Collaboration & Co-Creation

Senior Sustainability Leaders Tell Us Why ESG Won’t Die in 2025

Headlines have been flush with stories reporting the death of ESG. But in reality, it’s been more of a ‘reset’ than a ‘retreat.’ We dig into the challenges and opportunities businesses will face in 2025, with insights from the Ipsos ESG Council.

Sponsored Content | By Ipsos | Published 1 month ago | About a 4 minute read

Image: Richard Rojas

The global landscape of Environmental, Social and Governance (ESG) strategy is in constant flux — presenting both unprecedented challenges and exciting opportunities for businesses.

While some companies may have recalibrated their approaches, what we saw in 2024 did not represent a retreat from responsible business practices, but rather a necessary “reset” for long-term viability and impact.

How can companies navigate in a swiftly evolving landscape, and adapt to the new environment without facing backlash from key stakeholders?

To answer these questions, Ipsos brought together the second sitting of the Ipsos ESG Council — made up of more than 50 global sustainability leaders, sharing their insights on the current state of ESG.

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While a resounding 90 percent of Council Members agree that ESG is fundamentally transforming business practices, the path to progress is not without obstacles. Here are four issues shaping the future of ESG:

1. The continued politicization of ESG

The political polarization of ESG is a global problem, particularly around DEI issues and climate action. This polarization constrains companies’ willingness to engage in sustainability communications and creates uncertainty, which makes long-term planning a real difficulty.

44 percent of ESG Council Members agree that ESG is more of a political football than it is a priority for politicians and governments.

While political pressures endure, companies are developing strategies to navigate them. These largely fall into the following three approaches:

Aligning initiatives with the core business value. The closer one hews to the purpose and mission of the company — the less likely one to be called out for greenwashing or *“woke capitalism.”
Balancing stakeholder interests. While government regulators are still important, employees, investors and consumers are key stakeholders, too.
Strategically managing comms. While keeping a lower profile limits the reputational and financial lift a company can receive from its sustainability actions, there are still benefits in cost savings, compliance and targeted outreach. As one Council Member noted, "We've had to limit our approach. Being too vocal about ESG in North America poses significant risks."

2. The rocky road from ambition to practice

Developing and implementing a successful ESG strategy is no easy task. Three foundational learnings emerged from Ipsos ESG Council Members’ experiences over recent years:

ESG success demands a holistic and integrated strategy, rather than piecemeal initiatives. 98 percent of Council Members say they collaborate with other departments to fully embed sustainability, but 38 percent say that one department offering an objection to a proposed initiative can derail an entire project.
Strong governance is key to making progress. Without good governance, the very best initiatives will likely fail to get off the ground or not be executed to their full potential.
The initiatives and strategies a company should prioritize will depend on sector, market and company dynamics. Double materiality assessments are increasingly being used to identify priority areas. But even these identify an average of 11 priority areas — perhaps too many to effectively focus on and deliver action.

3. The challenge of proving ROI

The ultimate defense against the many and varied challenges to ESG is that investment in such initiatives leads to the creation of business value. But how do you measure and communicate the true value of sustainability?

Ipsos ESG Council Members acknowledged the difficulties in quantifying return on investment (ROI) of ESG initiatives, particularly for social programs.

However, best practices are emerging — such as integrating ESG metrics into financial decision-making, leveraging both quantitative and qualitative data, and adopting a long-term perspective that recognizes the value of building resilience and anticipating future trends.

4. Bridging the gap between profit and purpose

But in many companies, there is still a fundamental tension between core business value propositions and ESG commitments.

For ESG to be truly authentic and credible, it needs to be aligned with business objectives and woven into core value propositions. This requires a fundamental mindset shift, moving beyond viewing ESG as a cost center or compliance exercise to recognizing it as a driver of innovation, resilience, and long-term growth.

As one Council Member put it, "The significant change for us is recognizing that ESG is not an adjunct but should be central to every decision we make.

Looking ahead, regulation will play an increasingly important role in advancing ESG and is already driving ESG reporting to become more rigorous and standardized. AI and other technologies will also play a key role and are also expected to revolutionize ESG data collection and reporting.

Find out more about how to navigate the evolving ESG landscape by reading the 2025 Ipsos ESG Council Report.

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