Bright Insights Episode 2: ESG and Purpose

Written by

BCG BrightHouse

Jan 29, 2024 · 11-minute read

Director of Strategy and sustainability author Emilie Prattico talks with Professor at NYU Stern School of Business and sustainability expert Alison Taylor about how changing the planet for the better begins with changing corporate mentality and strategies in work and leadership. As the battle to fight climate change is heating up, the urgency for effective and sustainable solutions is intensifying. We must harness the collective power of our employee base to unlock transformative change.

Luminary Fellow Alison Taylor, a distinguished professor at NYU Stern School of Business and Executive Director at Ethical Systems, challenges oversimplification of ESG as a reporting exercise. Emphasizing a strategic focus over checkbox mentalities, she advocates for a balance between radical change and authenticity. Taylor champions collaborative, inclusive strategies, urging a departure from outdated top-down approaches and recognizing the transformative potential of employee engagement. In her reflections, she underscores the need for evolving leadership, focusing on humility, employee empowerment, and maintaining a strategic focus amid the dynamic landscape of ESG and purpose. Tune in to this enlightening video which complements the insights from our podcast episode, to gain valuable insights on steering the corporate world towards a more authentically sustainable and ethical future:

“What does Employee ESG Engagement look like?” – with Alison Taylor, Clinical Professor at NYU Stern School of Business and Executive Director at Ethical Systems

Tune in as we dive into what it means to be bold in a time when everyone’s making big commitments, unveiling the nitty-gritty tensions for both leaders and team members.

Listen to this and all episodes of our podcast, Bright Insights, on Apple Music or Spotify.


Emilie Prattico (Moderator)
Welcome to discussion on ESG and purpose. We explored this topic throughout our engagement with Alison Taylor. Allison is a clinical professor at NYU Stern School of Business, and she’s got expertise in many domains: strategy, sustainability, political and social risk, culture and behavior, human rights, ethics and compliance, stakeholder engagement, anti-corruption and professional responsibility. She’s also the executive director of ethical Systems, a research collaboration focused on ethical, organizational culture. And she’s written a book too, “Higher Ground, How Business Can Do the Right Thing in Turbulent World,” which will be published in February of 2024.

During our conversation we sought to dig deeper into what it means for a company to be bold in ESG, how a company can engage its workforce to advance its ESG efforts, and what it means to be a purposeful leader on these topics in times of rising stakeholder expectations.

So, Alison, let’s jump right in. First of all, can you tell us what we mean when we talk about ESG?

Alison Taylor
So, ESG is a catch-all term for high stakes debates about the role of business in society. We can see ESG treated as a reporting and disclosure exercise. ESG is a problematic term if it suggests box ticking on too many things vs. the strategic focus.

How do you set ambitious goals that are also credible? How do you drive accountability to meet those goals without generating impatience about incrementalism? How do you respond to these ideas about hypocrisy? How do you make it easier for corporations to admit to failure and challenges, which I think is needed for authenticity, but is clearly, very, very difficult, in this ESG scoring environment.

Absolutely. You know, pressure to say certain things that sound convenient, a feeling that you don’t really believe in that, but you’ve got to kind of say that, and that does open you up to being damned if you do and damned if you don’t, and so maybe again. If we think about goal setting, you need to be realistic and thoughtful with your whole workforce about what this is going to achieve, and what it isn’t.

Yeah. Companies are setting many goals, sometimes clearly unachievable, sometimes blatantly unambitious. So, what does it mean to be bold in ESG today.

What does it mean to be bold in an era where, being bold, and making flagship commitments, is what everybody is doing. I would really like to think about some of the tensions around the notion of making bold commitments in ESG.

There’s a lot of commentary that these goals so far out, nobody is, really putting their weight behind those. At the same time, there’s a lot of very real and very understandable frustration with incrementalism.

How can you navigate that tension between a real kind of thirst that you do something very radical with the fact that maybe change can’t happen very radically. So, there’s a tension, I think, between big picture commitments and then kind of the incrementalism and the real-time change that actually needs to happen. How do you get the weight behind that real-time change.

And what would you say are other tensions that companies face on this topic.

There’s a real tension between breadth and depth. Companies herd together for warmth; they herd together to avoid scrutiny. And they do the same thing. and what we’re seeing I think in the ESG space is a lot of breadth, a lot of ticking the box on thirty to forty things that to do something genuinely bold would probably mean saying, you know, “We understand all these issues are important. But here is where we’re going to focus. Here is where our organization can make the difference.”

It is about finding a way to be more focused, to be kind of bolder about what you’re not going to do, the problems that you’re not going to solve to have something more strategically authentic and relevant.


The companies I see that are most ambitious are in some ways the companies that recognize that there are limits to what they can do on their own or limits to the problems they can solve on their own.

