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ESG is not new. It’s easy to find drivers of ESG values and principles that date back hundreds of years

Bill-WhitelawBy now, pretty much everyone who ought to be familiar with ESG fundamentals has at least basic literacy around the notion of how corporate environmental, social and governance behaviours should be recognized, rated, and rewarded.

But a funny thing about contemporary ESG discussions is a (relatively) common view that ESG is somehow a new phenomenon. While the advent of ESG and sustainability from a headline-dominance and titular point of view – think SVP Sustainability by proxy – has seen massive momentum in recent years, the ESG movement’s underlying principles are nothing new and pretty much timeless.

Timelessness is an important consideration for sustainability supporters because the flipside of ESG’s purported newness is this: it is easy for critics to attack new-found “wokeness” as something faddish and destined soon to fade from view when a new cause presents itself. Put another way; it’s easy to knock perceived novelty and flog the implied flavour of the moment.

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So those brash young sustainability professionals whose generational (and somewhat hubristic) claim to fame is that they’re the Al Gore-like inventors of all things ESG would do well to be better students of their movement’s history. With a more granular grasp of ESG’s generational transcendence, they can argue the power of impact measured across generations. This is the only practical way with which to engage ESG’s growing body of critics – and as Machiavelli points out, the best defence is a good offence.

That’s the thing: ESG is not new. Not by a long stretch. Indeed, for anyone who cares to peer in the rearview mirror, and engage with history books and the alphabet, it’s easy to find drivers of ESG values and principles dating back hundreds of years, not just decades.

Think EA, SRI, CSV and CSR, to name a few.

How about ESG in the 18th century? Yes, even then – because the ESG door is where the buck stops and asks for permission to do good works.

At its core, ESG is about money. Has always been. Plain and simple. It’s been about money doing well. Money with a conscience doing conscientious work. And while today’s ESG thinking tends to be flavoured by corporate contexts, corporations are merely constructs of people and the conscientiousness, or not, with which they conduct themselves wearing company hats.

Thus, individual values are foundational to a corporate sustainability ethos.

John Wesley would likely agree.

Wesley, of course, is best known as the 18th-century founder of Methodism – an evangelical movement that took root within the Church of England’s ongoing working out of internal reforming tensions. Wesley’s focus, in large measure, was driven by an intense orientation to personal accountability bolstered by an equally strong sense of social justice. His followers took persuasively significant leadership positions on slavery and prison reform.

But Wesley was also a pragmatist in terms of things financial. There’s an interesting linkage between his evangelism and the current, albeit more secular, evangelistic fervour attached to today’s ESG dollars and the way they’re spent and invested. That pragmaticism found expression in the way he preached about money. He was alert to the dangers of unfettered wealth for personal gratification, but also aware of the philanthropic opportunities associated with social stewardship.

In many ways, he presaged the emerging tensions between shareholder capitalism and its ESG-oriented counterpart, stakeholder capitalism.

His sermon on The Use of Money has been interpreted and reinterpreted countless times and in countless contexts. Even today we can still tease out many timeless analogues – even those of a more secular flavour.

Our 18th-century “ESG” is Wesleyan shorthand for Earn, Save, Give – and while the cleric might be astounded that his maxims have 21st-century value, he would almost certainly agree that his principles were both a response to the exigencies of his times, but also an impulse to more constructively shaping his world’s future state.

Even a secular reading of The Use of Money produces a resonance of alignment with many of the values associated with the current ESG movement – and, thus, the first principles are aligned over time because, at its core, ESG is indeed about first principles of societal good.

The key here, of course, is for ESG and sustainability professionals to gird their ramparts with evidence that socially responsible thinking – money acting conscientiously, and demanding conscientiousness in return for its return – is not a spontaneous product of the here-and-now but rather an evolutionary force gaining momentum over time. Its current incarnation – the three-letter tripod of ESG – is not a fad or passing fancy. Pointing to historical precedent that demonstrates how ESG’s fundamental driving principles have evolved over time will help defend the critiques and attacks which are coming with increasing frequency. Indeed, in 10 years, the letters may well be different as society adapts to, and grapples with, the issues of the moment – but the foundational drivers will still be there.

