ESG has more momentum today that CSR, and is driving action forcefully, driven largely by investors. Bloomberg Intelligence has predicted ESG assets are on track to exceed $53 trillion over the next four years. Investors are now more able and willing to act in this area, because COVID-19 has proven how risky it is not to be prepared for potential future huge disruptions such as climate change.
Let’s backtrack. Corporate Social Responsibility (CSR) is a framework to help companies be socially accountable — to themselves, its stakeholders and the public.
ESG means using Environmental, Social and Governance standards to evaluate companies and countries on how far-advanced they are with sustainability. ESG includes an emerging accounting standard and came about because social change, advances in technology, and the ability to prove ROI elevated issues of environmental, social and governance.
How can we be clear about the difference? CSR aims to make a business accountable, whereas ESG criteria make its efforts measurable and thus comparable. Another distinction is that CSR has been in the making for 50 years, whereas ESG is more recent.
But what questions should you be asking if you want to be sure that you, as a leader, are not neglecting the one nor the other in your company strategy?
Ask yourself these four questions:
Are you measuring ESG performance in a way…