How stakeholder capitalism builds the currency of trust

Companies pursuing ESG goals increasingly face a backlash from shareholders who fear a drop in financial performance. Changes to corporate governance may be needed to restore trust on both sides of the social and political divide, argues Jordi Gual

In 2019, Emmanuel Faber, then Chair and CEO of Danone, was considered a trusted leader for turning Danone into an “enterprise à mission” – a new corporate structure in France, similar to a B-Corp in the US – which allowed companies to include in their legal charter nonfinancial goals, like social and environmental impacts. Under his leadership, Danone divested unhealthy food products, increased the use of recycled packaging, pledged to achieve net zero, and launched a regenerative agriculture program. Despite these ambitions, by 2021, Faber had lost the trust of his shareholders, who argued that his social and environmental agenda was creating a drag on Danone’s financial performance, making the company less competitive. His well-publicized ouster highlights the difficulties of running a company: how to balance social, environmental, and financial…

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I by IMD (Digital) - 1 Issue, 17. March 2025

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