Another tension is that there is a sort of hypervigilance about hypocrisy. There is an obsession with consistency. A company must be saying what it is doing and doing what it is saying. Arguably to adapt and drive change, you need more real-time adaptation. Should we be in an era of experimentation that is being undermined by the signaling of very bold commitments that you then need to stick to?

You’ve mentioned a few tensions that companies are facing. But the question I want to ask is, how can they overcome these tensions?

Should this be about the ‘how’ rather than the ‘what?’ If you’re going to set bold goals, that implies directive authoritarian leadership. It implies you are setting direction as a leadership team, but that maybe is not what we need. A lot of this seems more about mindset and humility and curiosity.

This all seems really key and important. But how do you from there define a bold ESG strategy? Is it one, then, that engages employees along the way?

Is it really valid on a topic like ESG or on a topic like Purpose to think of a strategy as something that the corporation imposes on its workforce? That’s antithetical to the ideals of ESG, which are exactly based on consulting and having genuine curiosity about the interest of your stakeholders.

Power creates blind spots. It’s very, very easy, I think, that ESG should be about the board and the C- Suite kind of sitting in a room, you need it involved in corporate governance. You need to set direction. You need to kind of get serious. But what are the things that your employees will be able to see, particularly in terms of your impact, that the senior leadership team, the board, they’ve got too much skin in the game. They are going to be missing, arguably, a lot of really important points about the impact of the business on the world.

What we are really looking for is to get employee engagement and employee culture of ESG to be a source of competitive advantage.

So, arguably you will never have a fully-realized strategy unless employees are on board and support that strategy, because it is your employees that are speaking to your investors, your suppliers, your customers, your communities, the general public.

So, how we can best involve employees in an ESG strategy?

What we need to be doing is treating this as employee co-creation of strategy that would help a company survive and thrive over the long term. We first set direction. We set the purpose, and then we use ESG concepts and frameworks to flesh that out and figure out how to implement it. This is something that employees need to be involved in and to co-create with the senior leadership team.


So, maybe It’s also thinking about how employees see their role in these ESG strategies and trying to leverage those internal networks.

Mm, that’s interesting.

They have 3 different frames. A Green Change agent is someone that sees themselves as driving change in the organization that maybe has networks that can be leveraged. A rational manager is more a middle manager. Maybe it’s sustainability team lead that’s going to senior executives and making a business case that is working within the system as it exists already and trying to drive change that way. A committed activist rather sees their role as battling internal resistance.

And then what you need to do is to give people some freedom of agency to how to design and meet those goals, but you need to provide the structure where they’re getting rewarded for putting in that effort.

You will have the best motivation, the best purpose, the best innovation, if you give individuals agency about how they complete their work. And so, therefore, any ESG initiative will fail unless it can engage and galvanize employees.

I’ve heard, and I think our listeners will have also heard, lots of new perspectives on how things are changing for employees. We know that leaders are facing challenges around a variety of topics from remote work, disengagement, quiet quitting. So, what is the way forward for a leader that wants to succeed.

If we think of setting Purpose and ESG goals and commitments as an investor messaging exercise, then we are suggesting that this is an exercise in the senior leadership team, we set goals, we communicate the goals to investors, and then we incentivize employees to perform. That is a very, very, very old fashioned and inappropriate view of what leadership is like today.

These kinds of top-down initiatives no longer work. There is maybe a need for emerging strategies in collaboration with the workforce rather than imagining that you can impose this top down. There should not be conversations that are restricted to just the senior leadership team. So, a lot of it is thinking, maybe, about the sources of expertise and who you’re bringing in, and how you’re participating and allowing employees access to that knowledge as well.

What we want and expect from leaders is changing, and it’s much less barking orders from the top, and much more listening and working with your workforce, and how to do that well. So, a little bit more executive humility would be lovely.

Good point. CEO job descriptions have changed really dramatically in the past 15 years. So, it’s a lot less technical skills. It’s a lot less “you’re a former CFO”, “you’ve got these kind of financial things,” and much more social skills, stakeholder engagement, diversity and inclusion, people from different backgrounds.

I think we underestimate how many senior executives are moved either by their workforce or their teenage children at the dinner table, and how few are really moved because of what someone’s put in an excel spreadsheet about the return on investment of ESG. And maybe, we shouldn’t always need a business case to do the right thing. And I’ve just personally seen, here is where an organization can make the difference.

Thanks for your time, Allison, and for such an inspiring conversation. You’re leaving us with a wealth of insights, and what will stay with me the longest is how to think about impact differently.

You underline the importance of being focused in order to be bold of sharing failures and also celebrating meaningful progress. You praised humility and leaders who make space for employees to be actors of change, and that, I think, will stay with me for a long time.

Thanks for your insights, Alison, and thanks for your engagement with BrightHouse.

Thank you so much.

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