{"id":560,"date":"2022-06-04T18:01:36","date_gmt":"2022-06-04T18:01:36","guid":{"rendered":"https:\/\/aplanet.org\/resources\/?p=560"},"modified":"2023-12-13T10:56:32","modified_gmt":"2023-12-13T10:56:32","slug":"is-esg-synonymous-with-moral-obligation","status":"publish","type":"post","link":"https:\/\/aplanet.org\/resources\/is-esg-synonymous-with-moral-obligation\/","title":{"rendered":"Is ESG Synonymous with Moral Obligation?"},"content":{"rendered":"\n<p><strong>ESG is increasingly important for businesses across the world<\/strong>. As <a href=\"https:\/\/www.wbur.org\/hereandnow\/2021\/09\/24\/patagonia-politics-activism\" target=\"_blank\" rel=\"noreferrer noopener\">Patagonia\u2019s CEO, Ryan Gellert<\/a>, highlights, \u2018we humans have created problems that threaten our very existence. To solve them, we will need all the levers of society.\u2019 For Gellert, companies are the best tool to rectify this situation.<\/p>\n\n\n\n<p>When businesses need to \u2018do the right thing,\u2019 the person in charge of decision-making or the CEO needs to <a href=\"https:\/\/www.forbes.com\/sites\/forbesnonprofitcouncil\/2021\/12\/15\/the-conscience-of-a-ceo-the-new-moral-imperative\/?sh=65324e1d4f67\" target=\"_blank\" rel=\"noreferrer noopener\">maintain a balance between philosophy, personal beliefs and the objective of achieving maximum profitability.<\/a> This has prompted a vision increasingly shared by consumers: businesses are <strong>morally obliged <\/strong>to contribute to social wellbeing and to act in order to make the world a better place.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_1 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Index<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Alternar tabla de contenidos\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/aplanet.org\/resources\/is-esg-synonymous-with-moral-obligation\/#The_moral_obligation_of_businesses\" >The moral obligation of businesses<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/aplanet.org\/resources\/is-esg-synonymous-with-moral-obligation\/#What_does_ESG_have_to_do_with_morality_in_business\" >What does ESG have to do with morality in business?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/aplanet.org\/resources\/is-esg-synonymous-with-moral-obligation\/#The_moral_and_social_obligations_of_companies_5_areas_to_consider\" >The moral and social obligations of companies: 5 areas to consider<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"The_moral_obligation_of_businesses\"><\/span>The moral obligation of businesses<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>In the business world, the <a href=\"https:\/\/smallbusiness.chron.com\/moral-obligation-business-law-78910.html\" target=\"_blank\" rel=\"noreferrer noopener\">moral obligation <\/a>of businesses used to be limited to respecting the law that governed transactions between organisations and individuals. However, this <strong>morality <\/strong>has been extended to respect all stakeholders, which is known as <a href=\"https:\/\/ro.uow.edu.au\/cgi\/viewcontent.cgi?article=2107&amp;context=aabfj\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>stakeholder theory<\/strong><\/a>.<\/p>\n\n\n\n<p>This theory considers that company decisions generate wide-ranging effects. These affect different groups of people, both internal and external to the organisation. The objective is to avoid unwanted consequences. To prevent them from happening, the needs and rights of the individuals affected must be taken into account.&nbsp;<\/p>\n\n\n\n<p>For this reason, there is now an <a href=\"https:\/\/smallbusiness.chron.com\/ethical-obligations-business-70715.html\" target=\"_blank\" rel=\"noreferrer noopener\">ethical obligation<\/a> in all areas of the business world. It can be seen in politics, decision-making, sales, pricing and also when interacting with staff, suppliers or contractors.&nbsp;<\/p>\n\n\n\n<p>This vision, which was put forward by the philosopher<a href=\"https:\/\/philarchive.org\/archive\/SCHWBF\" target=\"_blank\" rel=\"noreferrer noopener\"> Robert C. Solomon<\/a>, considers that conflicts may appear between business, morality, and social wellbeing. When this happens, businesses must step up. In this way, moral obligations are created that aim to mitigate relevant problems, such as climate change.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_does_ESG_have_to_do_with_morality_in_business\"><\/span>What does ESG have to do with morality in business?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The concept of <strong>ESG<\/strong> can be translated as the moral duty of a business. In other words, it refers to the moral impact of a business\u2019 activity, and particularly that of governance. In this sense, the double materiality of non financial factors needs to be considered. Nevertheless, it is necessary to respond to certain questions related to corporate governance. These need to look further than subjects related to business administration or the economy.