#183 – Integrity Idea 028: Embrace “Biblical ESG”

ESSENCE:  Integrity Ideas are specific actions a faithful leader can consider in leading faithfully through business a better way.

INTEGRITY IDEA: Embrace “Biblical ESG”

COVERT-OVERT CONTINUUM (six Continuums for action):  Proclamation and Practices

COVERT-OVERT RATING (several levels from Highly Covert to Highly Overt):  Overt

STAKEHOLDERS SERVED: Employees, Customers/Clients, Owners, Suppliers/Vendors, Community, Kingdom

Most Integrity Ideas are practical actions toward implementing a bigger WHY for the organization.  “Embrace Biblical ESG” is about cultivating an organizational culture that understands, implements and reflects how an organization seeking to align with Biblical beliefs, principles and policies needs to re-imagine its vision around “environmental, social and governance” matters.  It recognizes the importance to business a better way of pursuing the flourishing of creation, particularly people (rather than Profit as Purpose), as the “end” to which the organization is managed, which means embedding Biblical concepts of respect and sustainability into the organization’s culture.  For a faithful leader seeking to lead with faithful integrity, “Embrace Biblical ESG” requires an understanding of the leader’s role as a steward of an organization owned by God, including its purpose, values, culture, people, products, policies, practices, and use of all forms of capital.   In a broken world dominated by business as usual that can be motivated by political and ideological pressures and prejudices, “Embrace Biblical ESG” is an opportunity to demonstrate how the concepts embedded in the phrase “environmental, social and governance” have aligned with Biblical beliefs, principles and priorities long before the term “ESG” was coined.

Integrity Ideas are specific actions a leader can consider during the Re-Align step of Integriosity®–actions that will begin to Re-Align the organization with Biblical beliefs, principles and priorities.  You can find more Integrity Ideas at Integrous | Integrity Ideas (integriosity.com)

Integrity Ideas are practical actions toward implementing a bigger WHY for the organization.  We believe some are critical (and necessary) steps in the RENEW/RE-ALIGN/RE-IMAGINE/RESTORE process.  Others are just ideas to be considered if they feel like a good fit based on what leaders prayerfully discern is best for stewarding the organization toward its WHY.

“Embrace Biblical ESG” falls into the “if it fits” category.  While leading a business with faithful integrity through business a better way requires cultivating a culture that reflects a re-imagined vision around “environmental, social and governance” matters, “Embracing Biblical ESG” contemplates a more overt proclamation of how the organization is specifically embracing a Biblical understanding of those terms.

In our last post (Embrace “Biblical DEI”) we explored how the concepts embedded in the phrase “diversity, equity and inclusion” have aligned with Biblical beliefs, principles and priorities long before the term “DEI” was coined.  Not surprisingly, this post will sound similar in many respects.  But it is different, so please don’t stop here.  For those who profess Biblical faith in an increasingly secular society, this is important.

But this post is NOT about the differences between ESG investing, values-based investing, “BRI” (Biblically responsible investing), and faith-based investing or about the different approaches to those models.  It is also not about ESG rating systems used to signal to investors whether an organization fits the world’s current concept of “ESG”.  It is about why leading an organization with faithful integrity through business a better way necessarily brings with it a re-imagined vision around the words in “ESG”.  Those words are not something to be “against”–“Embrace Biblical ESG” is an opportunity to proclaim the intrinsic wisdom of Biblical ideas and faith in the God of the Bible.

INTEGRITY IDEA: Embrace “Biblical ESG”

“Embrace Biblical ESG” is about cultivating an organizational culture that understands, implements and reflects how an organization seeking to align with Biblical beliefs, principles and policies needs to re-imagine its vision around “environmental, social and governance” matters.

It recognizes the importance to business a better way of pursuing the flourishing of creation, particularly people (rather than Profit as Purpose), as the “end” to which the organization is managed, which means embedding Biblical concepts of respect and sustainability into the organization’s culture.

For a faithful leader seeking to lead with faithful integrity, “Embrace Biblical ESG” requires an understanding of the leader’s role as a steward of an organization owned by God, including its purpose, values, culture, people, products, policies, practices, and use of all forms of capital.

In a broken world dominated by business as usual that can be motivated by political and ideological pressures and prejudices, “Embrace Biblical ESG” is an opportunity to demonstrate how the concepts embedded in the phrase “environmental, social and governance” have aligned with Biblical beliefs, principles and priorities long before the term “ESG” was coined.

