How to overcome anti-ESG movements

Organizations worldwide have headed in the direction of environmental, social and governance, or ESG, initiatives over the past decade to improve sustainability.

While the beginning brought some enthusiasm for the approach, that energy has waned in recent years, with fewer public pronouncements about ESG efforts, especially in the U.S. Different levels of government in certain jurisdictions have also pushed back on these efforts.

The reality is that the ESG label has become a liability, even where the underlying programs have not. Leading organizations facing anti-ESG backlash are not necessarily shutting down these programs; they are translating them into language a skeptical board already respects.

Boards have stopped rewarding the values pitch, which is the case for sustainability made on ethical or mission grounds alone, according to Zach Evans, CTO at healthcare technology company Xsolis.

"The values pitch is effectively dead in the boardroom, and leading with it now costs you credibility," Evans said.

Understanding the ESG landscape

The ESG landscape is not uniform and is somewhat confusing due to fragmentation in the regulatory landscape.

Political fragmentation 

Fragmentation often has a lot to do with politics across different jurisdictions. In the U.S., the Securities and Exchange Commission voted on May 29 to propose fully rescinding the climate-related disclosure rules it adopted in March 2024.

Alternatively, the EU has moved in the opposite direction. The Council of the EU finalized its Omnibus I Directive on Feb. 24, narrowing the scope of the Corporate Sustainability Reporting Directive (CSRD) to companies with more than 1,000 employees and more than 450 million euros in annual turnover, while retaining mandatory sustainability reporting for large enterprises.

State-level divergence 

To add further complexity to the landscape, requirements diverge within the U.S. itself.

Passed in 2021, Texas SB 13 is one of the country's best-known anti-ESG laws. It blocks the state from investing in or hiring financial firms that the state comptroller labeled as boycotting fossil fuel companies. This regulation was seen by some as a way of punishing banks and asset managers for factoring climate risk into their decisions.

A federal judge struck the law down as unconstitutional on Feb. 4. The ruling applies only to Texas, but similar anti-ESG laws in other states now face the same legal risk.

On the other hand, California is moving in the opposite direction. Large companies doing business in the state face a Nov. 10 deadline to report Scope 1 and Scope 2 emissions under SB 253.

The greenhushing phenomenon 

With the regulatory fragmentation and general uncertainty around ESG reporting, many companies have chosen to say less rather than pick a side. That's the phenomenon now commonly referred to as greenhushing.

Greenhushing is not about abandoning ESG, but rather about deliberately withholding information related to sustainability efforts to avoid public scrutiny.

EcoVadis' 2025 U.S. Business Sustainability Landscape Outlook found that 48% of surveyed companies kept sustainability investment unchanged, and 31% said they are investing more while promoting it less. The gap between what companies do and what they will say in public is exactly the space IT and sustainability leaders now must manage.

Why IT leaders can't afford to abandon sustainability 

Even with the regulatory confusion and the trend toward greenhushing, IT leaders must remain focused on sustainability efforts.

Sustainability is not going away. It has real requirements, especially in the EU and California, with which organizations must comply. The basis of compliance is typically auditable data built and maintained by IT systems. If IT leaders step back, it severely affects an organization's ability to back up its sustainability claims.

For IT leaders, this work is no longer a separate program that can be paused or handed off. It shows up directly in the infrastructure budget.

"For any company running AI at scale, energy isn't an ESG line item anymore; it's a direct and growing line on the P&L [profit and loss], so compute efficiency is just cost discipline," Evans said.

Strategic responses to anti-ESG movements

Leading organizations are taking several different approaches to adjust to potential anti-ESG sentiment.

Reframe ESG as a business strategy

Rather than treating ESG as a compliance initiative, teams can frame it as a corporate sustainability strategy anchored in business fundamentals.

Anuj Shah, who leads the global ESG and impact consulting practice at Grant Thornton Stax, pointed to an unconventional example with AI leader Anthropic. Rather than having ESG as part of its communications plan, Anthropic integrated responsibility and risk management into its legal structure. It's structured as a public benefit corporation, which lets directors balance a stated public-benefit mission with shareholder interests.

Shah's broader point extends past any single company.

"Companies operating in sectors where stakeholder trust, governance, resilience and license to operate are fundamental business issues that don't necessarily need ESG labels for the work to remain important and visible," Shah said.