<\/p>\n\n\n\n<p>Vision and philosophical wisdom can offer solutions, shape ideas and create answers. At the end of the day, <strong>ethics is about defining whether concepts are correct or not.<\/strong> In addition, <strong>morality <\/strong>should not be forgotten. This consists of a company\u2019s reputation or virtue, which is based on whether or not it shares the same values as society. For example, <a href=\"https:\/\/boardagenda.com\/2021\/10\/13\/gen-z-investors-focus-on-ethics-and-esg-poses-a-challenge-for-boards\/\" target=\"_blank\" rel=\"noreferrer noopener\">80% of investors from Gen Z<\/a> would take into account <strong>ESG <\/strong>when selecting companies to invest in.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"The_moral_and_social_obligations_of_companies_5_areas_to_consider\"><\/span>The moral and social obligations of companies: 5 areas to consider<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>In order to properly associate <strong>morality <\/strong>and social obligations of business, one must act in<a href=\"https:\/\/www.forbes.com\/sites\/forbesnonprofitcouncil\/2021\/12\/15\/the-conscience-of-a-ceo-the-new-moral-imperative\/?sh=2936f9d94f67\" target=\"_blank\" rel=\"noreferrer noopener\"> five areas<\/a>:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Focus on stakeholders:<\/strong> it is necessary to go further than simply generating value for stakeholders. Businesses need to impact the different stakeholder groups, which they will achieve through developing a statement of purpose. It will be signed by the board of directors and will define how to create value for stakeholders.<\/li>\n\n\n\n<li><strong>Account for social and environmental costs:<\/strong> the impact of climate, informal settlements and other related aspects must be accounted for. They represent the costs to be quantified, as investors may need them in their decision-making.<\/li>\n\n\n\n<li><strong>End quarterly earnings:<\/strong> such an approach is counterproductive in the long term. Moreover, it does not help to account for environmental and social impacts.<\/li>\n\n\n\n<li><strong>Seek regenerative solutions:<\/strong> it is necessary to determine the impact that a company generates in the use of natural resources. In this way, it will be able to innovate to achieve a net benefit in their use.<\/li>\n\n\n\n<li><strong>Prioritise responsibility:<\/strong> companies must actively participate in the communities in which they operate. This strengthens their network, whilst also supporting social and civic institutions.<\/li>\n<\/ul>\n\n\n\n<p>In short, <strong>ESG <\/strong>helps companies to go beyond their economic activity. Ethical reasoning will help them to resolve economic and social conflicts. In this way, they will be able to make better decisions to develop their strategies. Moreover, reporting and compliance with this matter is becoming a financial obligation, as it is synonymous with transparency. <a href=\"https:\/\/aplanet.org\/demo\/\" target=\"_blank\" rel=\"noreferrer noopener\">APlanet <\/a>can help you to achieve it.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-css-opacity\"\/>\n\n\n\n<p><strong>Subscribe to our resource hub to keep up to date with the latest trends in the sector<\/strong><\/p>\n\n\n<p><!--[if lte IE 8]>\n<script charset=\"utf-8\" type=\"text\/javascript\" src=\"\/\/js.hsforms.net\/forms\/v2-legacy.js\"><\/script>\n<![endif]--><br \/>\n<script charset=\"utf-8\" type=\"text\/javascript\" src=\"\/\/js.hsforms.net\/forms\/v2.js\"><\/script><br \/>\n<script>\n  hbspt.forms.create({\n\tregion: \"na1\",\n\tportalId: \"5618409\",\n\tformId: \"c7796cce-5645-48c2-9c52-0cd692dd80d8\"\n});\n<\/script><\/p>\n","protected":false},"excerpt":{"rendered":"<p>ESG is increasingly important for businesses across the world. As Patagonia\u2019s CEO, Ryan Gellert, highlights, \u2018we humans have created problems that threaten our very existence. To solve them, we will need all the levers of society.\u2019 For Gellert, companies are the best tool to rectify this situation. When businesses need to \u2018do the right thing,\u2019 [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":1694,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","cybocfi_hide_featured_image":"","twitterCardType":"","cardImageID":0,"cardImage":"","cardTitle":"","cardDesc":"","cardImageAlt":"","cardPlayer":"","cardPlayerWidth":0,"cardPlayerHeight":0,"cardPlayerStream":"","cardPlayerCodec":"","footnotes":""},"categories":[6],"tags":[24,12],"class_list":{"0":"post-560","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-blog","8":"tag-csr","9":"tag-esg","10":"entry"},"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.2 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Is ESG Synonymous with Moral Obligation? - APLANET<\/title>\n<meta name=\"description\" content=\"Companies that follow ESG criteria are closer to an ethical management model, thus contributing to social well-being. 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