“Embrace Biblical ESG” embodies the Creation Mandate found in Genesis 1:28.

And God blessed them. And God said to them, “Be fruitful and multiply and fill the earth and subdue it, and have dominion over the fish of the sea and over the birds of the heavens and over every living thing that moves on the earth.

Faithful leaders leading with faithful integrity through business a better way know that they are “stewards” of the organization they lead and the creation it touches, and that requires a Biblically-based Kingdom vision around ESG matters.

Unfortunately, the worldly concept of “ESG” is often resisted by those who identify as politically or ideologically “conservative”, many of whom have a strong Biblical faith.  That can unfairly be twisted into an accusation that people of Biblical faith are opposed to caring for the environment, caring for people and implementing good governance when, in reality, they are merely resisting the current cultural definitions given to those terms by the kingdom of the world–definitions devoid of God or any transcendent anchor.

Labelling those of Biblical faith as being “against” is a tactic.  But it is a tactic that works, and many people of Biblical faith have provided more than sufficient ammunition to those intent on tarnishing “faith”, particularly Biblical faith.  For example, Inspire Investing, a leader in BRI, made headlines in 2022 for loudly “renouncing ESG”.  They didn’t actually renounce caring about the three concepts, but it sure sounds negative.  Against caring for the environment?  People of Biblical faith should be leading the charge.  Against caring for people?  People of Biblical faith should be leading the charge.  Against good governance?  People of Biblical faith should be leading the charge.

In a broken world dominated by business as usual that can be motivated by political and ideological pressures and prejudices, “Embrace Biblical ESG” is an opportunity for faithful leaders to demonstrate how the concepts embedded in the words “environmental, social and governance” have aligned with Biblical beliefs, principles and priorities long before the term “ESG” was coined.

Biblical Basis for “Embrace Biblical ESG”.

Worldly ESG suffers from a tension that does not exist with Biblical ESG.  The tension in worldly ESG is between the goals of ESG and the WHY of the business–Profit as Purpose.

The WHY of business in the kingdom of the world is maximizing profit.  Matthew 6:24 makes clear “No one can serve two masters, for either he will hate the one and love the other, or he will be devoted to the one and despise the other.”  An organization can’t serve ESG and Profit as Purpose except to the extent it can rationalize that ESG is good for long-term profit.  Unfortunately, analysts, investors and markets are more focused on short-term profit.  In the short-term, ESG can increase expense, which hurts profit.

What about a business that says “We have several purposes, and profit is just one“?  At the end of the day, there can only be one primary WHY for the organization that will win out–other “purposes” get reduced to being “means” or “strategies”.  Perhaps that is why ESG investing initiatives have come under scrutiny and been subject to much criticism.  For example:

The New York Times recently published an article titled “The Pushback on E.S.G. Investing noting that “There is a profit motive to E.S.G. . . .  If shoppers and investors are looking for environmentally positive offerings, then it makes sense for businesses to respond“.

A recent Bloomberg article talked about a top executive admitting “His firm’s low-carbon portfolios didn’t address global warming in a robust way. They were instead created simply because of client demand.”

Harvard Business Review published an article in 2021 titled “An ESG Reckoning is Coming”.  It noted “According to research last year, investors who signed onto the United Nations [Principles for Responsible Investment] did not improve the social and environmental performance of their investments. According to the researchers, signatories ‘use the PRI status to attract capital without making notable changes to ESG’.

Worldly ESG is not tied to a transcendent truth–a transcendent WHY.  Without a transcendent WHY driving an approach, its WHAT and HOW can be misdirected or become unsustainable.  Its goals and parameters are whatever people with power or influence say they are at any moment in time.

By comparison, Biblical ESG aligns with the transcendent purpose of business a better way–maximizing the flourishing of creation, particular people, by Humanizing People, Beautifying the World and, in the process, Glorifying God.  It is anchored to a rock.

Biblical Environmental and Social.   Without a proper understanding of context, words like “subdue” and “dominion” in the Creation Mandate regarding the earth and every living thing are ominous and, on their face, could be misunderstood to justify unfettered use and even abuse of natural resources and even people.  But theologians (which we do not claim to be) seem to be pretty confident that the terms means “stewardship“.  We are to care for all God’s creation, particularly people, as its STEWARDS.  It is worth repeating the words of Tim Keller from his book Every Good Endeavor:

We are called to stand in for God here in the world, exercising stewardship over the rest of creation in his place as his vice-regents. We share in doing the things that God has done in creation—bringing order out of chaos, creatively building a civilization out of the material of physical and human nature, caring for all that God has made. This is a major part of what we were created to be.

