Competition: The Bright Side of ESG

Competition in product markets has made capitalism efficient. However, competition in product markets is limited because people care increasingly more about purpose than price. This essay investigates the nature of the market for purpose—our concern for growing personally and professionally, contributing to society, and belonging. Markets for purpose have been around since the origins of civilization. Prominent individuals and the organizations they represent have offered purpose by crafting narratives that connect fictitious and factual events to portray themselves as virtuous. People consume those narratives, which influence their decision to buy the products prominent individuals sell and supply the work prominent organizations use. Using the example of ESG (environmental, social, and governance) purpose, the paper contends that when buyers and suppliers stop questioning whether the narrative factually describes initiatives that meet their demand for purpose, a few players dominate the market for purpose and exert totalitarian control over the narrative. While totalitarian narratives bring about uniformity and conformity, civilization requires the opposite to thrive: innovation and disruption. Thus, buyers and suppliers are responsible for opposing the monopoly of narratives by discerning between factual and mystifying stories and keeping the market for purpose competitive and efficient.