While media headlines may suggest that ESG is dead, the reality on the ground tells a more nuanced story. Insights from a recent discussion with a financier highlight a period of retrenchment — not rejection — of ESG, both at corporations mostly impacted and particularly in the financial market arena. 

Starting in North America, and now observing similar trends across Europe, some institutions have publicly distanced themselves from previously stated ESG / Sustainability targets, but behind the scenes, many companies remain committed through energy efficiency and sustainability initiatives. The challenge lies not in intent, but in execution.

When ESG frameworks were codified into regulation, the data demands, internal reporting necessities, strategic decisions etc. quickly outpaced the infrastructure. Reliable and comparable ESG data remains patchy, and firms have had to incur significant cost and time to create the necessary infrastructure (staff, data collection, reporting) in order to scale up the need for compliance. 

• Legal ESG: London is back for its third year, a two day event where legal professionals confront ESG challenges head-on.

Capital raising linked to ESG has also taken a hit. As investor appetite shifts and political winds turn — especially in the US — many banks have re-evaluated their positions.

Some North American banks have exited the Net Zero Banking Alliance, citing political and regulatory pressures. Others across the globe  have followed suit.