Restoring trust in ESG investing through the adoption of just transition ethics

The prominent growth in environmental, social and governance (ESG) investment is evident, with the number of global assets managed sustainably more than doubled over the last decade. This trend is expected to continue until 2030. This type of financial data is positive but given the United Nations stated 'climate emergency' and 'climate survival' in society today, there needs to be an even greater acceleration of growth in ESG investment. Unfortunately, significant negativity has emerged on ESG in recent years. This 'Cutting Edge' study explores the reasons why and how ESG investment has veered off the journey towards enabling society to achieve both its targets under the 2030 United Nations Sustainable Energy Agenda and the 2015 Paris Agreement. It examines the factors prompting leading multinational companies, particularly in the energy and food sectors, to shift their corporate strategies. The key message advanced is that ESG frameworks and guidelines are not problematic; rather, the issue lies in the practice of ethics in decision-making within corporations. Addressing this ethical challenge, which is at the heart of ESG practices, across different professions and disciplines can rebuild trust among stakeholders in ESG investing. This form of interdisciplinary ‘just transition ethics' can re-orient us back on the journey towards a just and sustainable world. •Reviews the importance and positive impact of ESG investments.•Negativity concerning ESG is noted but is misguided.•Key challenge is to diffuse ethics into ESG decision-making and frameworks.•Advances the need for ‘just transition ethics’ to align ESG with the just transition.