The New Era of ESG

Over the past two decades, Environmental, Social, and Governance (ESG) principles have become central to corporate strategy and investment priorities worldwide. Yet, recent years have seen growing criticism—especially from within the business and financial sectors—regarding inconsistent standards, measurement difficulties, and the tension between ESG commitments and financial performance. Global shifts in late 2024 and early 2025, including the return of the Trump administration and its deregulatory, anti-ESG stance, have deepened uncertainty. Meanwhile, in Europe, the EU Omnibus Package has raised questions about the scope and timing of sustainability reporting obligations.

Despite political polarization, evidence shows that ESG is not declining but evolving. Many companies continue to integrate ESG principles into management systems, sometimes under different names, using them as tools for risk management, governance improvement, and long-term value creation. Even institutions withdrawing from climate alliances such as GFANZ continue implementing climate-related risk models and resilience strategies.

Financial actors like Norges Bank Investment Management have adopted AI-based sustainability assessments across vast portfolios, highlighting a shift toward operational integration. Academic and professional surveys—such as those by Harvard Law School’s Forum on Corporate Governance and EY’s Europe Long-Term Value study—show that executives still view ESG as a strategic driver of competitiveness and long-term stability rather than a mere compliance requirement.

The EU Omnibus Package, far from signaling regulatory retreat, aims to streamline ESG frameworks and clarify legal obligations under directives like the CSRD and CSDDD. Companies such as Schneider Electric view these adjustments as opportunities to enhance consistency and investor trust.

Ultimately, ESG is undergoing a process of maturation and institutionalization. While its terminology may evolve, its substance is becoming an inseparable component of modern corporate governance—essential for managing environmental, social, and financial risks in an increasingly volatile world.

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