We are seeing a surge in investor interest in companies that perform well on environmental and social impact (“ESG” criteria). By 2025, ESG funds will reach $53 trillion, or one-third of all assets under management, driven by the global climate and inequity emergencies and the opportunities these needs represent for business.
Leading companies are setting ambitious ESG targets, yet struggle to meet them when they continue to position “sustainability” as an afterthought, a retroactive risk management remedy for the consequences of strategic and capital allocation decisions made only with a financial lens. That is a vast lost opportunity to win in the emerging green and just economic transition underway globally.
In our article The Essential Link Between ESG Targets and Financial Performance in Harvard Business Review, FSG’s co-founder Mark Kramer and managing director Marc Pfitzer describe why doing the math on the “impact intensity of profit” is necessary to surface opportunities and constraints to meeting both financial and ESG targets and opens the way to exploring business model and ecosystem transformation that will outcompete in today’s economy.
Get updates on new ideas and resources from FSG.
"*" indicates required fields