ESG and shareholder value
Extract >.
For the last half a century there has often been a fairly narrow
view of what corporate purpose and, accordingly, shareholder
value has meant: maximising profits and ensuring the primacy of
equity shareholder
Much of this stems from a proposal put forward fifty years ago in
the New York Times magazine by the American economist Milton
Friedman. Friedman decried the proliferation of what he labelled
the ‘social responsibilities of business’ and stated that, in his
view, the sole purpose of business was to maximise profits for
shareholders by driving share prices higher
Friedman’s opinion was so forthright that he claimed that any
push towards business conscientiousness that took responsibility
for employment, eliminating discrimination, and avoiding
pollution was “pure unadulterated socialism.” Fifty years later
it is precisely the antithesis of this belief that is rightly being
asked of companies, not only by investors, but by consumers and
governments as well.