We believe “caring for all that God has made” translates practically into two things–Respect and Sustainability:

• RESPECT:  Respect for all humans God created, which means treating all stakeholders of an organization with dignity (owners, employees, vendors, customers, communities).

• SUSTAINABILITY:  Sustainability across all aspects of a business, including its utilization of all forms of capital that drive the business and its relationships with the stakeholders related to those forms of capital.  We have frequently turned to Jeff van Duzer’s book Why Business Matters to God (And What Still Needs To Be Fixed), and its insights on the breadth of sustainability are worth quoting:  “Sustainability, however, can be understood in a much broader sense as well. As a business pursues its purposes, it must do so in a way that is sustainable across all of the dimensions of its interactions with its stakeholders.

In considering the broad concept of sustainability embedded in the Creation Mandate, it is useful to look at the different forms of capital on which a business depends.  As we first mentioned in post #014, in their book Completing Capitalism, Bruno Roche and Jay Jakub identify four key types of “capital” needed by a business: natural, human, social and financial (the thesis of the book is that the problem with “capitalism” is that business has focused on just one “capital” and failed to steward and manage appropriately the other three–for “capitalism” to work, it must be “completed”).

What does sustainability look like across all forms of capital and taking into account all stakeholders?   Interestingly, in Completing Capitalism the authors describe how the Mars Corporation (their employer) did a study to ensure that Mars was not extracting an unfair amount of profit any stage of the value chain, thereby weakening the chain.  Mars undertook this study because its leaders recognized that a weak value chain is not resilient (i.e., sustainable).  This resulted in the development of an entirely new business model–the Economics of Mutuality (a very Biblical principle!).

It is important to understand that Biblical ESG is about obedience to the Creation Mandate–recognizing that God owns it all, has given it to us to steward and is ultimately in control.  Biblical ESG is NOT:

• Motivated by fear of “existential” climate or environmental threats.

• Motivated by political agendas or narratives.

• Motivated by cultural pressures or movements.

• Motivated by regulatory requirements.

Biblical ESG flows from the “first thing” of Love.  As explained in earlier posts, it is the generosity and service aspects of Love that lead us to the purpose of work and business (maximize flourishing by Humanizing, Beautifying, Glorifying).  Biblical ESG flows from the respect and sustainability aspects of LoveLove through recognizing God’s limitations inherent in the Creation Mandate.

Biblical Governance. Once a leader truly acknowledges that God owns the organization and that they have been entrusted with its care and growth on God’s behalf, the organization and the leader have taken on sacred identities.  A recent McKinsey article notes, from identity flows governance (emphasis added).

What’s needed is relatively clear: it’s deep reflection on your corporate identity—what you really stand for—which may well lead to material changes in your strategy and even your governance.

Stewardship of an organization requires decisions, decisions are driven by the governance vision, model and practices of the organization that are embedded in its culture.  Because culture flows from purpose and values, and governance is part of the culture, ultimately governance flows from “what you really stand for” in the words of McKinsey.

The governance structure of an organization can facilitate, impede or completely block business a better way.  Leading an organization with faithful integrity requires understanding the dynamics of the existing structure and then re-imagining a governance structure that is conducive to business a better way–one that is in alignment with, and supportive of, the re-imagined purpose and values of the organization.  It requires a structure that is n alignment with, and supportive of, maximizing the flourishing of all creation touched by the organization.

As we described in greater detail in post #083 (Culture and Governance), here are some of the elements of governance to be considered in re-imagining culture, including how they can impact leading with faithful integrity:

• God. Whether a leader envisions God as the “real” CEO or as the “real” 100% owner, it is important to embrace that the leader is ultimately answering to God for how the organization carries out the Creation Mandate.  Keeping God in the proper governance perspective (AT THE TOP) will also help the leader model Humility, which we have seen in prior posts–#060 (Humility-The Key to HOW), #061 (Humility-A HOW of Righteousness), #062 (Humility-A HOW of Loving Others), #063 (Humility-A HOW of Pursuing the Kingdom) and #064 (Humility-A Key to Wisdom)–is critical to leading with faithful integrity.

• Ownership. Even if a leader acknowledges that God is the ultimate spiritual owner of the organization, the organization will have temporal “owners” with legal rights under the world’s system of governance.  It can be extremely difficult for a leader to lead with faithful integrity through business a better way if the owners of the organization prioritize Profit as Purpose and only understand business as usual.

