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Hand holding light bulb with ESG icon concept for environmental, social, and governance in sustainable and ethical business Source: Adobe Stock

Environmental, Social and Governance (ESG) is an old construct with a snazzy name and (ugh) another acronym. People tend to lump ESG with CSR whilst examining such standards as GRI, UN SDGs and TCFD. Oh, and don’t forget that DEI and serving LMI households also fall under ESG which may lead to LDI and CDFI certifications. By making simple things complex we lose sight of the perspective of David Blood, a pioneer in ESG investing, who provides a simple but effective definition of the topic: “… [the] explicit recognition that social, economic, environmental and ethical factors directly affect business strategy.”

As you cut through the clutter of this “new” field, it is important to recognize that there is strong evidence that ESG has always been part of the credit union ethos. As Edward Filene said in his 1924 book “The Way Out,” “I think I can truly say that I have always dealt with matters of social justice, cooperation and general welfare, not on the basis of philanthropy or paternalism, but as essential factors in the development of successful business.” The trick is how to effectively ESG with so many firms touting their latest “ground-breaking” DEI initiatives, glossy social impact reports and over-sized check ceremonies with local community organizations.

 

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