Positive Impact Blog

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Tag Archives: environment


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ESG backlash and the changing sustainability agenda

Over the past decade, ESG (environmental, social, and governance) performance became synonymous with responsible, forward-looking business. Companies invested heavily in dedicated teams, reporting systems, and KPIs; investors integrated ESG data into financial analysis; consumers scrutinized supply chains; and policymakers created regulatory frameworks that placed sustainability at the center of economic strategy.

But as ESG moved into the mainstream, a counter-movement emerged. Today’s backlash – fueled by political polarization, misunderstanding, and regulatory fatigue – is reshaping how organizations communicate, prioritize, and operationalize sustainability. Some now argue ESG distracts from “real business,” while others insist it remains essential but requires reform. The result is strategic uncertainty.

Yet this moment is not about the end of ESG. Rather, it signals a shift toward a more mature phase of sustainability, where credibility, transparency, and measurable outcomes matter more than labels. Understanding the roots of resistance and adjusting corporate strategy is now critical for leaders.

1. The rise of ESG and the roots of resistance

ESG’s rapid ascent builds on decades of environmental and social progress. The environmental movement of the 1960s–80s raised public awareness of pollution and resource depletion; the Brundtland Report (1987) gave sustainable development a global policy foundation; and frameworks like the Millennium Development Goals and the 2015 Paris Agreement embedded sustainability in global economic planning. Between 2015 and 2020, ESG commitments surged, sustainable finance accelerated, and companies with strong ESG credentials enjoyed valuation premiums.

But this momentum also set the stage for backlash. In the United States, ESG became entangled in ideological battles. Critics framed it as political overreach, unnecessary DEI activism, or a threat to competitiveness. Several states introduced legislation restricting ESG-oriented investment, fueling the narrative that ESG is “anti-business.”

Europe’s backlash is more technocratic and political than ideological. Companies cite compliance overload, reporting complexity, cost pressure on SMEs, and concerns about competitiveness. Regulatory adjustments, such as phased CSRD (Corporate sustainability reporting directive) implementation and delayed deforestation rules, reflect these tensions.

2. Why ESG became a target

Several structural issues made ESG susceptible to criticism:

Overstretch and overpromising
ESG became a catch-all concept expected to serve as climate strategy, social policy, risk indicator, and investor communications tool. Its expanding scope blurred its meaning and fueled skepticism.

Overlapping standards
Companies navigated an ecosystem of overlapping standards—GRI, SASB, TCFD, ISSB, CSRD—creating duplication, inconsistency, and reporting fatigue. This burden fell hardest on smaller companies without large sustainability teams.

Greenwashing and greenhushing
High-profile accusations of greenwashing undermined trust. Fear of scrutiny pushed many companies into greenhushing: quietly continuing sustainability work while reducing public communication.

Politicization
In the US, sustainability, diversity, and governance became cultural identifiers. What began as risk management turned into an ideological battleground.

3. Diverging global pathways

While the backlash is most visible in the US, global ESG pathways are diverging:

United States: ESG under pressure
Political polarization shapes public debate. Some states restrict ESG integration in public investments, and fund managers rebrand ESG products. Yet private companies continue sustainability work behind the scenes, driven by risk management, customer expectations, and regulatory exposure.

Europe: Reduce and reform
Rather than rejecting ESG, Europe is reducing and reforming it. While existing legislation remains in place, new regulations are slowed and scaled down. While investments remain strong companies demand clearer guidance and less administrative burden. Europe is entering a phase of “doing less ESG and better” not abandoning it.

Asia and Emerging Markets: Acceleration
In contrast, momentum is accelerating in Asia and in emerging markets. Governments treat climate and nature risk as economic realities rather than political controversies. Supply-chain legislation from Europe forces sustainability requirements downstream, and emerging markets increasingly shape global standards through manufacturing, infrastructure, and resource industries.

4. The impact on business

The ESG backlash has concrete implications for companies:

Capital allocation is more demanding
Investors now expect verified emissions data, credible governance, and detailed transition plans. Narrative-driven sustainability is no longer enough.

Reputation is harder to manage
Companies face pressure from both anti-ESG critics and advocates demanding faster, deeper action.

Supply chain expectations are rising
Companies must demonstrate deforestation-free sourcing, human rights due diligence, Scope 3 emissions transparency, and circularity strategies—requiring new data and closer supplier engagement.

