Social-Impact Efforts That Create Real Value

Companies should not expect to win over investors just by issuing sustainability reports and engaging in ESG standard practices. To build long-term profitability, boards of directors must pay more attention to ESG concerns—and a compelling corporate purpose should underpin their efforts. The authors of this article offer a research-based framework called SCORE to guide boards’ actions that is worth reading. Even going back two decades, Michael Porter draws a distinction between operational effectiveness and strategy. The former meaning, “performing similar activities better than rivals”; the latter “is about being different.” Following Porter’s distinction, an ESG program may deliver efficiencies and other operational improvements, but it will only boost long-term financial performance if it provides strategic differentiation from competitors. At P&C Global, an ESG approach has been an integral part of our corporate fabric for generations. Our unwavering commitment to supporting the environment, the arts, and in particular, diversity and inclusion are highly visible throughout our organization. In fact, you’d have to look hard to miss it. To that end, we’ll be making a concerted effort to make our own practices and actions more visible in the coming year.

Read the full Harvard Business Review article, here.

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