How Corporate America Came Around on ESG

Matt Arnold is the Global Head of ESG at J.P. Morgan Chase and has been a pivotal figurehead in integrating sustainable energy practices into large corporations. One important topic in light of the Covid-19 crisis and the recent Black Lives Matter protests is ESG – environmental, social, and corporate governance. ESG has been a discussion topic in the corporate world for a long time, but the topic has suddenly risen to an ever more important status in the past few months. On the environmental side, there is the call for corporations to move away from fossil fuel and be carbon neutral; on the social side, you have the call for diversity, equity, and inclusion (DEI), which is about promoting a more diverse workforce. Two additional noteworthy aspects related to ESG in light of the recent social turmoil are: one, the demand for more inclusive stakeholding calls to an end to the former principle of “shareholder value maximization.” And two, in terms of economic policy, the “misvaluing” of essential workers during Covid-19 exposes the naïveté of free-marketeer Capitalism underpinned by UChicago-styled economists from the 1980s. When you think of J.P. Morgan Chase, the first word that comes to mind is likely not “ESG” or “sustainable,” yet one man inside of the JPM headquarter is trying to change that: Matt Arnold. A longtime insider of the environmentalist movement, Mr. Arnold works to help pivot the powerful firm's strategy towards a more environmentally friendly and socially conscientious one. In this interview, Mr. Arnold takes Tiger and Owen to explore the new consumer drive to hold companies “accountable” to higher environmental standards by being more conscientious with their purchasing dollars. Meanwhile, a broader effort is driving companies to be more transparent about their operations and investments and devote more financial resources to ESG investing. Beyond ESG, Mr. Arnold speaks about the rise of green energy’s affordability, the “divest from fossil fuels” movement, and the international energy scene. This interview with Mr. Arnold recorded in March and was the last in-person interview we did on campus. Mr. Arnold has so many interesting stories to tell, and I hope you’ll enjoy this interview that can be an introduction to ESG, energy, geopolitics and much more that you may continue to learn more about in future podcasts as part of our energy segment.