Forum Home Page [see Broadridge note below]

 The Shareholder ForumTM`

Fair Investor Access

This public program was initiated in collaboration with The Conference Board Task Force on Corporate/Investor Engagement and with Thomson Reuters support of communication technologies. The Forum is providing continuing reports of the issues that concern this program's participants, as summarized  in the January 5, 2015 Forum Report of Conclusions.

"Fair Access" Home Page

"Fair Access" Program Reference


Related Projects 2012-2019

For graphed analyses of company and related industry returns, see

Returns on Corporate Capital

See also analyses of

Shareholder Support Rankings


Forum distribution:

Corporate consultant supports need to measure sustainability of investments


For the report summarized in the article below, see


Source: Bloomberg, August 10, 2022, article





ESG’s ‘Social License’ Will Endure Even If the Letters Don’t

McKinsey says the turbulence surrounding the concept’s components doesn’t change the fact that it’s here to stay.

Climate activists from Extinction Rebellion gather during their "Blood Money March" protest near the Bank of England in London on Aug. 27, 2021.
Photographer: Hollie Adams/Bloomberg


By Tim Quinson

August 10, 2022 at 6:23 AM EDT

It’s been a bumpy stretch for adherents of investment strategies based on environmental, social and governance data.

Much has been written about how Vladimir Putin’s February invasion of Ukraine raised geopolitical questions about why ESG-focused funds were even invested in Russia. Then markets tanked, with many huge ESG funds getting slammed for posting losses worse than those suffered by benchmarks, thanks to their massive holdings in beat-up tech stocks.

In a new paper entitled “Does ESG Really Matter—and Why,” consultants from McKinsey & Co. run through the many reasons why ESG has attracted such intense criticism of late. But they ultimately conclude that, regardless of the current turbulence surrounding its specific components, ESG’s underpinnings and the “social license” adherence to them will remain important for companies far into the future.

Detractors complain ESG is often just public-relations cover rather than true corporate belief, where greenwashing is employed to profit off of unwitting environmentally and socially conscious investors. The concept itself is also seen as an odd bird, a weird combination of ill-defined elements whose focus should mainly be on environmental sustainability.

The nebulous nature of ESG is clearly illustrated by the lack of agreement on its meaning. For example, while credit ratings from Standard & Poor’s and Moody’s Investors Service are in sync about 99% of the time, ESG scores from six of the most prominent ESG ratings providers are found to be comparable closer to 54% of the time, according to a paper cited by McKinsey. And even when ESG can be measured appropriately, there’s often no meaningful relationship with a company’s financial performance. (Bloomberg LP, the parent of Bloomberg News, also provides ESG data, analysis, indices and scores.)

But even with its inherent problems, what ESG represents at its base is critical to modern corporate decision-making, McKinsey says.

“While acronyms will come and go, the substance of what matters long term to companies and their stakeholders won’t change,” said Hamid Samandari, a senior partner at McKinsey who was part of five-person group that co-authored the article.

Companies are increasingly going to be under pressure to ensure they can “build purpose into their business models in a sustainable way and respond to their stakeholders’ growing focus on the impact of the company’s actions on the environment and society,” added Lucy Pérez, who’s also a senior partner and co-author.

The group examined the question of whether companies that show an improvement in ESG ratings over several years exhibit higher shareholder returns, as has been claimed by proponents. While they find some early indications of a correlation, they contend that the numbers are inconclusive.

McKinsey instead says the main reason for a company to focus on ESG is to maintain and enhance its so-called social license. Regardless of the current debate, many companies are advancing on the sustainability front to improve their long-term financial performance. More than 5,000 companies, for example, have made net-zero commitments as part of the United Nations’ “Race to Zero” campaign, and most businesses are being forced to adapt to the climate crisis. Moreover, some 90% or more of companies in the S&P 500 now publish ESG reports.

For the best outcome, companies should focus on ESG improvements that are informed by and support the evolution of their business models, even if the improvements don’t directly lead to higher ratings, the McKinsey authors wrote.

And there are tangible risks for companies that don’t take action.

“If companies, particularly those with significant externalities, such as high-emitting industries, hold out for perfect data and a ‘flawless’ rating process, they may not have a business in 20 to 30 years,” they warned.


©2022 Bloomberg L.P. All Rights Reserved 



This Forum program was open, free of charge, to anyone concerned with investor interests in the development of marketplace standards for expanded access to information for securities valuation and shareholder voting decisions. As stated in the posted Conditions of Participation, the purpose of this public Forum's program was to provide decision-makers with access to information and a free exchange of views on the issues presented in the program's Forum Summary. Each participant was expected to make independent use of information obtained through the Forum, subject to the privacy rights of other participants.  It is a Forum rule that participants will not be identified or quoted without their explicit permission.

This Forum program was initiated in 2012 in collaboration with The Conference Board and with Thomson Reuters support of communication technologies to address issues and objectives defined by participants in the 2010 "E-Meetings" program relevant to broad public interests in marketplace practices. The website is being maintained to provide continuing reports of the issues addressed in the program, as summarized in the January 5, 2015 Forum Report of Conclusions.

Inquiries about this Forum program and requests to be included in its distribution list may be addressed to

The information provided to Forum participants is intended for their private reference, and permission has not been granted for the republishing of any copyrighted material. The material presented on this web site is the responsibility of Gary Lutin, as chairman of the Shareholder Forum.

Shareholder Forum™ is a trademark owned by The Shareholder Forum, Inc., for the programs conducted since 1999 to support investor access to decision-making information. It should be noted that we have no responsibility for the services that Broadridge Financial Solutions, Inc., introduced for review in the Forum's 2010 "E-Meetings" program and has since been offering with the “Shareholder Forum” name, and we have asked Broadridge to use a different name that does not suggest our support or endorsement.