Chief executives have increasingly incorporated environmental, social, and governance issues into core strategies, McKinsey research shows. These CEOs are responding to increasing pressure from employees and consumers, but some also see opportunities to gain a competitive advantage and address global problems. CEOs view globalization as the key development reshaping the contract between business and society. They identify talent constraints, poor public governance, and climate change as the issues most critical for their companies to address. Competing strategic priorities and the failure of financial markets to recognize the importance of implementing a strategic approach to societal issues are among the barriers to change.