Talent and culture are affected
Younger employees value purposeful work. Reducing sustainability ambitions risks weakening morale and employer branding.

5. How leading companies are responding

Companies that remain ahead of the curve are shifting from ESG as a reporting function to ESG as a strategic capability:

  • Embedding sustainability into corporate strategy (operations, procurement, finance, R&D)
  • Prioritizing measurable impact over polished storytelling
  • Investing in high-quality data—real-time carbon management, audited LCAs, digital product passports
  • Pushing for simplification and alignment across regulatory frameworks
  • Moving away from the politically charged “ESG” label toward terms like positive impact, transition strategy or responsible business

6. What leaders can do now

Executives can navigate this new phase by:

  1. Reframing ESG in terms of risk, innovation, competitiveness, and resilience.
  2. Strengthening governance with clear roles, accountability, and board oversight.
  3. Investing in robust data systems for Scope 1-3 emissions, supplier visibility, and third-party verification.
  4. Preparing for increased scrutiny by aligning marketing and sustainability teams and ensuring all claims are evidence-based.
  5. Focusing on material issues such as climate, biodiversity, human rights, circularity, and governance.
  6. Collaborating across value chains, recognizing sustainability as a shared challenge.

Conclusion

Despite the political noise, the direction of travel is clear: climate risk is financial risk; biodiversity loss affects economic stability; resource constraints shape competitiveness; and regulation – whether streamlined or expanded – is here to stay. ESG is not disappearing, but it is evolving.

The organizations that succeed in this new landscape will be those that build credibility, demonstrate real impact, manage risks rigorously, and innovate within new constraints. ESG and sustainability may no longer dominate headlines, but they have become a core element of corporate strategy and a foundation of long-term business resilience.

This blog post was revised with the help of Chat GPT.


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Dreaming up the university of the future at the OIKOS Future Lab 2013

90 students from nearly all chapters from around the world met in St Gallen for a two-day session to inquire how to place OIKOS in the future of management education. I was invited as one of a number of thought leaders from around the world to trigger their creative process. What a delightful experience it was!

The other thought leaders were Max Oliva of the HUB Global and Teamlabs, Martin Cadée of The Journey Network and Knowmads, Traian Bruma who created CROS a student-led university in Romania and Rasmus Johnsen teaching philosophy at CBS in Copenhagen. What an amazing assembly of experience and creative vision in the emerging space of the future of management education.

After a first day spent getting together onto the Journey and applying the Impact Canvas, inspired by the Osterwalder Business Model Generation Canvas, to various concrete projects within the OIKOS framework, day two was dedicated to co-creation. OIKOS is the largest sustainability-focused student organization world-wide with chapters on all continents. We facilitated the initial part of the co-creative process of the students which involved painting a picture of the future of the business school in 2 phases.

Phase 1 consisted of a first group of students of drawing together a picture of what such a university could or should look like. Phase 2 consisted of a second team inheriting the drawing and determining what role OIKOS might want to play in such a scenario. The discussions which accompanied the creative painting exercise were both fascinating and revealing. While we typically think that we need to first know what to point, thus starting with a lengthy debate that ends with a few hasty scribbles on a nearly empty page, our first group immediately attempted to visualize each idea they had about the future university on paper without fully understanding what was emerging or what the final picture might be. About half-way through, one part of team 1 who had worked mostly on one side of the drawing explained what they had ended up painting and vice-versa. The team exchanged places and enhanced the designs of their friends. What emerged what a comprehensive picture which shows the future university as an open space embedded in both society and the environment thus showing the larger planetary context, while also showing the journey of an individual student working on his quest (what do I want to do in future) in his own time, working both in the collaborative open space with facilitative professors, business professionals and thought leaders as well as within reflective spaces, moving back and forth between practical experiences in society (hospitals, businesses, etc.), creating their own individual curriculum in the process (see image 1).

