AN EMERGING ECONOMIC CULTURE will reframe how global corporations trade, invest, and behave.
As we move from the preeminence of financial shareholders to a broader stakeholder capitalism, cor-porations are switching to new metrics to assess success beyond profits. The new environmental, social, and governance (ESG) agenda is complex, involving a long list of issues for companies to consider—including climate change, worker empowerment, gender and racial diversity, pay equity, human rights, the provenance of goods and services, and, in the United States, even voter rights. Policymakers, companies, and financial institutions are under intense pressure on these matters from vocal ESG activists.
However, this new cultural frontier entails considerable trade-offs for leaders to navigate. For example, calls to defund energy companies to combat climate change ignore the fact that such an approach…
