The Road to Hell: How purposeful business leads to bad marketing and a worse world And how human creativity is the way out by Asbury Nick

Author:Asbury, Nick
Language: eng
Format: epub
Publisher: The Choir Press
Published: 2024-09-29T00:00:00+00:00

Purpose distracts from climate action

In January 2018, BlackRock CEO Larry Fink published A Sense of Purpose, the first in a series of annual letters to the world’s CEOs that spelt out the purpose agenda and urged every company to follow it. Around the same time, BlackRock welcomed a new Chief Investment Officer for Sustainable Investing, who would lead efforts to incorporate so-called ‘ESG’ activities across the firm’s investment activities.

Originating in the UN’s ‘Who Cares Wins’ report of 2004, ESG stood for Environmental, Social and Governance: the three measures by which purposeful corporations would be judged. The precise meaning of each term, and how it should be measured, remains inconsistent. ‘Environmental’ broadly stands for sustainability and climate action. ‘Social’ stands for diversity and representation. ‘Governance’ stands for corporate accountability, but in the ‘stakeholder’ sense where a company is answerable to everybody in vaguely defined ways. Over time, ESG has become broadly synonymous with the ‘do well by doing good’ ethos of the purpose movement.

BlackRock’s new appointee was Tariq Fancy, a one-time investment banker who had left to start up an educational non-profit called Rumie. But when the BlackRock offer came, he saw it as an unmissable opportunity to do good at scale. As he later explained: “BlackRock was then and remains today the world’s largest investment firm. At the end of June [2021], it had $9.5 trillion under management and was closing in on what the Wall Street Journal called the ‘once unthinkable’: $10 trillion in assets.75 Managed well, that kind of firepower could create far more positive impact for the world than possible running Rumie.”

Over the next 21 months, Tariq Fancy enjoyed a unique vantage point from which to see the inner workings of the ESG movement in which he sincerely believed. By September 2019, disillusioned and alarmed, he left BlackRock and began work on a three-part essay about his experience. The Secret Diary of a Sustainable Investor shed light on what Tariq Fancy saw as a doomed attempt to answer “inconvenient truths with convenient fantasies”. Towards the end, he writes: “In sounding the alarm, my hope is to expose this illusion for what it is: a dangerous fantasy that primarily serves the interests of the oldest and the richest, and all at the expense of the youngest, the poorest, and the most diverse and historically underserved communities in the world today.”

The story had started with high hopes: “I sincerely believed that while sustainable investing was not perfect, it was a step in the right direction in the critical question of how business and society should intersect in the 21st century.” But the sense of unease began to rise as Fancy attended an ESG awards dinner in Stockholm: “I grew up believing that the warm feeling of saving the world generally only came through some level of selflessness and sacrifice, almost as a necessary cost, in line with the images of those supreme beings who had joined the Peace Corps and were in some faraway land working happily in the service of others.

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