The Declining Use of 'ESG' in Corporate Reporting Amidst Challenges in Sustainability Efforts
In 2025, the landscape of corporate reporting in the United States is undergoing a noticeable shift. Last year, only 25% of large companies incorporated 'ESG' into their sustainability report titles, a drastic decrease from 40% in 2023. The downward trend illustrates a growing complexity in sustainability communications as corporations face increased scrutiny and backlash concerning their environmental, social, and governance (ESG) practices. Autonomy over sustainability reporting is critical for these organizations as they seek to maintain credibility with their stakeholders while navigating emerging regulations.
Recent research conducted by The Conference Board unveiled these findings on April 28, 2025, highlighting that despite the declining mentions of 'ESG,' companies are continuing to uphold their commitments and strategies related to sustainability. Notably, a remarkable 87% of SP 500 firms reported having climate-related targets published in their 2024 public statements, mirroring the previous year’s figures. As Andrew Jones, a Principal Researcher at The Conference Board, noted, businesses are shifting their terminology towards less politically charged language, opting for terms like 'sustainability' and 'impact' instead.
The research, which draws insights from public disclosures and a series of surveys among sustainability executives across over 60 US and European companies, indicates that many organizations feel a sense of apprehension regarding sustainability reporting. In an examination of executives' sentiments, a mere 10% expressed increased optimism compared to the prior year. Conversely, 31% voiced heightened concern, with 34% remaining uncertain and 14% reporting feelings of being overwhelmed by the demands of reporting.
Interestingly, while 87% of SP 500 firms affirmed their dedication to climate goals, many have altered their target completion dates from the initially ambitious 2030 to a more conservative 2035. This adjustment suggests an acknowledgment of the complexities involved in achieving these goals, as only 13% of sustainability executives stated high confidence in accomplishing their publicly declared climate objectives. The factors contributing to this uncertainty include feasibility challenges, shifts in regulations, and the growing risks associated with litigation and perceived greenwashing.
The discussion around climate-related risks is gaining traction, as evidenced by the increase of disclosures concerning climate change as a risk factor. From 2021 to 2024, the proportion of companies acknowledging climate change risks surged from 30% to 56% among Russell 3000 companies and from 67% to 84% among SP 500 firms.
On the frontlines of green initiatives, firms have made tangible strides in reducing emissions categorized as 'scope 1' and 'scope 2.' Over the same timeframe, median reductions in 'scope 1' and 'scope 2' emissions among Russell 3000 companies reported a dramatic drop of 45% and 69%, respectively, while SP 500 companies noted decreases of 2% and 45%. Meanwhile, the issue of 'scope 3' emissions remains a challenge due to difficulties in measurement stemming from limited supplier data and inconsistent methodologies. Nevertheless, there’s an upward trend, with the share of firms disclosing 'scope 3' emissions rising from 21% to 35% for Russell 3000 and from 62% to 78% for SP 500 companies between 2021 and 2024.
The increasing transparency around 'scope 3' emissions is indicative of mounting regulatory pressures and growing stakeholder demand for comprehensive disclosures. This trajectory underscores the readiness for compliance with evolving regulatory mandates, signaling that organizations are acknowledging the reputational risks and operational challenges tied to their environmental impact.
The Conference Board emphasizes the importance for companies to proactively engage with their stakeholders, including investors and regulators, on how they define, measure, and adjust their climate targets as part of their sustainability commitments. Enhancing transparency in these discussions is essential for nurturing trust, alleviating legal risks, and sustaining credibility in an environment ripe with scrutiny. As the future unfolds, the trends in sustainability reporting will surely shape how corporations navigate the delicate balance between accountability and innovation in their environmental endeavors.
Recent research conducted by The Conference Board unveiled these findings on April 28, 2025, highlighting that despite the declining mentions of 'ESG,' companies are continuing to uphold their commitments and strategies related to sustainability. Notably, a remarkable 87% of SP 500 firms reported having climate-related targets published in their 2024 public statements, mirroring the previous year’s figures. As Andrew Jones, a Principal Researcher at The Conference Board, noted, businesses are shifting their terminology towards less politically charged language, opting for terms like 'sustainability' and 'impact' instead.
The research, which draws insights from public disclosures and a series of surveys among sustainability executives across over 60 US and European companies, indicates that many organizations feel a sense of apprehension regarding sustainability reporting. In an examination of executives' sentiments, a mere 10% expressed increased optimism compared to the prior year. Conversely, 31% voiced heightened concern, with 34% remaining uncertain and 14% reporting feelings of being overwhelmed by the demands of reporting.
Interestingly, while 87% of SP 500 firms affirmed their dedication to climate goals, many have altered their target completion dates from the initially ambitious 2030 to a more conservative 2035. This adjustment suggests an acknowledgment of the complexities involved in achieving these goals, as only 13% of sustainability executives stated high confidence in accomplishing their publicly declared climate objectives. The factors contributing to this uncertainty include feasibility challenges, shifts in regulations, and the growing risks associated with litigation and perceived greenwashing.
The discussion around climate-related risks is gaining traction, as evidenced by the increase of disclosures concerning climate change as a risk factor. From 2021 to 2024, the proportion of companies acknowledging climate change risks surged from 30% to 56% among Russell 3000 companies and from 67% to 84% among SP 500 firms.
On the frontlines of green initiatives, firms have made tangible strides in reducing emissions categorized as 'scope 1' and 'scope 2.' Over the same timeframe, median reductions in 'scope 1' and 'scope 2' emissions among Russell 3000 companies reported a dramatic drop of 45% and 69%, respectively, while SP 500 companies noted decreases of 2% and 45%. Meanwhile, the issue of 'scope 3' emissions remains a challenge due to difficulties in measurement stemming from limited supplier data and inconsistent methodologies. Nevertheless, there’s an upward trend, with the share of firms disclosing 'scope 3' emissions rising from 21% to 35% for Russell 3000 and from 62% to 78% for SP 500 companies between 2021 and 2024.
The increasing transparency around 'scope 3' emissions is indicative of mounting regulatory pressures and growing stakeholder demand for comprehensive disclosures. This trajectory underscores the readiness for compliance with evolving regulatory mandates, signaling that organizations are acknowledging the reputational risks and operational challenges tied to their environmental impact.
The Conference Board emphasizes the importance for companies to proactively engage with their stakeholders, including investors and regulators, on how they define, measure, and adjust their climate targets as part of their sustainability commitments. Enhancing transparency in these discussions is essential for nurturing trust, alleviating legal risks, and sustaining credibility in an environment ripe with scrutiny. As the future unfolds, the trends in sustainability reporting will surely shape how corporations navigate the delicate balance between accountability and innovation in their environmental endeavors.
Topics Policy & Public Interest）
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