Baroness Joanne Cash has issued a stark warning, stating that ideological employee groups, ESG requirements, and staff activism are hampering British business at a time of economic stagnation.
The Heavy Financial Toll of ESG
A report from the think tank Policy Exchange highlights the immense waste within the Environmental, Social, and Governance (ESG) regime. Compliance with these frameworks and the voluntary B Corp certification is now a major financial drain.
The global market for ESG consulting and auditing has quadrupled in just six years to a staggering £1.54 billion. According to Deloitte, large UK firms are spending more than £500,000 every year solely on ESG systems and verification.
This administrative burden consumes up to a fifth of senior management's time, which is time not dedicated to innovation, hiring new staff, or serving customers. For a nation already struggling with weak productivity, this acts as a significant tax on enterprise.
Broader Consequences for Business and Society
The impact is not just financial. The push to meet ESG requirements has fuelled a rise in political activism within the workplace. Many companies report that poorly judged Diversity, Equity, and Inclusion (DEI) programmes have increased polarisation and a 'cancel culture'.
Employees feel they are 'walking on eggshells', while managers spend evenings rewriting policies to satisfy auditors. The Mayfield Report estimates that poor workplace health now costs employers approximately £85 billion per year, a figure to which this new source of stress may be contributing.
The societal cost is also becoming clear. Defence companies have been deemed unworthy of investment under some ESG rules, a concerning trend with a major land war being waged in Europe by Vladimir Putin. In one instance, a global marketing company had its B Corp certification withdrawn for doing business with Shell, raising questions about the framework's alignment with vital energy security needs for Western nations.
A Call to Refocus on Growth and Skills
Baroness Cash argues for an urgent strategic change to prioritise economic growth over gestural politics. Her proposals include abolishing exclusionary staff networks and special interest groups within companies.
She suggests scrapping diversity targets and replacing them with skills training and development, ensuring that the most qualified and talented individuals are given opportunities to advance. Activism should be a weekend hobby, not a work day hijack, she writes, unless the business is itself a lobby group.
The solution is not to abandon transparency but to restore proportion. Companies should only be required to disclose information material to financial performance, risk, and genuine environmental impact, all written in clear English. Regulators should focus on accuracy, not ideology, freeing businesses to concentrate on creating wealth.
