Chief executive officers bear significant non-diversifiable personal risks from environmental, social, and corporate governance (ESG) setbacks, potentially jeopardizing their job security and future career trajectories. Consequently, these risk-averse CEOs may embrace ESG, not only in response to shareholder pressure, but also defensively as a means of self-protection. This CEO-centric ESG agency dilemma is pivotal in shaping the trajectory of ESG and in devising policies to calibrate CEO incentives.

Michal Barzuza, Quinn Curtis & David Webber, CEOs Have Real Incentives To Promote ESG, ProMarket (October 26, 2023).