MIT Sloan Management Review Article on How to Bring ESG Into the Quarterly Earnings Call

Quarterly earnings calls need an overhaul. Management expends great effort preparing for them, investor relations officers view them as crucial venues for sharing the equity story — the strategic vision that provides a rationale for investing in the company’s stock — and quarterly results still move markets. So why should these calls emphasize short-term profit-taking over long-term investments in employees, research and development, and sustainability, given that environmental, social, and governance (ESG) issues have direct, material effects on how well companies succeed in the long run?

We believe that companies must integrate ESG wholly into their business strategies rather than relegating them to a sidebar. But we also recognize that it’s challenging for corporations to include more ESG information in quarterly earnings calls for a variety of reasons.

About the Author

Brian Tomlinson is director of research for the CEO Investor Forum at Chief Executives for Corporate Purpose.

Tensie Whelan (@tensiewhelan) is a clinical professor for business and society and the director of the New York University Stern Center for Sustainable Business.

Kevin Eckerle (@kevineckerle) is the director of ESG performance and operations at Bayer Consumer Health. He was employed by the Stern Center for Sustainable Business at the time when the research described in this article was conducted.

Learn more about MIT SMR.