Phase 2 started with an immensely grateful new student team who was amazed by the creative piece of art the first team had drawn up for them. Their analysis of the picture opened the debate on what such a future university could be and what role OIKOS might want to play in there. The second team was nearly afraid to destroy the beautiful foundation work of the first team. Again, rather than trying to first finding the solution, they launched in daring to create a huge infinity loop all across the 3 posters indicating that OIKOS could be the connecting enablers supporting the student in her journey from society, the environment and the university and along her individual learning journey. The open space of the university ended up being the crossing over of the two lines which was drawn up into a green heart. The team furthermore highlighted the planetary context the first team had hinted at by filling in a blue background to the entire picture immensely strengthening the message and providing a common space which symbolized the potential of OIKOS as a universal platform of learning (see image 2).

What impressed me most is how effortlessly this creative process went along and how painting thoughts actually helped to develop thinking. We tend to think it works the other way around. We were accompanied by an amazing artist Klaus Elle who provided the visual track (as compared to the sound track) of what was going on. His ability to summarize sessions with one telling image must have seriously inspired us all!


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Planetary resilience. What is it and why does it matter?

When it comes to resilience, what good does it do a single business or industry to prevail if it does so at the expense of other sub-systems or even the bigger system itself? I’ve shared my views in Planetary Resilience on PwC’s Resilience site: http://pwc.to/12PscYV

What are your thoughts on that?

Collaboratory with Greenpeace

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A discussion with Amazon Campaigner, Tatiana de Carvalho on the Greenpeace ship Rainbow Warrior during the RIO+20 United Nations Conference on Sustainable Development.


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People’s summit Rio+20 video report back


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The perspective of the South

The President of the Bolivian National State starts with a passionate speech criticizing the conference to abuse the environment to serve the goals of all players. He says that the resolution wants weak states with weak institutions. He makes a number of examples of how Bolivia is different in how it assures a harmonious life of all people and the planet. He says that Bolivia has passed a law two days ago that foresees the assurance of the well-being of Mother Earth, its restoration of health if needed. He demands other developing countries also re-privatize its own resources. Before he became president, water and electricity was privatized in Bolivia, now they have recuperated most of their own resources. He concludes by clarifying that for him, “green economy” is a new form of colonialism!

The President of Ecuador follows just as passionately highlighting the difference of CO2 emission between the 20% poorest vs. the 20% richest countries: for every ton of CO2 emission of the poorest countries, the richest countries use 83 tons! He criticizes the mechanism for the Kyoto protocol pointing out important loopholes such as the fact that governments were not compensated for maintaining forests, but paying for reforestation if forests have been cut down and sold and need to be reconstructed. He demands a compensation for not exploiting the 14 billion dollar equivalent underground oil reserves and therefore not causing CO2 emissions by leaving the resources in the ground. Ecuador has demanded that every nations recognizes the rights of mother Earth, that nature is not an object but a subject! He is frustrated that this suggestion was rejected. He concludes by saying that the root of the problem is in Europe and the U.S. where money rules nature. And that it is a big tragedy that the problems we face is not a technical one – we can safe the planet and all live well – but a political one. He reminds his fellow statesman of the girl from New Zealand who spoke yesterday asking that rather than saving their face, they save the planet. He highlights that 80% of the countries that have just attended the G20 summit in Mexico are not attending the Rio+20 conferences and don’t even care enough about our planet to come and save their face!

 

 


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Public-private partnership on green growth

A high-level session hosted by the Danish prime minister and the President of South Korea and the Mexican Minister of the Environment filling in for his president and Unilever CEO Paul Polman. The Danish and South Korean statesmen make an unlikely couple: a beautiful, young and tall blond lady and a small, restrained, nearly introverted gentleman. They jointly present the Global Green Growth Forum (3GF) as an innovative international action-oriented platform in service of  a future “we want”. UN Secretary General Ban Ki-moon is absent as is the Mexican Prime Minister who had just hosted the G20. After short statement, the South Korean Prime Minister and his delegation leaves. When will the discussion start?

We learn that the heads of state have somewhat unexpectedly already approved the proposed new document generated by the Brazilian a day ahead of schedule. They seem to have followed the recommendation of the delegates who had unanimously approved the overnight effort of the Brazilians to save the conference a few days ago. This is certainly weird and a major disappointment for many. Weird because the procedure of the state addresses is still going on in the main hall of the conference. And a major disappointment as the concerns of minorities both in the global South as well as other major groups (NGO, youth, women, etc.).

