Last year, we introduced the Era of Essentialism, which means prioritizing issues that are core to the business—those that are fundamental drivers of value. This focus on the intersection of business performance and ESG (environmental, social and governance) remains true today.
At first glance, recent headlines might suggest a wholesale retreat from ESG. Companies are scaling back programs and time-bound goals, while countries reduce “green” incentives, loosening regulations and disclosure requirements, and scaling back on investments. While these developments can be alarming, they also open up room for a more sobering and serious conversation on the business of sustainability.
This shift represents a further pivot away from grand commitments and bold claims to a quieter, but equally earnest sustainability agenda. For example, Microsoft’s Chief Sustainability Officer recently noted that they have stopped renewable energy certificates (RECs), instead investing in long-term carbon reduction and removal projects. While they still aim to be carbon negative by 2030, they acknowledge that in the short term, the company may no longer be carbon neutral. This announcement underscores the company’s continued commitment to sustainability, even as they report an increase in emissions.
Additionally, at the end of 2024 Coca-Cola announced that they would not meet their previously set goals and were extending their timeline. They have also updated their goals to focus on three areas: improving water security in high-risk locations, reducing packaging waste and decreasing emissions. Although this was met with some backlash, it reflects a necessary evaluation of what is working and what is not, allowing companies to focus on areas where they can realistically make a tangible impact.
Within companies, chief financial officers are also backing ESG in 2025. In BDO’s 2025 CFO Sustainability Outlook, 48% of the 500 CFOs surveyed said that ESG matters posed significant operational risks to their company. As for areas of opportunity, the survey respondents linked increased innovation and new business opportunities, increased revenue, and access to financing or investment opportunities as popular business benefits to corporate sustainability initiatives over the past five years. With just under half of CFOs surveyed believing their involvement in ESG strategy and execution will increase in the next 12 months, working across silos and with financial teams to build the business case for sustainability should be a priority.
Public Support for Sustainability Efforts
It is also clear that there is still broad public support for sustainability efforts. According to APCO research, despite the polarization of the term “ESG,” Americans strongly support companies acting as responsible environmental stewards. Over 85% of individuals from both major political parties emphasize the need to reduce waste and conserve resources. Additionally, 89% of Democrats surveyed, compared to 84% of Republicans believe companies should be making investments to ensure they can adapt to unpredictable events, such as the impacts of extreme weather.
There are still headwinds to be sure—regulatory instability may curtail some needed investments, phrases such as “ESG” will continue to be polarizing with the public and short-term ideological wins may, in some instances, overpower the case for long-term competitive value. However, the work of sustainability remains critically important, as does the need to communicate the business imperative behind this work.
- Evaluate the impact of your investments: Clarify the purpose behind your strategy and the outcomes you want to achieve. Be intentional about which sustainability goals your company is investing in and how they benefit the business.
- Know your audience: Understand how your sustainability plan impacts each stakeholder group. Create audience-specific messages that resonate.
- Communicate with intention: If you are reframing goals, be clear on what you are doing and why, especially as you approach key milestones.
- Plan for the future: Build a long-term strategy, create scenario plans and embed decision-making frameworks into your organization. As shifts continue to occur in the external environment, having clear processes and governance structures will help your company navigate these changes.
While the sustainability landscape continues to shift, the commitment to ESG fundamentals—creating a business that is sustainable in the long term—remains steadfast. By focusing on essentialism, effectively communicating business imperatives and holding values close, we can continue to see companies make meaningful progress.