Strengthen data and technology infrastructure

Data is the foundation for all types of reporting, and having the right instrumentation in place is a clear sign of proper IT instrumentation that measures the organization and its risk.

"Genuine risk management requires measurement infrastructure: metered energy data, supply chain traceability [and] auditable emissions accounting," said Mark McNees, managing consultant at The McNees Group and director of the Social and Sustainable Enterprises at Florida State University's Jim Moran College of Entrepreneurship. "That is systems work, and it leaves a trail of procurement, integration projects and head count."

Refine the communications approach

Rather than considering and discussing ESG in altruistic terms, there is value in having the right language for the right audience.

"Certainly, a risk-based language model will appeal more to board members, finance leaders, etc. And a value/values-driven model will be a stronger hook for marketing, sales and operations teams," said Marcy Twete, founder and CEO of ESG consulting firm Veerless.

Engage stakeholders strategically

ESG shouldn't be a standalone department anymore.

"We've seen a number of companies reframe from an ESG focus and perhaps an ESG department to a cross-functional ownership model run by a Steering Committee," Twete said.

Going a step further, she also noted IT leaders should integrate sustainability into existing risk processes.

"It's not enough to name cybersecurity an ESG risk as well as a financial one. You have to also value that risk across multiple functions," Twete said.

Focus on measurable impact

Altruistic, generic goals are not the right path to overcoming anti-ESG sentiment. Instead, quantifiable performance metrics can help teams prepare for and respond to these movements.

McNees teaches graduate students to build intensity metrics, such as emissions per revenue dollar.

"An intensity metric is a profit metric wearing an environmental label," McNees said.

Action plan for business leaders 

Building out an action plan to overcome anti-ESG backlash requires both short-term and long-term actions.

Immediate actions to take include the following:

• Audit communications. Review all current ESG communications and remove politically charged language. The fix is not silence; it is a different framing. "What works is showing the board that most of these efforts are already funded under other names," Evans said.
• Detail claims. Establish empirical evidence for all sustainability claims to fight against potential backlash. "The strongest business cases are usually the ones that can answer one or more of those questions with evidence rather than aspirations," Shah said.
• Identify outcomes. Rather than having generic initiatives, leaders should map ESG initiatives to specific business outcomes, including cost savings, risk reduction and customer retention. "If executive compensation, procurement scoring or divisional budgets move when environmental and social metrics miss, the work is real, because the organization made it expensive to ignore," McNees said. 
• Integrate into risk management. ESG cannot be siloed. IT leaders should implement data governance controls for ESG comparable to financial reporting standards. "Good risk management in ESG should easily slot into the company's larger enterprise risk management processes," Twete said.

Some activities that require long-term planning include the following: 

• Link executive compensation to measurable ESG outcomes. "If nothing in anyone's pay changes, the metrics are decorative," McNees said.
• Establish supply chain due diligence infrastructure. Organizations need systems to identify and document ESG risks among suppliers, not just their own emissions. Large multinational firms already face this under the EU's Corporate Sustainability Due Diligence Directive, which will be fully in effect by 2029.
• Prepare for regulatory convergence. Regulations are on a path toward convergence in many jurisdictions. The International Sustainability Standards Board (ISSB) has a single global baseline for sustainability disclosure, making reporting easier. The ISSB absorbed two earlier frameworks: SASB, which set industry-specific metrics, and TCFD, a climate-risk management framework that formally disbanded once its recommendations were folded into the new standard. The EU is not adopting ISSB directly, but its CSRD requirements are largely comparable, enabling compatibility across the two reporting regimes.
• Build business resilience and adaptation capabilities. Functionally building ESG compliance is about supporting business resilience and reducing risk.

"I frame the whole thing as enterprise durability: the practices that keep costs defensible, keep you through a security review and keep you resilient," Evans said. 

Fundamentally, ESG is about accountability, in good times and bad. Whatever approach a company takes to the anti-ESG backlash, it eventually faces the same test -- not hostile legislature or a skeptical board, but a bad quarter.

"The most reliable signal is whether it survives a bad quarter. That's when cosmetic commitments are the first thing cut, because nobody owns them. Real commitments hold because by then they're load-bearing: They're tied to cost, risk or revenue that someone is measured on," Evans said. 

Sean Michael Kerner is an IT consultant, technology enthusiast and tinkerer. He has pulled Token Ring, configured NetWare and been known to compile his own Linux kernel. He consults with industry and media organizations on technology issues.