Environmental, social and corporate governance is a comprehensive package, said Dwight N. Hopkins, all three must go together.
Dwight N. Hopkins. Photo by Yue Qi
By CAI Muzi
People who know Dwight N. Hopkins are often impressed by the diversity and depth of his knowledge. Hopkins is a theology professor at the University of Chicago, teaching classes on social entrepreneurship and comparative theology. He was also a visiting professor at the Renmin University of China, teaching history of western civilization.
He founded the ESG (environmental, social and corporate governance) research center at the University of Chicago in 2017, focused on the kind of environmental and social responsibility that he believes entrepreneurship should value over balance sheets.
“There is no left or right wing in my dictionary,” he said. “I care about the world, families, youngsters, and each human being as who they are.”
In his office at the University of Chicago, Hopkins sat down with Jiemian News, to discuss the post-pandemic world.
Jiemian News: What brought you first to ESG? Why is this topic so important to you, and how will it help humanity through difficult times?
Hopkins: There are plenty of reasons why the topic of ESG - environmental, social and governance - is important. In the US environmental context, everybody recognizes there's something happening with the climate, whether it's climate change or an aberration.
The United States is a society in flux. Each year, thousands of people from all over the world come to America to become citizens. People are trying the social part of ESG. They are trying to find their own identity, their own place and how to bring balance and harmony to competing interests. In the United States, we have so many communities, histories and traditions.
US democracy is an ongoing experiment to provide opportunities for all. Governance - non-governmental organizations, not-for-profit organizations and elected political officials - is about authentic leadership, transparency and speaking about the US context. That's a big challenge for us right now. ESG allows us to enter conversations at multiple levels.
Jiemian News: Tell us something about your involvement with China. How would you rate ESG action in Chinese companies and universities? What do you think they can learn from America?
Hopkins: In China, the government has taken a strong position on ESG, particularly in the private sector. From next year, the private sector has to make annual ESG reports. That’s pretty striking.
Once, the government takes a position, it set concrete goals and timelines for the private sector and then outlines what should be in those reports.
China has taken a leadership position in global climate discussions. That's a major intervention. In this case, size matters. I'm still learning about what's happening on the ground in China, but it seems to be a positive development. There seems to be something about a one-party system: When it's working for the good, it can move things along faster than in some other countries.
The private sector has a large role to play in developing a positive relationship between China and the US After the private sector, I think the youth and students can play a big part. Education must play its role. Leaders, particularly formally elected leaders, at least in the West, will often look to another country and blame “external forces.” I think it's unfortunate.
Jiemian News: The private sector should play a significant role, but we notice a lot of companies in China greenwashing today. Did American companies do that kind of greenwashing years ago?
Hopkins: We've had some instances. American companies, and some big ones, didn't really change anything, but they may have a website, so the website is green. They may give money to a climate change group, and so they'll say on their annual statement, we’ve changed our website, we recycle more paper. It’s still greenwashing because they haven't fundamentally changed.
They haven't really established ESG goals and changed their culture. ESG means changing the entire culture, policy and practice.
It's not just an add-on. It's not just setting up an ESG committee. It must come from the board, the investors, all the way down the supply chain to the customer. ESG means every stakeholder.
In the US, things move slowly. In government, it could be three years, or five years, before anything happens. Just at the state level, we have the court system, and even if the judge on the local level votes in favor of environmental policies, corporations can appeal, and then it keeps going up about five levels as far as the supreme court. It's really, really slow. But there are cities, counties, and States that have moved on.
Jiemian News: As a senior advisor at Arcis Capital, do you think the current ESG investment boom is overheating? How will new US climate legislation affect scenarios going forward?
Hopkins: That's a big question. There is a strong movement, at least in the United States on social impact investing. Corporations are publishing annual ESG reports.
For us, in our culture, in our context and in our community, the question becomes one of implementation. For example, in November there’ll be elections here. For Biden to get his bill through Congress was a major accomplishment.
What happens if the majority in Congress changes, or the governor change parties or city Council men and women change? It passed slim majority. It's not like a 90% people believe in it.
Still, the question is, how is it going to be implemented? It's not like everything has changed overnight since the bill passed. When you look at it, it speaks for itself. You would think that if the president of the United States passes or writes an executive order around climate change and the environment, it would just happen, but even the president's decision can be taken to the supreme court. When it works, it works well, but it's just that we have such a long way to go. We don't have a unified will, and the political scene is very intense.
ESG is still moving in the US, and hopefully, we'll get to a point where we can be unified in our sense of ourselves as one country and part of a world of countries. Right now, we have a lot of ways to go to get to that point. We'll see what happens when someone else is elected in 2024. I'm hoping that the students will be part of moving the pendulum towards peace and cooperation, less competition. I think also the private sector would be a way to do it as well.
Jiemian News: The last question. What do you think is the most important ESG issue today and how should we deal with it in the post-epidemic era?
Hopkins: For me, ESG is a comprehensive package.
I think the E is pretty clear in terms of the environment. But on the social level, it's people-to-people, culture, and student exchange. We have to make sure the water can flow between countries. And that depends on better governance. Leadership has to be clear. All three go together.