• Leadership. One clear Biblical priority is receiving wise counsel:  “Without counsel plans fail, but with advisors they succeed.” (Proverbs 15:22)   A leader re-imagining culture should consider those in the organization they rely upon for counsel (including Board members and other internal leaders) to ensure that they are receiving “wisdom” and “direction” from people who understand and support aligning the purpose, values and culture of the organization with Biblical beliefs, values and priorities.

• Internal Structures, Policies and Communication.  Internal “governance” is made up of the organization’s formal and informal reporting and accountability structures, communication lines and policies governing how people inside and outside the organization are treated.

• While some hierarchy is needed in an organization to keep it “organized”, a leader re-imagining culture needs to look at how the organization’s internal structures might be creating conditions antithetical to its Re-Imagined Purpose and Values and to prioritizing relationships, community, human dignity and flourishing of all people.

• An exercise in re-imagining purpose, values and culture may be a futile endeavor if it does not include a review of formal policies and an honest discovery and appraisal of “informal” policies to ensure that they are consistent with, and not undermining, the organization’s desire to align itself with Biblical beliefs, principles and priorities.

• A leader re-imagining culture needs to understand the communication lines within the organization to ensure that people throughout the organization feel they have a voice and that the decision-makers in the organization are able to receive all the information, including from the “front-line”, needed to make the best decisions.

The “G” in “Embrace Biblical ESG” means seeking internal governance Integrity–re-imagining and re-aligning those governance elements in a way that supports and is integrous with the organization’s re-imagined WHY.

CONTINUUM: Proclamation and Practices

The Integriosity model organizes “heart change” along six Covert-Overt Continuums.  There is nothing magic about these categories, but we believe they are helpful in thinking about practical execution of a Re-Imagined Purpose, Re-Imagined Values and a Re-Imagined Culture.  The Continuums are Prayer, Proclamation, Policies, Practices, Products, People.

Each Continuum represents an area in which leaders can begin to think about, plan and institute Re-Alignment changes to the heart of the organization.

Like “Embrace Biblical DEI”, “Embrace Biblical ESG” is on both the Proclamation and Practice Continuums.  Proclamation involves actions that share Biblical faith messages with those who may not have a Biblical faith.  Practices reflect, and at the same time help shape and reinforce, an organization’s culture.  Purpose and values define the culture of an organization; the culture shapes the behavior of the people in the organization; and the behavior of the people drives the results of the organization.

On the Practices Continuum, “Embrace Biblical ESG” embodies Biblical beliefs, principles and priorities that an organization must seek to embed in its culture if it is committed to operating with faithful integrity through business a better way.  “Embrace Biblical ESG” is on the Proclamation Continuum because it contemplates openly sharing that the organization is committed to a Biblically-based vision around environmental, social and governance matters, how those concepts align with Biblical values, and how “Biblical ESG” from a Kingdom perspective differs from what has become the more common worldly understanding of “ESG” often embraced by business as usual organizations in response to political or ideological pressure.

COVERT-OVERT RATING: Overt

The Integriosity model breaks the Covert-Overt Continuums into six gradations–from Highly Covert to Highly Overt–that we believe are helpful in beginning to pray and think about what is most appropriate for an organization at a particular moment in time.

Most Integrity Ideas will have one place on the scale.  Some can vary depending on how they are implemented.  “Embrace Biblical ESG” is at the Overt end of the Continuum because it contemplates an element aspect of Proclamation.  Whether it is Overt (An overtly faith-based action known generally within the organization), Very Overt (an overtly faith-based action involving suppliers, vendors or customers) or Highly Overt (“an overtly faith-based action involving community, website, sales/marketing materials) depends upon how widely it is explained.

STAKEHOLDERS SERVED: Employees, Customers/Clients, Owners, Suppliers/Vendors, Community, Kingdom

When we categorize faith-based actions, we also consider the stakeholders principally impacted by the action: Employees, Customers/Clients, Owners, Suppliers/Vendors, Community and Kingdom.

“Embrace Biblical ESG” has an even broader impact than “Embrace Biblical DEI”.  It serves employees, customers/clients, owners, suppliers/vendors and the community whether or not it is proclaimed and explained overtly.  They benefit from being touched by an organization with a WHY of maximizing the flourishing of all the creation it touches, particularly people.  “Embrace Biblical ESG’ serves the Kingdom to the extent the organization proclaims what it is doing, why it is doing it, and how what it is doing is different in action, implementation and motivation from more common worldly ESG initiatives.

