‘The pushback was inevitable, but we need to take responsibility for its longevity’
John Morrison on why a better version of sustainability will emerge after the backlash, but not until 2030
John Morrison was relieved when the Corporate Social Responsibility (CSR) movement collapsed after the 2008 financial crisis.
“It was good that it died, because CSR was basically social offsetting,” says the sustainability veteran, who recently stepped down as CEO of the Institute for Human Rights and Business.
What came afterwards, Morrison argues, was markedly better.
“We got the UN Guiding Principles on Business & Human Rights and Net Zero, and other things that brought us closer to a business case,” he tells Real Economy Progress.
Having started his career in corporate sustainability at British retailer The Body Shop three decades ago, Morrison has since headed multiple global initiatives on human rights, and advised governments, development banks and companies like John Lewis and Tetra Pak.
He’s also just written his third book, exploring the current ‘ESG backlash’.
While the death of CSR was driven by the sudden shrinking of companies’ philanthropic budgets, the ESG backlash has proven more complex and far more stubborn.
Just this week, four US Attorneys General filed lawsuits against Institutional Shareholder Services, alleging that the proxy advisor had misled consumers by simultaneously considering ESG risks and claiming to be objective and financially-focused.
A few weeks earlier, the world’s biggest credit ratings agencies were told by 23 attorneys general to ease off on their consideration of climate risk when assessing businesses and states, or face legal action.
Companies, investors, insurers, banks and NGOs have all received similar threats over the past two years, while European lawmakers have rowed back more quietly, but arguably more chaotically.
Morrison says some pushback was inevitable as sustainability became mainstream.
“But we need to take more responsibility for its depth and longevity,” he argues. “Because we’re all partly to blame for that – we were happy to let the conversation about implementation become too utopian and imprecise.”
This is down to “the wrong people” being in charge, he continues.
“We behave like we’re still activists, but at some point we became the orthodoxy and haven’t behaved with that level of responsibility – we still don’t see ourselves in that way.”
Recovery will need to involve “more consciously systematising and operationalising sustainability” Morrison says, and working out what he describes as “the bedrock”.
“Sustainability folk have to find the point in each business below which sustainability will not drop, because after that it becomes completely necessary. You need to focus on the aspects for which, if a chief operating officer spoke to a chief sustainability officer, they’d agree without debate.”
According to his book, it will take until the end of the decade for the worst of the ESG pushback to subside, but – just like with CSR – what emerges at the other end will be better.
For starters, there will be an even greater focus on materiality, Morrison thinks, and an end to “celebrity CEOs and big pledges”.
“We’ll see the chaff cut back, and less over-extension and greenwashing,” he predicts.
“We’ll be stronger by the time we get to 2030, but we’ve got more nonsense to come in the meantime, without a doubt.”