ESG Investing

How External Stakeholders Are Bringing Sustainability Conversations to the Table


While impact investing headlines tend to focus attention on investors and beneficiaries, a wide range of other parties have made contributions to the sustainability conversation. In fact, MSCI highlights these “stakeholders without proxy cards” as an important environmental, social, and governance (ESG) trend for 2020.

Which external stakeholders have a role in shaping the ESG and sustainable investing market? As social media builds brand awareness while encouraging direct engagement from a wider audience, student activists, corporate employees, and consumers are pushing companies to embrace sustainability.

Student Activists

Though Swedish teenager Greta Thunberg may be the most visible representative of student sustainability activism, she is hardly alone. In November 2019, students protesting climate change stormed the field at the annual Harvard-Yale football game. In February 2020, Georgetown University became the latest US campus to respond to student protests by committing to divest its endowment from fossil fuels. That decision came just in time for Fossil Fuel Divestment Day, an international day of activism at more than 50 campuses across the US, Canada, Nigeria, and Kenya.

So far, strikes and rallies have been more effective than working through the system, as students at the University of the South discovered when their Socially Conscious Investment Club proposed a divestment plan through official faculty and board channels. The lack of response from the university leadership, the students claim, indicates that their concerns are not being taken seriously.

As social media builds brand awareness while encouraging direct engagement from a wider audience, student activists, corporate employees, and consumers are pushing companies to embrace sustainability.


Corporate environmental initiatives are often top-down announcements that make broad conceptual commitments but lack specifics. That is starting to change. Last September, the global climate strike drew employee activism from tech giants like Microsoft, Facebook, Twitter, and Google. The latter led to Google’s leadership preemptively committing to investments in wind and solar energy.

In January 2020, after e-commerce giant Amazon announced that it would take steps to reduce its carbon footprint, more than 350 Amazon employees were quoted in a Medium post outlining ways the company had not gone far enough. The organizing group, Amazon Employees for Climate Justice, is demanding that the company be carbon-neutral in 10 years, end its contracts with fossil fuel companies, and stop funding politicians and lobbyists who deny climate change.


The conventional wisdom that green products are more expensive and less effective is no longer true. In fact, consumers have begun to boycott companies that do not have sustainable credentials—and “buycott” those that do. A landmark study from NYU on the purchase of consumer packaged goods from 2013 to 2018 found that 50% of growth during that period came from “sustainability-marketed products,” which also grew five times faster than those without an explicit sustainability promise. These products are taking an increasingly larger share of the market, with sales of $114 billion in 2018 alone. That growth does not guarantee that these products live up to their marketing, but as consumers become more attuned to the risks of greenwashing, their desire for sustainability could drive meaningful change.

The “buycott” has emerged as an alternative to traditional boycotts: rather than refusing to buy products that are not green or ethical, conscious consumers are instead proactively patronizing companies that support social and environmental good. After Dick’s Sporting Goods restricted sales of assault rifles in the wake of the 2018 shooting at Marjory Stoneman Douglas High School in Parkland, Florida, the store was rewarded with new business from “buycotters,” though not necessarily enough to counteract the toll of boycotters angry with the decision.

All of these external stakeholders have contributed to a shift in perception that puts pressure on investors and corporations to be more environmentally and socially responsible. Combined, they can shape investor perceptions. Many CEOs are already looking for ways to stay ahead of the curve, and those that are either resisting or relying solely on marketing are finding themselves targets. (There is currently an activist effort under way to remove an oil executive from JP Morgan’s board.) The fact that ESG investments are overperforming in the current coronavirus market downturn adds more fuel to the sustainability fire, and student activists, employees, and consumers will make sure it stays lit.


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