We are called to stand in for God here in the world, exercising stewardship over the rest of creation in his place . . . caring for all that God has made. (Tim Keller)

IMPLEMENTATION

Every faithful leader seeking to lead with faithful integrity through business a better way should be praying and thinking about how to implement the Practice aspect of Biblical ESG.  In that context, a Biblically-aligned approach to environmental, social and governance matters is simply part of cultivating an organizational culture that Humanizes People, Beautifies the World and Glorifies God.  As James Hunter observes in his book To Change the World:

To manage a business in a way that grows out of a Biblical view of relationships, community and human dignity before God has divine significance irrespective of what else might be done from this platform.

The Bible is full of assurances about doing the “right thing”.  For example:

So whoever knows the right thing to do and fails to do it, for him it is sin. (James 4:17)

We do believe that God has implanted every human with what Tim Keller calls “first-order beliefs” such as “honesty, justice, love, the Golden Rule“– a “universal knowledge of God and of good“.   We know deep down that “Embrace Biblical ESG” is the “right thing” to do, and in the words of Dr. Martin Luther King, Jr.: “The time is always right to do the right thing.

The challenge for a faithful leader is the Proclamation aspect of “Embrace Biblical ESG”–explaining to owners, employees, vendors, suppliers, customers and the world, that the organization believes in the ESG of God’s Kingdom rather than the ESG of the world.  It is likely to be met with resistance.  John 16:33 says “In the world you will have tribulation.” “Embracing Biblical ESG” loudly is seeking the BIGGER Kingdom but doing it in a broken world.

Turning once again to one of our favorite James Hunter observations:

To enact a vision of human flourishing based in the qualities of life that Jesus modeled will invariably challenge the given structures of the social order. In this light, there is no true leadership without putting at risk one’s time, wealth, reputation, and position.

It is a decision that must be taken prayerfully, remembering the faithful leader’s duty to steward well the organization God has given them to lead.  Although prayer can take many different forms, depending on the discernment of the leader and the existing culture of the leadership team and the organization, the same God who calls leaders to lead with faithful integrity through business a better way will be present to guide, equip and protect those who are called.

Proclamation (and the extent of Proclamation) must come from a spirit of faithful obedience rather than a spirit of pride or ideological opposition.  If the faithful leader discerns through prayer that obedience calls for the Proclamation aspect of “Embrace Biblical ESG”, then as we have written many times, the faithful leader must trust.  The Bible should never be used to cloak a prideful gesture or political or ideological motivation.

John 16:33 assures us that we can have “peace” and that Jesus has “overcome the world“.  Leading an organization with faithful integrity through business a better way in the face of resistance requires faith, and faith requires trust in God.  Trust in God is trust in His sovereignty and promises and trust in His commands.  He is faithful.

PERSONAL NOTE (from PM):  I promised ESG was coming!    Although this post is specifically not about ESG or BRI investing, the principle of “you can’t serve two masters” is true there as well.  First, remember that ALL investing is impact investing–it is just a question of what type of impact it will have.  Back in post #109 (BIGGER Returns), I wrote about BIGGER rather than LARGER financial returns.  Faithful investing needs a BIGGER concept of return than financial return.  It needs a BIGGER that aligns with what God cares most about.  That requires the counter-cultural reversal of people and financial returns in their “business as usual” roles of a means and the end–putting financial returns in its proper place as a means rather than the PURPOSE of the investor’s business.

It would be convenient if thinking about and pursuing returns in a BIGGER way just meant coming up with other priorities in addition to financial return.  For example, “we prioritize financial return and environmental sustainability”, or “we prioritize financial return while not investing in sinful businesses”. Unfortunately, that sounds good (and is certainly better than just focusing on financial return) but is not in line with Biblical principles or reality.

While some organizations say that they invest toward “social” ends as well as financial return or profit, it is a Biblical principle that we can have only one “priority”–only one “end” is the real “end”  (“No one can serve two masters“, Matthew 6:24).  The goals and priorities described as other “ends” are likely just means to the real “end” (or “nice to haves” as long as they don’t negatively impact the real “end”), which means they will be sacrificed if they no longer serve the real “end” or if they jeopardize the real “end”.

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Photo credit: Original photo by Dave Lowe on Unsplash (photo cropped)