Hi everyone,
I’ve been talking with my family, friends and the freelancers I manage for my team since late last year about a major decision I made. I’m stepping away from ESG-consultancy. The plan was always to shut up shop after we had completed the projects we were working on. Now that I’ve started a new project with my network, that day is today!
Here’s why! The projects on environmental, social and governance (ESG) investing has not only fallen apart – it’s been getting pretty good at wasting time, adding confusion and, worst of all, pretending to be eco-conscious when it is not. Having worked for years in this field and observed the vast chasm between its promise and the actual results, I came to a crystal-clear realization: This whole damn thing is like selling invisible clothes.
I began my journey into ESG as many do, with good and sincere intentions. The concept was thrilling: Use wealth to make a difference, strengthen the world and create lasting businesses. But the reality – well-documented but often overlooked thanks to some fancy marketing – is another story.
Here’s the examples of what’s wrong with ESG:
The BlackRock Problem: BlackRock is supposed to be a leader when it comes to ESG, but its actions do not match its words. As their CEO preaches concern for the planet, BlackRock continues to pour money into fossil fuels-even increasing their stakes in oil and gas companies as late 2023. Nor does their voting record on climate issues correspond to their promises. This isn’t about saving the planet; it’s just plain, dumb capitalism cloaked in green. ESG metrics are easy to fake, they’re not standardized and they care more about appearances than actual change. (Sources: Bloomberg, The Financial Times, Reuters reports.)
Greenwashing Is Everywhere: Remember Volkswagen? They sold us their “clean diesel” cars as the best thing since the Lumières first projected a moving picture, and then we found out that it was all a lie. This was not a one-off; it’s part of a larger pattern. Companies boast about goals they will never meet, pledge “net” zero by coming up with cheap tricks instead of stopping pollution, and claim to be socially responsible while treating workers badly. Consultants prepare these stories for them to sound good on paper, but nothing really changes.
Too Many Rules, Too Few Results: ESG was supposed to fix problems; instead, it gummed up the works. Companies squander vast time and effort into completing numerous reports for various systems (SASB, GRI, TCFD, etc.). And all this hard work is spent on checking boxes rather than on making real improvements. Entrepreneurs profit from this mess, selling costly services that result in thick reports but no real action. And it turns a blind eye to real risks – fragile supply chains or obsolete technology, for example. And the research is clear that high ESG scores don’t translate into higher profits or more real-world impact. (Sources: MIT Sloan, University of Chicago research; industry reports on reporting fatigue.)
All of those problems I witnessed did not deter me – they motivated me. It made me ponder: Where does actual value come from?
The response isn’t in fancy ratings or nice reports. It’s in the grind of improving the fundamentals.
It’s about getting down to the detail of operations, and discovering inefficiencies, unlocking hidden value and generating business models that support whatever comes next. It’s about baking impact into the bones of your company, not just speaking about it.
That’s why I’ve shifted gears.
We offer Business Plan Innovation Strategic Consulting.
This isn’t only about a name change – it’s a completely different concept of what to think about and how to think about it. We zero in on leaders who cut through ESG fluff and demand real results:
Fixing What Matters Most: We get under the hood of your supply chain, production, logistics, and customer service. Where are you losing money? How can you save money, improve productivity and, oh yeah, perhaps help the environment – and not in a gimmicky way, but as a matter of course of thinking smart?
Discovering New Sources of Revenue: Rather than emphasizing the importance of not being fined or filing reports, we ponder how we can grow. How do you monetize unused assets, data or ideas? Where can you create new markets? What can you do to develop deeper customer relationships and generate consistent, high-profit revenue?
Staying Ahead of Change: Where ESG historicizes, we prepare you to pivot. When markets change, tech evolves or regulations are upended, we can help you turn challenges into opportunities.
Real Numbers, Real Success We value success in cold, hard numbers: lower costs, higher revenue, new customers, growing products, quantifiable results. Your scoreboard is the financial statements; not some __ star score someone else decides!
If you’re sick of ESG theater, if you’re aware that there’s an awful lot of greenwashing going on and the fact that real value is not created with pretty reports but with competitive, innovative businesses – you are speaking my language.
This pivot is not a retreat; it is an advance. It’s all about generating undeniable and enduring value. It’s adhering to the principle that great companies do great things not because they fill a checklist, but because they have an on-lock, solid foundation; they’re the smartest strategy executed in a new or different way; and they’re the kind of change where if it doesn’t succeed, you could always find somewhere else to apply your passion and your sweat equity.
The era of ESG pretence is coming to an end. There has never been a more urgent need for excellence and innovation. I’ve decided to focus on the future. If you are ready to come aboard, let’s talk.
G. Franker