The Path Forward on ESG: A Global and Interdisciplinary

Summary:

In this episode of The Corporate Director Podcast, Dr. Filipe Morais, Lecturer in Governance & Reputation at the Henley Business School and Independent Partner at AMROP discusses his latest book, “The Palgrave Handbook of ESG and Corporate Governance."

In This Episode:

1. Writing “The Palgrave Handbook of ESG and Corporate Governance": Morais discusses the inspiration behind his co-authored book.
2. ESG as a Strategic Focus: Morais shares insights around how issuers can include ESG as a strategic focal point rather than an add-on.
3. ESG Regulation in Europe: Morais gives his take on how other regions can learn from Europe to advance ESG regulation.

Writing “The Palgrave Handbook of ESG and Corporate Governance"

Morais starts off sharing a bit about his background: “Over the last 15 years I have become what can best be described as a governance nerd. I obtained a PhD in governance and leadership and ever since I have spent my life talking to chairs, CEOs, other members of the C-suite, corporate secretaries, legal teams and investors."

Touching on how the book came about, he says: “The book started with a collection of different people with a shared interest around the financial, legal, and economic management of governance. It's quite an interesting group based, in Lisbon, in Portugal, led by my colleague and co-author, Professor Paul Kamara. The idea was to have a book where people could find a range of perspectives on ESG regulation. We explored the key questions around ESG regulation, and whether or not we are headed in the right direction as a global society. We also included a set of chapters and articles as case studies, to shed some light on different types of companies and how they are going about their ESG journeys."

Morais also highlights the book's social purpose: "We are donating all proceeds from the sale of the book to a charity in Mozambique called Girl MOVE, which helps educate and mentor young girls in the region."

ESG as a Strategic Focus

Morais shares insights on how companies can move from having ESG as an add-on to it becoming integral to strategy: “The first thing is to establish a purpose that makes sense for your organization and is overseen by the board. That purpose will likely look different than it did thirty years ago."

He goes on, “The second piece to ensuring ESG remains a strategic focus is succession planning. This way, you can provide continuity and proper management of ESG goals over time. This can either come by bringing in outside talent that aligns with your organization's goals and strategy around ESG, or from within the organization by supporting and building a network of potential future executives.

The final piece, says Morais, is to integrate ESG goals and metrics into compensation to properly motivate executives. He adds, "However, this must be done in way to avoid greenwashing.”

“The board needs to work with and listen to both executive management and the wider investor base to find the firm's noble purpose. This purpose should be beyond profit, fulfilling a real purpose in society and justifying the existence of that business to a broad base of stakeholders.” - Dr. Filipe Morais, Lecturer in Governance & Reputation at the Henley Business School and Independent Partner at AMROP

ESG Regulation in Europe

Morais concludes with a few thoughts on how other regions can catch up with Europe on ESG regulation: “Globalization and a certain style of capitalism has been generating some unwanted outcomes along with the many good things that it brought us. It has become necessary that we seek a different balance between society, the environment, and business and economy."

He states, "Historically for Europe, there has been a 'Common Good' framework, whereas in the US, for example, the state has has intervened less frequently in the economy via regulation."

He continues: “The question is, how are we seeking a balance at the expense of innovation? At the expense of generation of value? In other ways?"

"As Europe continues making progress at these early stages, I suspect that other regions will quickly catch up when realize that there is something that they're missing in terms of regulation." -Dr. Filipe Morais, Lecturer in Governance & Reputation at the Henley Business School and Independent Partner at AMROP

Resources From this Episode:

• The Palgrave Handbook of ESG and Corporate Governance
• ESG Strategy, Leadership, and Integration in Irish Companies
• Girl MOVE