How Do We Measure Impact?

The path forward to progress is undoubtedly a winding road. As we’ve seen throughout the pandemic and the Black Lives Matter movement, it’s often disastrous events that reveal our shortcomings. The role of businesses has changed. We now expect companies to stipulate their DEI practices clearly alongside brand messaging. Nearly 75% of consumers demand that corporations have some give-back policy in place. ESG investing is no longer simply virtue signaling but one factor in a company’s long-term success.

                                                Image Cred: KXAN
While environmentalism and racial impact have been significant components of ESG ratings, a growing piece of the puzzle has to do with worker wages vs. corporate profits. As labor shortages create labor inflation and wage increases, companies that have maintained healthy operating margins are being exposed, not celebrated, by workers, politicians, and society at large. Those companies are getting called out for relying too heavily on contract or gig workers to maintain profitability, in direct contrast to the social mission of ESG companies.

Uber and Alphabet are garnering more negative attention for the ongoing issue of temporary workforces. The research nonprofit Just Capital applauded both Uber and Alphabet for their commitment to ESG goals but gave them both the dishonorable mention of using more contingent workers than actual employees.

For the full JUST 100, check out this list. For more on the topic of ESG investing, check out this episode of NPR’s Life Kit.