Danone stirs the ESG pot and sprinkles on some scepticism

Weather, global warming and climate change, according to NASA

/IT’S THE BUSINESS

“Making money is art and working is art and good business is the best art”
– Andy Warhol

It was Gillian Tett at the Financial Times who joined the dots and spelt out the words.

Fickleness. About. ESG.

Indeed, the corporate stance on Environmental and Social Governance appears all too shifting and contradictory this year.

As Ms Tett pointed out in the FT’s Moral Money section, Danone removed an ESG-espousing chief executive; Warren Buffett  refused to back climate proposals at shareholder meetings and rising oil prices may allow fossil fuel companies to skip reformist ideas, at least for now.

Let’s focus on the first item on that troubling list. Just days ago, a group of investors in Danone spoke out against the company’s performance compared to rival Nestle. Danone’s CEO, Emmanuel Faber, was dismissed. Mr Faber has been described by the FT as “one of the most visible advocates in global business for a more responsible capitalism in which companies do not only serve shareholders but also protect the environment, their employees and suppliers”. His departure may be a sign of the perils of thinking the pandemic and extreme climate-related events are changing corporate changing. Ms Tett quotes Stanford law professor and former member of the Securities and Exchange Commission: “It’s always dangerous to extrapolate from a sample size of one, but these developments challenge investors who believe that strong ESG initiatives are compatible with higher stock prices,” .

Basically, what that means is it doesn’t pay to be environmentally mindful. And it doesn’t matter if a company doesn’t pay heed to its effect on society.