Paul Polman points out that the agreement falls short of the expectations as it lacks clearly defined goals and measures to be achieved. Clear words that express a broad general sentiment. The Danish prime minister says she is “moderately satisfied” with regards to the outcomes of the RIO+20 conference. She underlines the importance of having green economy recognized as the way forward and clarified that setting a new high level global governance framework is a first step in a longer process. She reminds us that we will need  everybody will now have to go and apply the notions now, and business most particularly. Paul Polman highlights that there is a lot of energy in the private sector as a result of the RIO+20 conference with many important initiatives now emerging.

Three goals (universal access to energy by 2023, providing 3 billion people with modern cooking fuel, minimize adverse environmental externalities) in the energy are about to be agreed on and supported across all sectors. The head of UNIDO clarifies that it will take 48 billion a year for the next 20 years is needed to achieve this. This money must come from the private sector and governments seem confident that corporations will provide this cash-flow. The conversation turns on money, the financial crisis and the need for public subsidies. Polman demands transparency and points out the 33 trillion of asset from 1100 organizations reporting in the Global Reporting Initiative (GRI) as a start to provide the kind of transparency that is needed to succeed.

Paul Polman states that business responds best to signals from the market which are reflected by investors. He demands new measures for evaluating the real value of a company and challenges the investment community to come up with relevant new measures. This and signs from the consumers will be much more relevant and appropriate than broad subsidies. Not everybody on the panel agrees. Polman concludes by stressing also the importance of supporting the youth and congratulates the Higher Education Initiative (HEI) which gained 47 more signatures during this conference reaching now more than 300 universities. BSL was among the first dozen universities to sign this important initiative which is supported by our World Business School Council for Sustainable Business.

In the middle of the closing remarks there is a commotion at the back of the room: Ban Ki-moon walks in. As there is no spare chair for him, everybody jumps up and leaves the panel, leaving the UN Secretary General sitting quite lonely up front. Tony-Schmidt who is by now called the fairytale godmother of Sustainability. Ban Ki-moon thanks her for demanding that the UN leads the global governance framework and that he takes this very seriously.

It becomes increasingly difficult to listen to Ban Ki-moon, as loud, disruptive voices reach us from the outside where a demonstration must be gaining force and size. In the intimate setting of a quite inappropriately tiny room for such a high-level session, we wonder what expects us outside. It feels like I am on the other side suddenly, on the inside fearing demonstrations outside, whereas so far I have been on the outside doing the rebelling with our guerilla business school of 50+20.


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Here is today’s launch speech.

“Today is not just another day and not just another conference. Today, we present to you the result of two years of voluntary work by many many passionate people who deeply care about ensuring that business schools and management education truly contribute to a better world. In this process, John Cimino’s song the CALL which he just performed has been our inspiration to be daring and courageous.
I was 22 years old when the original Rio conference took place in 1992. I was studying business at BSL, the school I now run as a Dean. Stephan Schmidheiny‘s book “changing course” changed my life. While I was environmentally conscious in my private life, my experience at work had taught me that I better leave personal interests at home and be strictly “professional” at work. With Rio 92, I sensed a new world opening up – one where I could integrate my personal passion into my professional work and help companies to become sustainable.
Today is not business as usual. We need something different from the usual conference debates. We have seen and heard all this before … The same words, the same arguments. We are busy rearranging deck chairs while the titanic is sinking! This cannot be another Copenhagen! The stakes are simply too high. The time is up – it is OUR generation and this is OUR time. We are the ones, who need to drop what we do, reflect and take courageous steps in a new, right direction. Now!
50+20 is a collaboratory, an open-source effort of GRLI, the WBSCSB and UN PRME. Our aim was to come up with a radically new vision for management education. A vision that started by asking big questions, like
– what kind of a world do we want?
– what does this mean for the kind of society we will need?
– what is the role of business and the economy in this?
– and what should business contribute to such a new world?
– what kinds of leaders do we need to achieve such a transformation?
– and as a result, what would that mean for management education?

We worked in a collaborative process with people around the world, including more than 100 thought leaders. Many people in this room have been involved in ways large and small. And we invite you all to stand up.

Together we created a vision beyond incremental change. Management education FOR the world, management education in service of the common good. We see 3 fundamental roles. We reframe education, we give a concrete purpose to research and we introduce public engagement as a new responsibility for business schools.

