On January 25, 2017 Geoffrey Mazullo, Principal, Emerging Markets ESG, delivered a lecture at the Stockholm School of Economics in Riga entitled, “From Corporate Governance to ESG: Policy, Products and Performance.”
In his presentation, Mr. Mazullo charts the evolution of the integration of extra-financial indicators into the investment process from corporate governance – predominately a shareholder-focused perspective – to environmental, social and governance (ESG) issues – which address stakeholder relations. Whereas initially corporate governance analyzed “governance of governance” – relations among shareholders, the board and management and related issues, such as executive compensation and ownership dilution – ESG addresses these as well as the environmental and social risks that influence a corporation’s financial performance and the corporation’s impact on shareholders and a range of stakeholders. For example, initially corporate governance did not concern itself in-depth with supply chain management. Conversely, today supply chain considerations are an integral part of ESG analysis.
The presentation outlines corporate governance policy, products and performance during the past 25 years and compares/contrasts these with ESG policy, products and performance during the past decade to 15 years.