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I recently had a short conversation with someone about the difference between ESG and sustainability. To be transparent before I get into it here, I ended my relationship with the word “sustainability” a few years ago (after all, I wrote a book titled Killing Sustainability which was about changing the language and perception of the subject matter). So, I am admittedly biased.

“Sustainability” in my opinion is an outdated word that comes with more than two decades of baggage. That baggage is the negative perception from senior management based on how sustainability was presented by many (maybe even most) practitioners from the 1990s – 2010s. I myself was guilty of that during the time. I won’t go into details about my experiences and conclusions (that is what the book is about), but suffice it to say that senior managers developed a sensitive BS meter for sustainability due to a continuous flow of garbage economics and disconnected cause and effect arguments that were de rigueur during the period. The more we sustainability professionals tried to impress executives with false business valuations of sustainability, the more executives recognized that and simply turned off at the mere mention of the word. In many companies, corner offices still recoil when hearing it.

“ESG” is said to have been coined in 2004 by Paul Clements-Hunt, but it didn’t enter the US Buzzword Bingo lexicon until 2015 or thereabouts when the financial world picked it up. I don’t think much discussion is needed given the popularity of the term and concept at the moment which, if you are reading this, you know.

In reality, there are differences between “sustainability” and “ESG” terminology.

  • The fact that “ESG” is now part of investor vocabulary is one key difference from “sustainability.” This means it has management’s attention.
  • At least for now, “ESG” does not have the same executive perception problem that “sustainability” has, mainly because of ESG’s investor focus, combined with much improved pragmatic business linkages over historical garbage economics of “sustainability.”
  • “Sustainability” is generally associated with “E” and “S”, but less so the “G.”
  • Companies still publish “sustainability” reports, and even “corporate social responsibility” reports to use another old phrase.

These are only a few differences – but are they meaningful differences? I argue they are not and we are better served by adopting terminology that captures executive and investor attention. For years, we as sustainability professionals fought with executives to change their minds about the value of the concept. We pushed management to discard their old views that created obstacles to moving forward. Now that time is here but by referring to the concepts as “sustainability,” we hang on to its problematic past.

Ironically, now it is sustainability practitioners who may need to change our minds and adapt.

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The Editor

Lawrence Heim has been practicing in the field of ESG management for more than 35 years. He began his career as a legal assistant in the Environmental Practice of Vinson & Elkins working for a partner who is nationally recognized and an adjunct professor of environmental law at the University of Texas Law School. He moved into technical environmental consulting at the height of regulatory development, working across a range of disciplines. He was one of the firm’s leading environmental compliance and management… View Profile