Has ESG lost its way? Alex Edmans on rational sustainability

ESG has become one of the most polarising topics in business. Yet beneath the headlines and political debates lies a more fundamental question: how can organisations create long-term value for both shareholders and society? Host of Think Ahead, Sergei Guriev, Dean and Professor of Economics at London Business School, sits down with Alex Edmans, Professor of Finance at London Business School, to explore a more evidence-led approach to sustainability. Alex introduces the concept of rational sustainability, arguing that sustainability should be treated neither as an ideology nor as a box-ticking exercise, but as a strategic and financial discipline grounded in evidence, materiality and long-term thinking. Together, Sergei and Alex discuss why ESG has become so politically charged, the limitations of universal sustainability metrics, how leaders can navigate trade-offs, and what it takes to embed sustainability into core business decision-making. Whether you are leading a business, investing for the future or simply trying to make sense of the evolving sustainability landscape, this episode offers practical insights on how to focus on what truly creates value. Host: Sergei Guriev is Dean and Professor of Economics at London Business School. An internationally recognised economist, he is the host of London Business School’s podcast, Think Ahead. The podcast brings together thought leaders and distinguished guests to explore the ideas, trends and challenges shaping the future of business and society. LinkedIn: https://www.linkedin.com/in/sergei-guriev/ Guest: Alex Edmans is Professor of Finance at London Business School. He has authored 'Grow the Pie' (2020), 'May Contain Lies' (2024), and 'The Madness of Markets' (2026). He joins us as a leading expert on sustainable business, corporate purpose and long-term value creation. LinkedIn: https://www.linkedin.com/in/aedmans/ Learn more: • Alex Edmans' website | https://alexedmans.com/ • Alex Edmans' latest book, 'The Madness of Markets' | https://alexedmans.com/madness/ • Why ESG needs a rethink | https://www.london.edu/think/why-esg-needs-a-rethink • Could "Rational Sustainability" replace ESG? | https://www.london.edu/think/could-rational-sustainability-replace-esg • Why we should not view ESG as something niche | https://www.london.edu/think/why-we-should-not-view-esg-as-something-niche Subscribe to our channel for more conversations with world-leading academics, business leaders and policymakers exploring the forces shaping business and society. Sign up to receive a curated selection of articles, podcasts and films direct to your inbox twice a month at ⁠⁠⁠https://www.london.edu/think?entry=true#subscribeScreen Chapters: 00:00 Introduction 01:40 Why ESG has become so polarised 05:35 Introducing rational sustainability 11:45 Materiality, trade-offs and what really matters 16:30 Integrating sustainability into business strategy 22:00 What effective sustainability leadership looks like 31:30 What comes next for sustainability Follow us on social media: ⁠⁠⁠ https://www.linkedin.com/school/london-business-school/ https://www.instagram.com/londonbschool/