I watch the enrollment trends of my seventeen courses and sometimes those trends prove very interesting. About a year ago I noticed a dramatic increase in enrollments in my course on Transformational Leadership. I noticed that a major source of this increase was from one of the largest accounting/consulting companies.

One of the fastest growing areas of consulting is “ESG” (Environmental, Social and Governance) consulting. Why? Because major institutional investors are now making investments based on a corporation’s ESG score. Almost every company is now reporting its activities and plans in environmental responsibility, social impact, and ethical governance. At the heart of ESG is a fundamental understanding of values, principles, ethics that guide the leaders of companies.

Since my earliest writings I have been promoting the importance of developing a strong value system in a company. All cultures are built on the strength of a value system and they all decay and decline when common values are eroded. One doesn’t have to spend too much time watching the news to see the dangers present when we lose faith in those values that create unity among a population. The lose of values, the disintegration of social unity, always precede the material/economic decline of a civilization, country or company.

I think the growing concern among corporate leaders about the dangers of social disintegration and the growing investment payoff of improved ESG performance are increasing the relevance of Transformational Leadership. It is worth your time and essential to the well-being of your company that you focus and clarify your own corporate value system and ESG performance.

ESG scores are typically based on the following:

Environmental:

  • Climate Impact and Strategy
  • Water and Resource Depletion
  • Greenhouse Gas Emissions
  • Deforestation
  • Waste Disposal

Social:

  • Health and Safety
  • Working Conditions
  • Employee Benefits
  • Diversity and Inclusion
  • Human Rights
  • Impact on local communities

Governance:

  • Ethical Standards
  • Board Diversity & Structure
  • Stakeholder Engagement
  • Shareholder Rights
  • Pay for Performance
  • Transparency and Disclosure
  • Anti-corruption measures