Investing in ESG (environmental, social, and governance) projects cannot and should not be merely a marketing ploy to improve a company’s image or to “play nice” on social media. Likes and views don’t change the world. Nor do they sustain a reputation when there’s a lack of coherence between discourse and practice. True ESG requires intention, purpose, and a genuine commitment to positive impact.
It’s easy to fall into the temptation of launching a social media campaign with beautiful photos, inspiring speeches, and trendy hashtags. But what happens when the spotlight fades or a crisis hits? ESG can’t be about performance. It must be about consistency. It’s not about appearing responsible; it’s about being responsible even when no one is looking.
The consultancy firm Sustainalytics recently identified that 50% of companies with ESG targets lack internal governance consistent with their public commitments, which weakens the effectiveness and perception of these actions. Furthermore, according to a global survey by PwC, a network of auditing and consulting firms, 78% of investors say they may divest from shares in companies involved in greenwashing, reinforcing the importance of clear, auditable targets.
ESG washing, when companies use the acronym ESG merely as a marketing tool, without adopting concrete, structured practices, has become one of the greatest risks to the credibility of the sustainable agenda. When an organization publishes environmental, social, or governance campaigns merely to “appear responsible,” without actually acting coherently and in-depth, it contributes to the trivialization of the topic and reduces public and investor trust. These cosmetic actions, often accompanied by empty slogans and doctored reports, create a perception of opportunism. Rather than generating value, such practices weaken the company’s reputation and, more seriously, delegitimize the ESG movement as a whole. The public notices a disconnect between rhetoric and reality, and this can lead to boycotts, regulatory investigations, and a reputational crisis that is difficult to reverse.
The negative impact isn’t limited to the company committing the “washing.” When many organizations adopt this superficial approach, the entire market becomes infected with a kind of collective cynicism. Investors become more skeptical, regulators tighten their requirements, and consumers become disillusioned with sustainability promises. The result is that companies that work seriously and invest in structural changes end up being lumped together with those that merely advertise. This confusion affects access to sustainable capital, reduces civil society engagement, and delays important advances. In other words, ESG washing isn’t just ineffective; it’s a hindrance disguised as progress.
More than that, every ESG investment needs to be planned based on the company’s level of maturity. There’s no point in copying ready-made models or importing standards that don’t fit the business’s reality. We’ve seen a lot of “off-the-shelf ESG” in the market. What works for a multinational may be unsustainable for a mid-sized company, and so on.
Furthermore, the available budget and the external context, such as the economic climate, political stability, and regulatory requirements, must also be considered. ESG doesn’t live in a bubble. It lives in the real world, with its complexities, risks, and opportunities. Therefore, a sense of realism is essential in the ESG journey.
The ESG market has suffered setbacks, primarily originating in the United States. Upon Donald Trump’s re-election to the presidency on January 20, 2025, an executive order was immediately signed withdrawing the US from the Paris Agreement. Furthermore, there was an accelerated dismantling of environmental regulations, including cuts to agencies, reduced monitoring of greenhouse gas emissions, omission of the words “climate science” from official websites, and easier approval of fossil fuel projects on public lands. This legislative and institutional reversal ushered in the so-called “greenhushing” movement, where companies continue with sustainable investments but avoid labeling them as ESG or “green” to minimize political risk and negative repercussions.
On the economic front, the Trump administration implemented broad tariffs, with imports subject to average duties of up to 15%, which disrupted global supply chains, raised input costs, and generated widespread uncertainty. The resulting crisis triggered a global market crash in April 2025, directly impacting companies committed to clean energy and transforming sustainable projects into higher-risk investments.
In the social and governance field, the so-called S and G of ESG, there have been significant setbacks. Federal Diversity, Equity, and Inclusion (DEI) programs were eliminated by executive orders, and the Department of Labor proposed rules to prevent retirement plans from considering ESG factors as a standard or demonstrating differentiated financial impact. The combination of a hostile political environment, legislative obstruction, and a volatile economic climate has reduced the appetite of companies and investors for responsible initiatives. Even as Europe and parts of Asia maintain the pace of the sustainability transition, the US has weakened its global leadership role in ESG, fragmenting standards and making the sustainability market more complex and polarized.
So, before you post, plan. Before you promise, align with your strategy. ESG that transforms doesn’t start with marketing; it starts with governance. Intentionality, transparency, and ethics are the best allies for ESG programs.