Thus, contextually, issues like climate health, indigenous reconciliation and gender inclusivity can be clearly linked to their antecedents in generations past, just as they will themselves be antecedents linking to issues of tomorrow.

Indeed, the ideas motivating socially responsible investing and de-risking business are almost as old as time. Man’s ability to create alphabetized shorthand acronyms should be seen as nothing more than a talent to take issues of the day and merge a movement around them. History suggests ESG thinking has had several different zeitgeist moments over time, but has been on a relatively stable upward trendline of impact that connects and aligns over the decades.

Wesley’s work has been subjected to much scrutiny in the last two hundred years. But even a superficial parsing of The Use of Money’s three pillars – Earn all you can, Save all you can, Give all you can – demonstrates alignment with the way ESG proponents square their circle these days. In the spirit of true ESG thinking, the letters cannot be prised apart; rather, they are interlocked and interdependent and lean on each other for support.

Earn all you can: While the central argument here is about personal prudence and ensuring a stable (if frugal) financial framework that ensures a person does no harm to themselves, Wesley also speaks directly to financial undertakings which might be problematic or harmful to “your neighbour’s” health and the societal and physical conditions in which business gets done. The single word “harm” is central. Bottom line, if channelled, Wesley might say it is possible to build an ethically sound business that can be profitable without causing undue harm to the environment and, by extension, to the environment in which people make their homes. Remember, Wesley lived the realities of the Industrial Revolution – where society started to experience firsthand the consequences of unfettered capitalism on the physical environment.

Save all you can: In a Wesleyan context, saving is all about social good. The quality of a society’s overall “life quality” can be measured by the prudent management of money – via investments that eschew privileging wealth for individuals to the neglect or detriment of the greater good. While for most current sustainability ESG proponents, the “S” is the softest and most difficult area to quantify, a Wesleyan approach advises simplicity and doing the best work possible on behalf of the largest social impact possible – and assessing from there.

Give all you can: Wesley was all about strict governance and sticking “religiously” to the principles he espoused. For Wesley, his first two principles – earn and save – found ultimate practical expression in “give”. For Wesley, “giving” and “governance” are simply different faces of the same coin. Directors of today’s modern corporation who take their legal and moral obligations seriously might find in Wesley a kindred “director-in-spirit”. As they deliberate their obligations to an increasingly diffuse spectrum of stakeholders, contemporary directors find themselves negotiating the tensions between shareholder and stakeholder capitalism. Obviously, he didn’t use those terms, but it is within the broader stakeholder space that Wesley suggests money does its greatest work.

Wesley was a Methodist and a methodist, the former being a product of the latter, in that he advocated for a precise, methodical, and measured approach to money and its good works. It was the same methodical resolve he brought to the spiritual dimensions of his life. One might also suggest he would appreciate today’s approach to the data, transparency, and disclosure dynamics which characterize much ESG thinking.

But such thinking and the good works it implies is in many ways at an existential crossroads: ESG is under assault from many quarters for many reasons – not the least of which is a generation of ESG practitioners unfamiliar with the movement’s timeless tenets. Instead, they’re labelled as faddishly woke, with no grasp of how the real world works. Without historical references with which to tether ESG’s current state to a rich and textured past, being woke takes on a hipster negativity and thus suffers in the credibility department.

But it’s clear John Wesley was a pretty woke dude.

ESG movement critics are very, very good at one particular strategy: inserting various socio-economic and socio-political wedges to rupture the power dynamic between an honourable past and a promising future.

Anyone who professes to be a modern-day ESG proponent must also recognize they’re also the guardians of a way of thinking that reaches far back into the past. John Wesley’s view of money and his belief in how it should work is but one of many examples.

All ESG and sustainability proponents must seek out their own Wesleyan point of historical reference – and use it to protect the movement’s progress by creatively connecting the dots of the past to those of the future.

Bill Whitelaw is the Managing Director of Strategy & Sustainability with Geologic Systems.

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