Since the beginning of 2024, I’ve attended three separate sustainability conferences. The attendees and covered topics were different, but there are several commonalities. One of these is what I will call “common complaints” about ESG/sustainability. The complaints – perhaps I should call them “observations” to reduce the pessimism – came from ESG professionals (in-house and external) and staff/management in “the business” who aren’t directly in company ESG functions. What do you think the three most common observations are?
Here is my list based on what I heard at the conferences:
- Jargon. ESG and sustainability have an overwhelming insular lexicon of acronyms, abbreviations and terminology that many practitioners wield without shame or sensitivity to others. Spoiler alert – that only creates barriers between business functions and people. See Part 1 of my blog series on simplifying ESG.
- The business case/value of ESG/sustainability. A few companies consider sustainability to be simply a standard part of the business – no different from inventory management or accounting. In these rare instances, the value is implicit and not questioned. However, most companies aren’t there yet, and the ESG/sustainability function must compete with other departments for funding, executive attention and building internal relationships. In these cases, it can be critical to demonstrate the business value or ROI of the programs. That can be difficult for staff/managers without a business background, and it isn’t unusual for them to develop unrealistic values (take a look at the blogs here and here). I touched on these issues last week at the PracticalESG.com Roundtable held as part of the Reuters Responsible Business USA 2024 conference.
- It isn’t really a compliance mandate yet. Sure, the EU and California have laws on the books and the SEC has adopted its climate disclosure rule, but some of those mandates are in legal limbo and others (such as the EU CSRD) haven’t yet become real to many companies yet. There isn’t universal awareness of the level of effort needed to implement practices, gather data, get agreement on metrics and goals and develop disclosure controls. So to some, ESG/sustainability functions are in a state of suspended animation until compliance realities come home to roost.
Keep in mind I’m not saying I agree with these – I’m only a messenger. What do you think? Are there other complaints – I mean observations – you hear about ESG/sustainability? Let me know.
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