Why ESG Matters (Second of a Series)

Today’s ESG river had many tributaries. Early practices screened out business activities perceived to harm the environment or society. Mosaic law dating back to 1500 BC, Koran precepts, Henry VIII’s lending legalization, 18th century England and Methodist movements, and the 20th century’s socially responsible investing (SRI) all have embodied “doing good.”

In the last fifty years responsible investing has taken on a greater urgency and focus. This period coincided with the rise of mutual funds that owned increasingly large shares of public companies. Beginning with the US civil rights movement, and apartheid in South Africa, fund managers used their growing clout to enact change in social equality and faith-based investing.

Environmental awareness also came to the fore in the 1960’s and 1970’s, with regulatory agencies such as the newly-founded EPA working with Congress to pass the Clean Air Act and other key legislation. Chernobyl, Bhopal and the Exxon Valdez disasters cemented concerns about lasting damage created by corporate and governmental environmental mismanagement.