Two weeks ago, RI launched a survey to find out which words and phrases you would banish from sustainable finance discussions, ahead of this week’s Digifest.
We received nearly 200 nominations for lingo that is overused, misused, meaningless or unhelpful, so thank you to everyone who took the time to participate.
Top of the list was 'ESG' itself. It was the most unpopular word in our survey on its own, but it was also nominated as part of phrases: “ESG Stocks – what the Hell are these?” said one respondent, while another nominated “any word play on ESG”, asking: “Who tried to make it 'EESG' where 'E' stood for Employees?” Others wanted to ban “ESG compliant” (especially “ESG-compliant” companies), “ESG integration”, “ESG themes” and “ESG factors”. One person wanted to stop ESG from being used as a noun; another wanted it banned as a verb.
“I hate the word 'pivot' – “we have pivoted our business blah blah” – drives me nuts” – Fiona Reynolds, CEO of the Principles for Responsible Investment
“I hate the term ESG in general and would love to see it replaced by another term… Unfortunately, we'll need a lot of education to get rid of it!” answered David Hickey, a Portfolio Manager and Responsible Investment Lead at Lothian Pension Fund in Scotland. “Also, if I see another seed growing from soil in someone's hands, things are liable to get ugly.”
He wasn’t the only one to broaden our survey beyond words – many, many of you nominated the verdant lightbulbs, stacks of coins and cupped hands that so often accompany investor analysis and journalism about green finance.
“'These issues': Be specific, different risks and opportunities require different responses. Don't just lump them all together into one blob – it implies lazy thinking, which is the opposite of what developing a more sustainable financial system requires” – Meg Brown, Executive Director, Impax Asset Management
“Definitely exclude sustainable,” said Andrea Ranger, Shareholder Advocate at Green Century Capital Management, calling the term “completely meaningless”. Another respondent agreed, “except where it is meant literally, as in 'could be done just like this until the end of time'" – adding that, for anything else, 'more sustainable' is better. “Or coin a new word: sustainabler.”
Numerous of you share our gripe about ESG and sustainability being 'in DNA', as well as 'doing well by doing good' and anything related to being on a journey (think 'baby steps', 'incrementalism', 'evolutions'). “There is no more time for this,” said Mardi Mcbrien, the Managing Director of the Climate Standards Disclosure Board. “We need to be getting to our destination!”
“The words 'proxy voting' from every credit manager’s response on stewardship” – Nick Spencer, Gordian Advice
But the second most nominated word or phrase in the survey was none of these. After ESG, your biggest peeve was 'non-financial'. “The use of the term 'non-financial factors' to mean 'ESG factors' is a misnomer. All ESG aspects have some effect on business objectives and the bottom line,” said one respondent, with many others echoing the point. One for the European Commission to think about, perhaps, as it moves to put the Non Financial Reporting Directive at the heart of its sustainable finance agenda.
As for us, we will circulate the survey results to our Digifest speakers (although a blanket ban on the words 'sustainability', 'ESG' and 'impact' might be tricky!) and add many of your suggestions to our in-house exclusion list. And we solemnly promise never to use an image of anything sprouting plants.