Language Matters: Pioneering an Informed and Responsible ESG Vocabulary
In the last 18 months, there has been an alarming increase in misuse of the term “woke” to characterize environmental, social, and governance (ESG) activities. As an African American woman who works in the financial field, I am particularly concerned about its use as a negative and inaccurate descriptor — a point I’ll expand upon further in this article. Language matters, and a more intentional use of words is needed in the evolving field of ESG. The combined term “woke ESG” has become the target of an anti-woke campaign that misconstrues the true meaning of both ESG and woke. Such use inaccurately frames the core intentions and significantly misrepresents the narrative surrounding the ESG practice.
Defining a Nascent and Evolving Concept
The practice of ESG is still in its early stages and evolving daily, making defining the field open to confusion and contrasting opinion. While the audience for ESG information includes a multitude of stakeholders, it is most commonly used by investors as one input to their investment decision-making and capital allocation processes. The Sustainability Accounting Standards Board (SASB), a leading ESG standards-setting body, lays out criteria for reporting ESG information. As SASB says: “Disclosure standards and frameworks are the foundation of this ecosystem. They facilitate the disclosure of comparable, consistent and reliable sustainability-related information. Using this information, data providers and rating agencies can build tools, analytics and resources for the capital markets.”
The SASB use case focuses on information. It is not — as has become the rallying point of the anti-ESG campaign — the use of capitalism to advance a progressive social agenda. Instead, ESG is another lens through which to evaluate risk and opportunity in investment decision-making — one that complements the traditional focus on monetary factors.
One way to protect ESG from being misunderstood, or worse, misrepresented, is to courageously confront the misapplication of “woke” as a descriptor or component of ESG.
The History and Misapplication of ‘Woke’
Woke gained traction in the 1940s, pioneered by African American activists to encourage the Black community not to become complacent to the mistreatment and racial injustice of the African American experience. It is a statement against a white supremacist worldview that seeks to erase the African American identity and foster a system that “deems the negro a non-entity,” as Carter Godwin Woodson wrote in the 1933 book The Mis-Education of the Negro. The term spurs the African American community to action, not just to learn its history, but also to unlearn the societal narrative that devalues Blackness in America.
Using woke, an otherwise empowering term as explained above, in conjunction with ESG misappropriates and misapplies the term to something it was never intended to describe. Both pro-ESG and anti-ESG proponents are guilty of this. For example, pro-ESG advocates have co-opted woke as a descriptor of investments that further a politically correct and progressive world view. Similarly, anti-ESG proponents have coined the term “woke investing” to evoke and intend a negative connotation that means a misuse of corporate and regulatory influence to push radical social ideas to the detriment of financial performance.
The Risk
Like the misappropriation of woke, ESG is at risk of experiencing a similar fate. Instead of being understood as a risk assessment term, ESG has been disparagingly characterized as a trendy buzzword or “the flavor of the month.” But when we focus on the fundamentals of ESG as intended, strong ESG performance has been correlated positively with higher equity returns and reduction in downside risks that assist in determining a company’s financial performance.
The issue is not merely one of semantics, because these practices have real implications. A number of states have enacted laws or adopted policies that seek to prohibit public entities from considering ESG factors when investing state resources.
Until ESG and woke are uncoupled, it is imperative to foster awareness of the false equivalencies of the terms. ESG and woke have nothing to do with one another because ESG has little to do with Blackness and the experience that Black people have in this country. ESG is a global practice, while the origins of the term woke are uniquely American, as it is intertwined with our country’s construction of race.
If this practice continues, the goals of ESG will remain vulnerable to being misunderstood and inaccurately defined. Although this practice puts ESG goals at risk, it is more important to avoid — either inadvertently or intentionally — misappropriating a word of empowerment of a disenfranchised community.
What Now?
To combat the association of woke and anti-wokeness rhetoric with ESG, I encourage those participating in the conversation to cease repurposing the word woke. Not only does the use of the word contribute to the erasure and disempowerment of an ethnic group, it is blatantly inaccurate when applied to ESG. We currently have the advantage of the ESG industry being in its infancy, which presents the unique opportunity to be pioneers in creating and shaping the vocabulary that we use to discuss it. Repurposing words like woke exposes a landmine of issues that we are unprepared to tackle. Proactively establishing a new, more intentional vocabulary requires us to be inclusive, aware, and to demonstrate mastery of our field, all key characteristics of effective business leadership.
Eryn Banton is an Assistant Account Executive in the Edelman Smithfield ESG Advisory team. B The Change gathers and shares the voices from within the movement of people using business as a force for good and the community of Certified B Corporations. The opinions expressed do not necessarily reflect those of the nonprofit B Lab.
