The Negative Effects of the Politicization of ESG
Photo by CFI
Today's second topic is Career Pivots.
Word Count: About 950, approximate reading time 4 to 6 minutes. Please share your thoughts in the comments. Please be kind and subscribe to my newsletter.
The CFA Institute notes, "Investors are increasingly applying these non-financial factors as part of their analysis process to identify material risks and growth opportunities." This means that ESG is one of many considerations that make up an investment decision. Axios reports that there are efforts to prevent pensions from including EGS in their investment decisions. Texas and Kentucky are actively pursuing this as well. As I stated in a previous newsletter, I believe long-term success requires the proper balance between Shareholder/Investor value and Stakeholder value.
Environmental
I am old. I remember frequent news stories of acid rain when I was growing up. I remember when it was impossible to see the skylines of major cities because of smog. In the 1960s, Lake Erie was declared a 'dead lake.' In 1969, the Cuyahoga River burned because of the pollution. Richard Nixon signed into law The Clean Air Act in 1970 and the Clean Water Act in 1972. Since then, companies like W.R. Grace and Crystal Geyser have been fined for dumping toxic waste. Since that time, our air and water are cleaner. We still have problems. Just look at Flint, Michigan, and Jackson, Mississippi.
Do we want to go back to a time when the environment played no role in business decision-making? I am reminded of George Santayana's quote: "Those who cannot remember the past are condemned to repeat it."
Social
On multiple occasions, McKinsey has reported that companies with diverse leadership teams financially outperform their competition. This makes intuitive sense because companies that reflect their customers better understand them. This perspective enables them to make better business decisions. Similarly, companies investing in their communities to strengthen them will likely see improved performance as those communities thrive.
Governance
What is so wrong about wanting strong governance? Some adult supervision from the FTX board may have prevented a disaster. The same can be said of Enron, WorldCom, Tyco, and others. Strong board governance that holds leadership teams accountable can prevent poor decision-making. Boards that are rubber stamps for strong-willed CEOs run a greater risk.
I am not advocating that ESG should be prioritized over financial performance. Ultimately organizations must generate positive cash flow and operate in the black to survive. Investing in organizations with sound ESG practices that enhance operations and drive growth are better long-term investments than those that do not. Everything should be based on sound business plans.
The question should not be whether to consider ESG when investing. ESG should be just one of many factors investors take into account.
To Make Progress on Your Journey, It is Often Necessary to Pivot.
Business Insider reports that many laid-off tech workers are finding jobs that pay more than they previously earned. More money is a good thing, but it should not be the primary focus of your job search. Sometimes, we need to pivot to manage our careers and make exponential progress. A layoff presents an opportunity to change the trajectory of your leadership journey.
Looking at people you admire, you will often find that their careers did not follow a linear path. They likely made lateral jumps, taking positions that were not aligned with their core strength. These jumps enabled them to learn new things and grow their portfolio of skills and expertise. Joe Jacobi wrote about people who avoid resets. When they do this, they stay on paths that do not lead where they really want to go. They never reach their full potential.
Neil deGrasse Tyson attributes his success to keeping four words top of mind. "I can still grow." To grow must find places where we are not the smartest person in the room. We need to surround ourselves with people who know more than we do because we can learn from them.
The central tenant of The Leader With A Thousand Faces is that your leadership growth is a continuous and repeating journey. Each situation you encounter and every company you work with is different. Your previous leadership experience informs your actions. You have to apply those lessons differently. That is when growth occurs.
What I'm Up To
I am focused on year-end things. Enjoying the holidays with family and friends. Wrapping up 2022 and preparing for 2023.
Chips and Salsa: Snack-sized news and posts
I do not like cold. Carl Reiner once said, "Snow is an unnecessary freezing of water."
Pocket - How to dress for cold weather
We should embrace existing advances in clean energy while pursuing Fusion power.
PitchBook - Investing in Clean Energy
Pay attention to your health; your life will be much better in the long run.
Axios - Everything you know about stress and high blood pressure is wrong
We manage our time precisely, yet we do not understand it as well as we think.
NPR - Researchers say time is an illusion. So why are we all obsessed with it?
Expertise in one field does not translate to another.
Undark - Ghosts of Science Past Still Haunt Us. We Can Put Them to Rest.
There is not much better than a well-timed break.
Axios - The outsize power of tiny breaks
Take ownership of what you are doing.
Inc - The difference between doing a task and owning it.
Quotes
"Focus on the journey, not the destination. Joy is found not in finishing an activity but in doing it."
- Greg Anderson
"Leave the world better than you found it, even if you didn't make the mess."
- Arshay Cooper
The Leader With A Thousand Faces is available on Amazon.
My goal is to make this newsletter as interesting and valuable as possible. Please share your thoughts and suggestions for improvement. If there are specific topics in leadership you would like me to focus on in future issues, please send them my way.
