Guest post by: Rajiv Jalim, Global Director of Sustainability Solutions, Novisto
This summer, insurers across southern Europe were doing arithmetic they hadn’t planned for. Repeated heatwaves pushed claims higher, widened the gap between what businesses lost and what their policies covered, and left companies absorbing costs that used to be someone else’s problem. None of those conversations were labeled ESG. They were about premiums, downtime, who absorbs the cost of disruption and what businesses need to spend to prepare for the next event.
That’s the pattern showing up across corporate sustainability right now. The word “ESG” is retreating from annual reports, earnings calls, and press releases. The underlying exposure it was meant to capture is not retreating at all.
The data on the language shift is stark. The Conference Board found that the share of S&P 100 companies using “ESG” in their sustainability report titles fell from 40% in 2023 to 25% in 2024, with the decline continuing into 2025. On earnings calls, FactSet data shows mentions of “ESG” among S&P 500 companies are down more than 50% since peaking in late 2021. Political pressure, greenwashing scrutiny, and a general wariness of the acronym have all played a role.
It would be easy to see that as companies stepping back from sustainability. In reality, much of the work is simply showing up in different parts of the business. Sustainability-related risks haven’t gone away; they are increasingly being discussed using the vocabulary that businesses already use to talk about risk, including supply chain disruption, insurance exposure, operating costs and financial planning. Climate and resource pressures now show up as supply chain disruption, insurance exposure, energy costs, workforce safety, and capital planning decisions. CDP data puts a number on the stakes: among companies that disclosed full environmental data in 2025, more than a third identified extreme weather as a material financial risk, together reporting close to $3 billion in realized losses and projecting $714 billion more. Notably, the same research found that the cost of mitigating those risks runs roughly 13 times lower than the cost of absorbing them. That is not a sustainability argument. It’s a business case.
That reframing is changing who does the work, not just what it’s called. Finance teams are weighing resilience investments against the cost of disruption. Procurement is asking suppliers for emissions and labor data as part of ordinary vendor risk reviews. Operations and EHS teams are tracking energy, water, and waste not to fill out a disclosure template but to manage cost and continuity. None of this sits neatly inside a sustainability department anymore, and in most companies, it was never meant to.
That distribution creates a problem sustainability teams know well but is now landing on desks that don’t: data that was built for one annual report has to hold up under continuous, cross-functional use. A spreadsheet updated once a year for a disclosure deadline isn’t built to inform a procurement decision in March or a capital allocation debate in Q3. Extending sustainability data into these functions requires the same discipline any other business-critical dataset needs: clear ownership, documented methodology, a record of how figures change over time, and a system that lets finance, procurement, and operations work from the same numbers instead of reconciling five versions of them.
This is also where regulatory uncertainty matters less than it may seem. Disclosure rules will continue to shift across jurisdictions, and companies are right to be cautious about over-building for requirements that may change. But the infrastructure to track material risk, verify data, and get that information to the people making decisions doesn’t depend on any single regulation. It’s the same infrastructure finance teams need to understand exposure, assess trade-offs and plan with confidence.
Companies watching the ESG label recede should ask a different question than whether to keep using the term. The better question is whether the underlying process, the data, the ownership, the ability to see a climate or resource risk clearly enough to act on it, would survive if the word disappeared entirely tomorrow. For a growing number of businesses, it already has. What’s left behind is less visible, more distributed across the organization, and, if anything, more consequential to get right.
The acronym was always a proxy for something else: a company’s ability to understand how it affects, and is affected by, the world it operates in. That capability doesn’t need a three-letter name to matter. It needs data leaders can trust and a way to act on it before the next heatwave, wildfire, or supply disruption turns into a line on next quarter’s earnings call.
About the author:
Rajiv Jalim is the Global Director of Sustainability Solutions at Novisto, where he works at the intersection of sustainability and technology to help companies turn sustainability goals into practical strategies, stronger data practices and measurable action.
With over a decade of experience in sustainability consulting, strategy and program management, Rajiv has worked with organizations across biotechnology, energy, agriculture, manufacturing, transportation and healthcare. He has advised clients around the world on sustainable development, climate action and sustainability strategy, with experience spanning Europe, Asia, the Middle East and North America.