This is about new benchmarks and the benches you see here symbolize that. They have been created by artists around the world from re-cycled materials. We invite you to look at them, sit in them and feel the creativity and the fire for a socially just and environmentally sustainable future they embody.

Today, right here, right now we officially release the 50+20 Agenda. Here it is in physical form.

Digitally it’s in the conference documents and online at 50plus20.org. Its the start – we have developed a process of engagement, there will be a book in the fall, there are over 100 emerging benchmarks on the website which may serve to inspire. We have worked hard to strip out the
greenwashing the blue washing and well meaning intentions.

But what matters is not what others do, it is your engagement and whether we personally take up the challenge of service to mankind. If you share the passion to drive deep change and would like to take action in an advanced community please give me or Katrin your business cards.

So now we bring you the voices and faces from around the globe who have helped us define the 50+20 vision. Turn off your email open your hearts and souls, and enjoy what the people out there have to say to us.



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Why are global mega cities so ugly?

I woke up to a grey and rainy skyline of the outskirts of Sao Paulo. During my breathing exercise I reflected on the many million of my fellow global citizens who will leave their homes in the country side to join cities like this. Apartment blocks lined up until the distant horizon in a general hazy, grey heavy and overcast sky. The heavy rainstorm suited that mood well. Are we crazy? Who on earth would in her right mind design such a picture of inhuman living cut off from nature as the dream of so many of us with otherwise limited futures?

Why do we design and build cities for our fellow citizens to live and work in that offer subhuman conditions and that are totally disconnected from nature. If I was an alien visiting planet Earth, I would seriously wonder what the inhabitants had in mind when they figured out how to live together. Somehow our societal governance structures don’t operate in the best interest of all. Why do we accept this? And what if we could and would actually start doing something about this?

I started my part of the 50+20 pre-RIO conference with this picture of the Sao Paulo skyline which I took this morning. I talked about where we as a global community are today versus where we need to get to to ensure that the 9 billion of us will be living well and within the limits of the planet (as per vision 2050 of the WBCSD). Nobody took offence. As a matter of fact, I didn’t have to spend more than a short moment on why we need a better world, new societies and as a result a new role for business. Swiss ambassador Meier who opened for us set the stage by highlighting all the things that are going wrong today and everybody was nodding. Given that this was the first time we talked about our project in front of a non-captive audience of mostly business executives, this was significant. There was no question about the fact that business must contribute to society and the common good. But: there was much blame on “others” and much frustration about things not going fast enough.

Thomas Dyllick from the University St. Gallen and I had lunch with Angelica Rotondaro who runs the St. Gallen hub here. She is doing a great job finding internships for St. Gallen students who want to experience the NGO or SME worlds in South America. She has an amazing network of social entrepreneurs in the fair-trade sector and she shares her challenges with us. Before long, we are in the burning issues of the agricultural world. I can’t help it but I get mad every time I reflect on the abuse that is taking place around GMO seeds of just about anything by now. The importance of fair-trade as a small but important new growth development supporting small regional farmers in their nearly impossible struggle against the multinational superpowers.

The other main issue that comes up today is the big difference between the challenges of developed vs. developing countries. As Julia von Maltzan Pacheco of University FGV points out correctly, people here in Brazil are craving for getting to the lifestyle we have achieved in the North or West (I am coining Northwest as a global new term for the developed world). People in the South and the East want that refrigerator, that car and that TV they have been longing for. We cannot tell them that “growth” is not sustainable (even if it isn’t). As Martin Bernard from Amrop points out: “there is no such thing as sustainable growth, the planet does have finite limits”. Well, we cannot even publicly say that to the folks in the Northwest! I liked Christian Cetera’s perspective (Director Training & Development of GE for South America) who humbly stated that his organization is nowhere despite having achieved an unheard of shift in their business reducing their financial services business from 55% to less than 15% of their net profits. While GE defines their ideal manager today very different from the days of Jack Welsh, he concludes that GE “has a long way to go.”

I walk away from our presentation happy with the unilaterally positive reaction of our vision. I also realize that we need to ensure that our audience understands that we have completed but the first step in a long journey: we propose a far-out, new vision that now needs concrete next steps in order to generate action and a relevant pace to realize it. We have passed the “fire drill” or “dry run” and are now ready for RIO+20!