There are a few acronyms and terms of art that I will use frequently, so here are their (brief) definitions (as I think of them and use them, anyhow).

  • SRI = Socially responsible investment. It encompasses a variety of approaches to incorporate environmental and social criteria into investment portfolios, often but not exclusively public equity investments. Also termed “responsible investment.”
  • CSR = Corporate social responsibility. CSR is a much debated concept, as there are many activities that fall under the rubric of CSR without necessarily admitting “responsibility” per se. Similar to what has been referred to by some (e.g. Bill Gates) as “creative capitalism,” though that is also by no means a well defined term. Aka “corporate responsibility.”
  • ESG = Environmental, social, and governance. This term (an adjective, for what it’s worth) refers to the “extra-financial” factors that influence corporations and society, from resource use to labor standards to shareholder rights. The concept is also often termed “extra-financial” in so much as the measurements of ESG performance are often presented in non-monetary terms, though the results of poor ESG performance could very well have financial impacts sooner or later. ESG is not a particularly satisfying term, but it’s at least more specific than simply categorizing the set of topics as “sustainability,” given that sustainability is much, much broader than even the already broad “ESG.”
  • Responsible. Within the realm of responsible investment and corporate responsibility, the connotation of responsibility is much more ethical and voluntary, as opposed to speaking of legal or even widely accepted social obligations. As a result of this link to ethics, there is often a lack of objective criteria against which to judge responsibility. This is particularly salient in areas such as contraception or gay rights, where two “responsible” investors could have diametrically opposed viewpoints.
  • Sustainable. Sustainability is more objective a concept than responsibility. Sustainability is less related to ethics than to economic and scientific considerations. In the words of a UN report from 1987, “sustainability is the ability of the current generation to meet its needs, without compromising the ability of future generations to meet theirs.”  Because it relates to the entire system rather than an individual ethical perspective, it is somewhat misleading to refer to a particular part of the system (e.g. a single corporation) as “sustainable,” if it is part of an unsustainable system, though it is possible to refer to particular practices as “unsustainable.” As an example, in the same way that it would be unsustainable to fuel one’s fireplace with the kitchen table and chairs and to store your garbage in the basement, we can be reasonably certain that it is unsustainable to use or destroy our limited natural resources without thought to their depletion, or to pollute our air, water, and soil without thought to their reduced ability to support healthy life. While ethics are relevant to one’s approach to confronting these problems, the sustainability of the natural and social ecosystems is not fundamentally an ethical question. Similarly, “sustainability” should not be confused with “justice” or “social justice.” Here I am very much getting into my personal interpretation of the concepts, but while working towards sustainability can make the system more just, inequalities and inequities of varying degrees may persist in an objectively “sustainable” system. [That is not to say that inequality should or must persist, but rather that sustainability and justice are two distinct if complementary goals to pursue.]

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