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Hein J.M. Knaapen June 28 2022 7 min read

Can a Business Still 'Do Good' While Creating Enterprise Value?

Businesses everywhere are being prodded, pushed, and pulled to be responsible for the “greater good.” How will you, as CEO, respond?

You probably don’t want to unconditionally join the chorus of idealists who address environmental, social, and governance concerns as the first and foremost priority and turn a blind eye to eroding enterprise value. Neither do you want to be seen as wasting time and resources in vain, superficial babble about social responsibility and environmental sustainability. Nor do you want to run the acute risk of actually destroying value by attempting to bury the whole ESG conversation—even if you believe this is not something worth pursuing. (In this regard, ignorance is not bliss. When I worked for ING, the corporation was fined for failing to spot money laundering activities, actually destroying a significant amount of the enterprise’s value.)The truth is it will be almost impossible for you and your company to escape controversy and conflict around what you are doing and what you are not doing related to ESG. Whatever path you choose, there will be consequences. That should not prevent you from taking action.


Make no mistake. Doing good is not guaranteed to make you money. As Yves Bonzon at Julius Baer said, “ESG is not about achieving systematic outperformance…. [Yet] It can be a useful tool for investors to express their values in portfolios and hence derive additional non-monetary benefits from investment activity.”1 However, make money you must. For taking care of values only happens on the back of value. If you do not create and deliver value, you do not get paid. And if you do not get paid, you cannot pay for any of the many things your business is being held accountable for in terms of society’s honourable desires and ambitions.

Driving values on the back of value is not a problem best solved by creating a parallel universe in your company just to deal with it.

In every situation and every challenge, across multiple geographies and diverse industries, we consistently see there is only so much that really matters, both in terms of value creation and ESG concerns. Focus is imperative. That is the good news. It means your best response is to mindfully embed noble ESG ambitions in the value creation activities and primary processes of your business. These clarifying questions can kickstart your thinking:

How much potential value could each ESG priority add to your bottom line?
Making your ESG ambitions land in the business strategy and actually create value will take clarity. In working with companies on matters of value creation, I have repeatedly seen that putting a number on your ambition requires an initial boldness. The number makes progress measurable; however, coming up with it can be challenging. If you are about to do something you have never done before, imagine—and quantify— how much value might be destroyed by not incorporating each ESG ambition into your business strategy. If a financial number feels uncomfortable, use other KPIs that your stakeholders recognize to express value.

Which vital few initiatives will have a disproportionate impact on your results?
Reflect on your company’s place in the world and what the business does. What value does it create today—and what value will it create tomorrow? There will be a limited number of hotspots in your organization where a disproportionate amount of that value will be created. Valiantly slice out the work to be done to deliver the value, including the main initiatives at these hotspots. Boldly reduce your organization’s perpetually long list of initiatives down to a very limited set of actions at these hotspots.

What elements of an ESG agenda will your people willingly get behind?
You will have to explain to them how reducing your organization’s environmental impact and prioritizing diversity will serve the business and positively impact long-term performance. And you will have to put your money where your mouth is. It will be hard to remain non-committal. Sometimes you will have to do things you—and they—won’t like. (For example, if you feel there are not enough female leaders in your company and you think that is a problem, then you will, at some point, have to fire men to make space for more women). Remember, people are more likely to invest their energy in what is closest to their hearts and minds. That will motivate them to approach their work with a different awareness, do things differently, and even take on different work.

If you hear this as an unadulterated plea for capitalism, you are correct. As the Broadway show tune goes, “Money makes the world go round.” There is more value to be gained, more value to be created, more value to be delivered in being proactive and focused about ESG than in abiding and waiting for the government to regulate what we can and cannot do. For regulations often deny us the ability to create value, making it harder to deliver value. And that is a rough path to follow to success.

1. Merryn Somerset Webb, “There is far too much groupthink in ESG investing,” Financial Times, April 29, 2022. Accessed May 5, 2022 at f6fcf08c-294f-4953-8bc5-7b98426a2b8c.

Hein J.M. Knaapen

Hein is an internationally recognized expert on HR innovation, talent development, and organizational capability building. As an advisor and mentor, he aims to guide leaders toward maximizing the return on their talent investments.

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