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Adrian Wooldridge

If Companies Really Want to Do Some Good, They Should Unbundle ‘ESG’ and ‘DEI’

Businesspeople should think carefully about the new acronyms that increasingly govern their lives.

Musk and Tesla: Their E matters more than their SG.

Musk and Tesla: Their E matters more than their SG.

Photographer: Suzanne Cordeiro/AFP via Getty Images

The business world is in thrall to six letters — or, more accurately, to two groups of three letters — ESG and DEI. These stand, respectively, for “environmental, social and governance” and “diversity, equity and inclusion.” Taken together, they constitute the ruling business ideology of our age.

Both ESG and DEI have generated massive industries. Investment giants, notably BlackRock Inc., State Street Corp. and Vanguard Group Inc., claim that more than a third of their assets, or $35 trillion, are monitored through one ESG lens or other. Every Fortune 100 company and most Fortune 500 companies have adopted DEI programs. Walmart has committed $100 million to its Center for Racial Equity. Many human resource departments are evangelists for DEI in part because it turns an unglamorous activity (paying salaries and the rest) into a crusade for social justice.