By Richard Steel

Over time, public companies will be forced to take stances on environmental, social and governance issues, pressured by shareholders, public opinion, clients and customers. I believe the same will be true with pension funds and endowments. Just look at the activism around the Harvard endowment and the world’s largest sovereign wealth fund, which manages Norway’s assets and is dropping $13 billion of fossil fuel investments.

Not only companies but also consumers are embracing — even demanding — an elevated economy. Market demand is reshaping behavior at the corporate level, and once that change starts to happen, it is unlikely those changes will ever be reversed. The change is happening fast and responses are strong because ESG and purpose are inherently linked to issues of great importance. Investing for purpose means people are beginning to make economic decisions through macro lenses, rather than micro considerations. The concerns of the new investors and consumers are shaping the demand for elevated companies.

From my perspective, making a pivot to becoming an ESG-minded company is a matter of life and death for every corporation that hopes to participate and succeed under this evolving paradigm. Look at the inflows to ESG funds over the past few years. This is where the smart money is going. After all, 80% of Generation Z and 85% of millennials, the generation on track to become the richest in American history, “feel strongly that companies should help improve the environment,” according to a report by Nielsen.

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