Download: Talking Sustainability: A Complicated Conversation
In sustainability, language isn’t just for communication—it’s a sticking point influencing perceptions and actions. We’re right in the midst of an evolution as businesses seek the most effective terminology to articulate their approach, commitments, and progress.
The Shifting Landscape of Sustainability Terminology
The current landscape keeps shifting under our feet, but there are signs of stability – and very few indications that companies and investors are slowing down sustainability initiatives.
Recent trends in terminology show:
ESG: there’s been a 9% drop in media mentions and searches, but sentiment is trending more positive than in late 2023. Has the public campaign against ESG run its course?
CSR: This term is making a comeback, with overwhelmingly positive media sentiment and increasing search trends from April 2023 to April 2024.
Responsible Business: A new entry, this phrase is gaining traction and slowly entering mainstream discourse, with rising media coverage and search volume.
Divergent approaches from the EU to U.S.
A major hurdle to unified language is the wide gap in understanding between Europe and the U.S.
The lack of a central governing body for sustainability in the U.S. leaves corporate reporting and sustainable investing without clear, universally accepted standards, unlike in Europe, where regulations like the Non-Financial Reporting Directive (NFRD) and the Corporate Sustainability Reporting Directive (CSRD) mandate detailed sustainability disclosures.
This divergence affects global business operations and efforts to standardize reporting, crucial for addressing climate change. As a result, many U.S. companies, especially those doing business in the EU, follow European best practices by default.
Market Dynamics
Public markets have seen a shift in ESG leadership. BlackRock, once a leader, appears to be stepping back amid scrutiny, leaving room for other asset managers, particularly boutique firms and European managers with strong regulatory frameworks.
Private equity and venture capital firms, meanwhile, are doubling down on ESG strategies. They recognize that sustainability often leads to innovation, efficiency, and long-term profitability. Institutional investors’ demand for ESG compliance further drives this commitment.
Looking Ahead
There will be more disruption as companies and investors struggle to find terms that resonate across different markets and stakeholders. That makes clear and coherent communication crucial. Companies and investors must choose their words carefully to ensure transparency, accountability, and understanding among varied audiences.
This summary hardly scratches the surface in this multifaceted landscape. Take a deeper dive and download the paper, Talking Sustainability: A Complicated Conversation.
