Do we have the courage to lead?

Do we have the courage to lead when human sense and business sense face formidable opposition?

Two years ago, I shared this Harvard Business Review article and research showing the financial consequences of politically-motivated business restrictions. Reading it again over the weekend, I was struck by how the warning is even more pertinent today than it was then.

A Wharton School of Business study estimated that a Texas law prohibiting state agencies and local governments from contracting with or investing in companies that use environmental, social or governance (ESG) goals in investments, known as an anti-ESG law, would cost the state $303 - $532 million in higher interest payments on municipal bonds during the first 8 months following the laws implementation.

The Sunrise Project Inc. analysts extrapolated this to six other states — Florida, Kentucky, Louisiana, Missouri, Oklahoma and West Virginia — and estimated the same impacts would cost taxpayers a total of $708 million over the past 12 months.

As Andrew Winston noted: "The banks pushing back on anti-ESG laws are not seeking medals for philanthropy; they're doing it because it's good business. Environmental and social issues do have sizeable material impacts on companies, which means investors are legally required to consider them. The pension managers in Kentucky said that not investing with BlackRock would 'violate [their] fiduciary duty'."

Business leaders globally face unprecedented political pressure on decisions regarding DEI, LGBTQ+ rights, reproductive healthcare access and responsible investing practices. The challenges to corporate positions on these issues continue to intensify.

The evidence is clear: when politics interferes with human sense and business sense, everyone pays, especially taxpayers. The question remains: will we find the courage to lead in the face of formidable opposition?