ESG vs. Social Impact Enterprises
Yesterday I attended a webinar by the American Sustainable Business Network, which I recently became a member of. The speakers drew a clear distinction between ESG efforts and social impact enterprises.
Social impact enterprises are holistically about positive social and environmental impact in their business model and have their purpose fully engrained in their decision-making processes throughout their organization. Everything they do is about positive impact. It's their entire reason for existence.
ESG (Environmental, Social, & Governance) is applicable mainly as awareness and risk management scorecard practices, especially for large businesses doing public reporting - such as publicly traded Fortune 500 companies. ESG is also a metric for outside investors to understand a company's environmental and social governance behaviors.
That differentiation resonated with me.
I am more passionate and better positioned to add value to the social impact enterprise model.
However, I still see the good in ESG efforts where large consulting firms such as Deloitte, McKinsey, BCG, Korn Ferry, and others are resourced appropriately to make an impact.