July 1, 2022

Dear Friends of the Wharton Risk Management and Decision Processes Center, the Political Risk Lab, the ESG Analytics Lab, the Wharton Social Impact Initiative, and the Zicklin Center for Business Ethics:

Thank you for your engagement with the Wharton School. The philanthropic support, industry partnerships, and advice you have collectively provided has brought societally important topics – too often at the periphery of business, academic pedagogy, and practice – into the mainstream. This, combined with passionate and dedicated leadership from my colleagues who helped build this foundation, has helped Wharton make great strides in better understanding the business implications of tail risks and emerging opportunities emanating from the natural as well as political and social environments.

Outside of the Wharton School, investors, corporate leaders, and policymakers are increasingly grouping these topics under a common rubric: Environmental, Social and Governance (ESG) factors. Over $35 trillion of assets under management purports to want to incorporate ESG factors into their investment thesis. The vast majority of boards of directors, C-suite executives, and analysts believe ESG factors are not only material but among the most strategically and financially important drivers of strategy and valuation. New policy governing the disclosure and management of ESG factors is under deliberation at the Securities and Exchange Commission in the United States and has recently been implemented in the European Union. The leading consultancies and numerous asset managers have each announced major hiring programs in the ESG integration area. Yet, as each of these stakeholders highlight the importance of ESG factors, they also report struggling to measure, assess, and balance interdependent and, at times, conflicting demands across these respective domains.

Inspired by the intersection of market demand and faculty expertise, the Wharton School unified the Wharton Risk Management and Decision Processes Center, the Political Risk Lab, the ESG Analytics Lab, the Wharton Social Impact Initiative, and the Zicklin Center for Business Ethics to form the Environmental, Social and Governance (ESG) Initiative. The goal of the ESG Initiative is to harness the power of our faculty, alumni, students, and stakeholders to respond to the demands from ESG integrators with new research, training for future and current practitioners, and practical and policy insights in a manner that aligns with the evolving external environment.

I am excited to share that, as of July 1, 2022, I assumed the position of Vice Dean and Faculty Director of the ESG Initiative and will be responsible for supporting research, student programs, and industry engagement opportunities in a manner that responds to burgeoning student and stakeholder demand. The ESG Initiative will not only continue existing activities of these Centers and Labs but also scale them to support new faculty research projects, new curricular and co-curricular activities, and convenings of ESG thought and practice leaders. While the activities of the Initiative will be diverse, we will emphasize harnessing the power of business to address ESG factors. The resulting network of scholars, students, and practitioners will shape strategy, innovation, valuations, investment flows, and policy.

In so doing, we will consider whether ESG risks should be hedged, priced, or mitigated. Our financial and strategic analyses will span asset classes and sectors. We will further combine risk-based analyses with those focused on the pursuit of economic opportunity and positive social impact. We will analyze environmental and social outcomes of corporations as well as their corporate political activity on these topics. We will analyze not only the business impacts of addressing environmental issues but also the social impacts as well as the manner by which corporate governance influences economic, environmental, and social outcomes.

While I will draw heavily on my 24-year experience conducting research and teaching on political and social risk management and the materiality of ESG, this effort will very much be a collective one. I will be supported by Faculty Center and Lab Co-Directors Arthur van Benthem, Exequiel (Zeke) Hernandez, Katherine Klein, William S. Laufer, Sarah E. Light, and Mary Hunter (Mae) McDonnell as well as Managing Director Sandra (Sandi) Hunt and a dozen committed staff. Interest, support, and engagement from the rest of the Wharton faculty, affiliated scholars, students, and external stakeholders will also be critical for our success.

The launch of the ESG Initiative represents an exciting new chapter in the evolution of the Wharton School’s founding vision to “solve the social problems incident to our civilization.” I encourage you to explore our website to learn more about our work and invite you to subscribe to our mailing list to stay up to date on our latest research, insights, and opportunities. I look forward to your continued broad and deep engagement.

Best Regards,