires also winning the institutional contest, which “consolidates symbolic victories into policy, law, and structural transformations.” This contest entails the “strategic capacity to maneuver through the minutia of political terrain to shape structures, laws, policies, distributions of wealth and relationships of power.” “The symbolic contest sets the cultural stage, while the institutional contest “gets the goods,” Smucker concludes.
Smucker talks about the need to create a political alignment, i.e. “an aligning of different social groups, organizations, and movements into a unified force that intervenes to shape social, economic, and political reality,” which is bolstered by narratives and symbols (symbolic contest) and helps produce actions and interventions (institutional contest) to make winning possible. This political alignment needs to be constituted on a broad alignment of different elements, which invites as many people as possible to feel that they are part of a broad ‘we’.
In my opinion, the anti-ESG movement is providing us with a good example of how to be an effective contester in a hegemonic contest. They focus on both the symbolic contest (see the latest campaign suggesting ESG stands for “Erasing Savings Growth” and “Elitists Socialists Grifters”) as well as the institutional contest (see the new state and federal bills) in an attempt to build a broad ‘we’ around these ideas. This movement is not deterred by criticism from the business sector or lack of public support — its goal is to change the business landscape and legitimize predatory delay.
“An aspiring hegemonic actor,” Smucker writes, “gains moral legitimacy through the symbolic contest, and it proves its political legitimacy — i.e., its ability to deliver on its vision — through the institutional contest.” This is exactly what the anti-ESG movement is doing now, and to be honest, it does it pretty well.
Sustainability champions, on the other hand, seem to be struggling with the creation of a broad movement that can win over these contests. Instead of ‘inclusive we’ the climate/sustainability discourse is dominated too many times by ‘exclusive we’, where each faction is trying to create solidarity around messages that only a relatively small group of people can identify with. However, the rise of the anti-ESG movement provides a unique opportunity to change this state of affairs.
The efforts of the anti-ESG Campaign create an opening to (re)galvanize the movement of those who support a more sustainable future. To build on my earlier point, we need to figure out how to bring together everyone who identifies with Fuller’s vision of making “the world work for 100% of humanity in the shortest possible time through spontaneous cooperation without ecological offense or the disadvantage of anyone.” This vision is general enough to allow for broader audiences to identify with while offering at the same time clear parameters (for example, a world working for 100% of humanity and a clear sense of urgency) that ensure the need for a meaningful change is not watered down.
We want to embrace the challenges brought about by the anti-ESG campaign because it offers us the opportunity to redesign the ‘big tent’ under which we need to have everyone who wants a desired future that can be defined along the lines of Fuller’s vision. We need to find new ways to form a new coalition that brings together those who want to see change but have different recipes for it, from fixing the system to revolutionizing it.
This “new articulation of a we” is long overdue, so hopefully, we can use this anti-ESG wave as a turning point, driving an even bigger wave of populist sustainability that presents clear and exciting alternatives that improve people’s well-being. This is a battle we can win — so to those who want to challenge corporate sustainability let’s just say — bring it on!
Raz Godelnik is an Assistant Professor of Strategic Design and Management at Parsons School of Design — The New School. He is the author of Rethinking Corporate Sustainability in the Era of Climate Crisis (Palgrave Macmillan, July 2021). You are welcome to follow me on LinkedIn.
