Ethics captures the conditions in which human beings thrive and that provides the most direct link to the modern business taxonomy, ESG, shorthand for environmental, social and governance standards in corporations. These standards hone in on conditions that support human well-being and orient companies to the ways they impact and are impacted by society. The introduction of these metrics signals a renewed value on ethics, reflected in the marketplace by consumers and employees. Indeed, the courage of people serving currently in board and management roles has led them “to set goals to be realized over the long term, to serve interests beyond just those of financial investors, and to actively design the larger business system they operate within to promote ethical behavior, considering a broader set of stakeholders." (Skeet, 2016)
Environmental standards have been evolving over the last several decades through a number of global convenings and as expressed in goals from global entities, such as the 17 Sustainable Development Goals of the United Nations. Companies have moved from activities such as building environmentally friendly workplaces that are LEED certified, to setting goals for achieving zero carbon emissions. As we prepare for 2022, reporting standards, environmentally friendly investing options, and responsibly sourced supply chains are all part of the sustainability scorecards companies have begun to keep and report.
Social standards, of the three measurement sets, have received significant media attention in the four years since the #Metoo movement began and since the murder of George Floyd. Harassment free workplaces, matters of social justice, and the need to account for political polarity while also taking a corporate position on social matters is all relatively new terrain for many of today’s corporate executives.
Governance standards are articulated in current laws, but the compliance with those regulations and laws is uneven. Thus, more corporations are taking a more holistic approach, describing good governance in terms that embrace both ethical and legal aims, considering the role that culture plays in creating healthy workplace environments and the role governance plays in culture formation and leadership.
Awareness of local laws and norms is heightened in today’s marketplace, as more companies make choices about where to do their work based on alignment with corporate values. In this very critical way, ethics is shaping business decisions at all levels.
We know in research from the Markkula Center for Applied Ethics that three conditions in corporations lead to the use of ethical decision making: