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Has ESG been cancelled?

In today’s ever-shifting landscape, what started as a specific term coined by the World Economic Forum to help organizations create plans for a sustainable future, has become an impotent catch-all term that means nothing.

Or, as the WEF recently stated, a term that “stands for everything, and therefore, nothing.”

Organizations around the world are dropping ESG titles from their rosters and annual reports. The question is: are they also dropping these initiatives from their agendas?

Geopolitical strategist and keynote speaker Jacob Shapiro says that several of his clients have become disillusioned with ESG labels for the aforementioned reasons.

According to him, organizations are grappling with defining and expressing what impact means to them and are turning to experts like himself to craft tailored strategies that highlight tangible social impact opportunities.

Finding the Right Words

April Rinne, an expert in Change and the Future of Work, points out the distinction between ESG being “cancelled” and becoming so diluted that it loses its essence. Both scenarios may be occurring, but the dynamics and repercussions differ.

April wonders if, akin to when the “sharing” economy seamlessly integrated into the economy at large, ESG will eventually become synonymous with organizations’ best practices and governance standards.

Ultimately, April remains optimistic about the numerous individuals, organizations, and initiatives working towards a sustainable future, whether or not they use the term “ESG.”

Futurist Erica Orange agrees. “Words DO matter; language matters – it’s why over the years we’ve coined so many terms because [our] current vocabulary doesn’t do the future justice and we need the words to help convey all of the nuance; all of the complexity [of this topic].”

Unfortunately, she sees “a lot of band-aid solutions and not a lot of long-term strategic thinking being applied internally” adding fuel to the fire of criticism that organizations are merely paying lip service to ESG concepts without ever giving them their full attention.

The Tragedy of the Horizon

Recently, Innovation & Disruptive Leadership Speaker, Terence Mauri spoke with Mark Carney, the former governor of the Bank of England, to discuss the ‘Tragedy of the Horizon,’ an institutional blind spot that forces us to prioritize short-term horizons over long ones.

He says, “ESG has become a victim of the ‘tragedy of the horizon’ powered by a political backlash and partisan attacks on so-called ‘woke capitalism.’ The story of ESG is still being written, but I hope business leaders redouble their commitment to initiatives. Unlearning [our current ways] might be one of the most crucial leadership imperatives of the decade!”

Pulling it all Apart… To Put it Back Together

Like her Sweeney Agency keynote speaker colleagues, Futurist Nikki Greenberg pulls apart the concepts often found with ESG policies when she speaks to her audiences, not the umbrella term given to them. She talks about ‘energy savings’, ‘diverse workforce’ ‘risk mitigation’ etc…. the elements certainly matter but the term ESG has become politicized.

Ultimately, people are demanding more, says Angela Oguntala, Global Authority on Foresight and Innovation.

“Talking about “ESG” through sterile 3 letters might be changing but being held accountable to and innovating for better outcomes for the environment, society, and ethnical standards is not. All we have to do is flip through any report on trust at work or in society (eg Edelman) to see that people are demanding more business engagement on these issues to restore the fracturing trust we see.”

What’s Next?

While the term ESG is out of fashion, the jury is out on whether or not it is just the term, or the whole concept. Perhaps the shift from a one-size-fits-all approach to one that breaks down the elements of what truly matters will make it more appealing, and thus more actionable? Only time will tell…

… and until then, we can rely on experts like these to help guide our way forward.

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