University of Minnesota - UMN Executive Leadership Insights
Purpose + Profit
Book

Purpose + Profit

How Business Can Lift Up the World

George Serafeim
HarperCollins Leadership, 2022
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Editorial Rating

9

Qualities

  • Concrete Examples
  • Engaging
  • Inspiring

Recommendation

Corporate leaders in the mid-1900s thought mandatory financial reporting was “impossible.” Now, those who resist reporting corporate environmental, social, and governance (ESG) data take the same stance, but Harvard professor George Serafeim offers research and examples showing that pursuing ESG goals increases a company’s market share. And reports indicate that as of 2019, about 90% of companies reported ESG data. Serafeim provides steps companies and leaders can take to be more accountable. He also points out that advanced technology and new metrics simplify the process of collecting and reporting valid information. With customers and employees increasingly focused on corporate behavior, companies that achieve meaningful ESG goals can benefit financially while being socially responsible.

Summary

Businesses and their stakeholders realize the significance of environmental, social and governance (ESG) issues.

In 2011, many finance professionals believed that environmental, social, and governance (ESG) issues had scant relevance. Author and professor George Serafeim researched this issue at Harvard University and created metrics showing that companies with improved ESG performance earn 3% more in annual stock returns. 

As technology evolves to support better data and metrics collection, stakeholders expect more from companies. Businesses also seek to increase their revenue and profits by performing well on ESG issues. For example, Microsoft’s CEO Satya Nadella reinvigorated his company by putting his belief in business’s social contract into action.

Corporate success requires ESG participation.

Companies are changing how they view themselves in light of ESG issues. One of Serafeim’s former students started Harlem Capital Partners to invest in minority and women-owned businesses. Another created Mogul, an educational platform for women.

The Business Roundtable’s 181 top CEOs published a ...

About the Author

George Serafeim is the Charles M. Williams Professor of Business Administration at Harvard Business School. He has presented his research in more than 60 countries. He serves on the board of directors of Liberty Mutual and AEA-Bridges Impact Corporation and co-founded the advisory services firm KKS Advisors and the technology firm Richmond Global Sciences. 

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