A New Era of ESG Uncertainty and Opportunity
29th April 2025
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Table of contents
- Key themes emerging
- Reframing the value of sustainability
- Communicating sustainability
- How to maintain momentum
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Through conversations with colleagues, clients, and external networks, we’re hearing a clear and consistent message: companies are navigating a period of heightened uncertainty around sustainability. Shifting global regulations, evolving stakeholder expectations, and growing political sensitivities are creating a tension between the need to keep making progress and a growing hesitancy – both in the pace of ESG efforts and how organisations position themselves publicly.
This dynamic environment is prompting critical conversations within organisations about how to sustain momentum, reframe the business case, and adapt strategies to remain credible, resilient, and future-focused.
Key themes emerging
- Regulatory push-pull: Organisations are navigating both expansions and contractions in regulatory frameworks – such as CSRD rollbacks in the EU, evolving US regulations, and ISSB developments – creating ambiguity around compliance requirements and timelines.
- Time as a strategic asset: For those facing delays, ESG leaders are seeking ways to capitalise on the extra time to reinforce internal alignment, build capabilities, and keep sustainability positioned a value driver – not just a compliance exercise.
- Structural questions: In the absence of a clear regulatory north star, companies are re-examining how ESG is embedded internally. Should it remain centralised, or be decentralised across business units? We’re seeing experimentation and adaptation.
- Diversity, Equity, and Inclusion (DEI) is under the spotlight: Topics like DEI are under renewed scrutiny. Amid mixed regulatory signals and public debate, companies are reassessing how they engage on socially sensitive issues.
- Systemic shift or passing moment? A key question remains: is the current turbulence temporary, or indicative of a long-term shift? Seasoned sustainability professionals recognise the cyclical nature of public sentiment and are focusing on long-term value creation. Leading companies are choosing agility – building resilience into ESG strategy and governance.
Reframing the value of sustainability in a post-compliance era
As regulatory timelines shift and political landscapes evolve, companies must rearticulate the business case for sustainability – one grounded in strategic value, not just compliance.
ESG leaders are under increasing pressure from boards, investors, and private equity stakeholders to demonstrate short-term wins alongside long-term vision. This includes translating ESG into tangible business metrics: cost savings, risk reduction, capital access, employee retention, customer loyalty, and long-term growth.
Case studies and peer benchmarks are in high demand. ESG professionals are seeking examples that clearly show how others have delivered measurable impact. These proof points are critical to sustain momentum and secure internal buy-in. In a function that can often feel isolated, cross-organisational collaboration is key – not only to share technical expertise, but to exchange practical strategies for engaging internal audiences.
Walking the Line: Communicating Sustainability in a Politicised Environment
In today’s polarised climate, ESG communication requires precision. Messaging that resonates in one market may trigger backlash in another – especially evident in the differing dynamics of the US and EU.
Amid growing political scrutiny and resistance to ESG-related themes, especially in the US where DEI, climate, and perceived ‘woke’ practices are under increasing pressure to soften or scale back their language. Meanwhile, investors, consumers, and employees continue to demand transparency and bold commitments.
Our upcoming Cost of Silence report (due for release in May) shows that staying silent can be as risky as overexposure. Companies that retreat in the face of criticism risk reputational harm, eroded trust, and reduced influence. We can see this dynamic playing out in real time: Some companies that have rolled back their DEI commitments in response to public pressure have experienced noticeable drops in engagement, while those that maintained their stance have seen increases in consumer support and traffic. This underscores how public positioning on ESG can directly impact consumer engagement and business performance.
In parallel, we are seeing growing evidence that effective sustainability communication starts with language. Terms like “clean air,” “fairness,” and “opportunity” resonate more broadly than charged terms like “climate justice” or “equity.” Strategic language choices allow companies to stay values-driven while sidestepping unnecessary controversy. Internally, messaging must align with business priorities and use the language of frontline teams. Externally, it must resonate across stakeholder groups – from regulators to employees.
Bottom Line: ESG leaders must not only decide what to say, but how, where, and to whom they say it. Strategic messaging is no longer a nice-to-have – it’s a core competency for sustainable business leadership in a divided world.
How do we maintain momentum?
From recent collaborations and internal discussions, a clear path forward to maintaining momentum is emerging. Successful organisations are taking a thoughtful, strategic approach – balancing realism with resilience.
Pause to see clearly: Leaders are taking a moment to pause, cutting through the noise, headlines, and political rhetoric to focus on what’s materially important. By grounding their strategy in core business drivers and stakeholder needs, they are better able to navigate the distractions and maintain clarity of purpose.
Scenario planning for agility: The future is always uncertain, but in today’s rapidly shifting environment, building flexibility into ESG strategies is critical. Many are developing 3–4 broad scenarios that span a range of potential future states:
- Best-case: The current pushback on sustainability follows a familiar “Gartner Hype Cycle” trajectory, leading eventually to a stronger, more mature focus on sustainable value creation.
- Middle-path: Current turbulence is a short-term anomaly, and regulatory expectations and market pressures soon return to 2024 levels, but with sharper emphasis on data quality and value generation.
- Worst-case: Resistance to sustainability becomes systemic in certain regions, deepening social and environmental risks until new breaking points prompt a recalibration.
Prioritising no-regret actions: Organisations are focusing on steps that make sense regardless of the scenario: reinforcing the business case for sustainability, focussing on operational performance, refining language and messaging, investing in efficiency and impact, and engaging with peers to collectively track and respond to emerging developments.
Continuing to move forward: Anchored in values, backed by science, and aligned with long-term business goals, sustainability leaders are discovering new ways to differentiate, build resilience, and create stakeholder value.
In navigating these shifting tides, those who remain grounded in purpose, yet agile in approach, will not only weather the storm, but they will also shape what comes next.
Thank you to our clients for generously sharing their insights – both directly with our teams and through our Forums. These conversations are vital in helping us collectively navigate the challenges and opportunities in sustainability.
If you’re interested in joining future sessions or sharing your perspective, we’d love to hear from you – do get in touch.
