ESG in Crisis? Did the Traditional Model Fail?

In recent years, ESG has emerged as a transformative promise to align businesses with positive impact. But what started as a quiet revolution in the corporate world now faces a wave of resistance: the anti-ESG era.

And this raises an important question: why did this happen?

Even more crucial is asking ourselves: how can we move forward in a practical and relevant way?

Traditional ESG and Its Challenges

ESG emerged as a response to the growing demand for more responsible business practices. Investors, consumers, and governments began demanding that companies consider not only profit but also their impact on the environment, society, and corporate governance.

However, the current ESG model faces challenges that cannot be ignored:

  • Lack of Standardized Metrics: The absence of universal standards to measure ESG performance has created a confusing landscape full of inconsistent metrics. This makes it difficult to compare the real impact of companies, generating uncertainty about the effectiveness of ESG practices.
  • Greenwashing and Performativism: Many companies adopted ESG solely to meet market expectations, using inspiring advertising campaigns that are empty of concrete actions. This has resulted in distrust among investors and consumers.
  • Insufficient Results: Despite the growth in ESG investments, superficial practices without clear results have raised doubts about the effectiveness of the traditional model.
  • Political Polarization: ESG has become a polarizing topic, with conservative critics accusing companies of prioritizing progressive agendas over profit.

The Problems Persist

Despite the criticisms, the problems that ESG seeks to solve continue to grow. Climate change, biodiversity loss, social inequality, and corruption are urgent challenges.

  • 2024 was the first year the global average temperature reached 1.6ºC above pre-industrial levels, surpassing the critical 1.5ºC threshold set by the Paris Agreement.
  • Climate instability is already reflected in food prices; coffee, oranges, and olive oil are some of the main examples. According to a study published in the journal Nature, climate events could generate inflation that raises food prices by up to 3% a year until 2035.
  • In 2024, Brazil recorded its worst historical position on the Corruption Perceptions Index (CPI), compiled by Transparency International.
  • Inequality remains at high levels: the richest 1% have an average monthly per capita income 31.2 times higher than the poorest 50%. In 2022, it was 30.8 times.

This data shows that the problems ESG sets out to combat continue to grow, along with the increasing urgency for solutions. New environmental and social regulations tend to emerge with increasingly stricter criteria. Organizations that position themselves now avoid risks such as loss of credibility, competitive disadvantage, and high future expenses.

ESG and Sustainability seek to meet the needs of the present while ensuring natural resources and human progress for the future.

Our Positioning

At We.Flow, we recognize that ESG, as traditionally presented, faces real challenges. But we believe that, regardless of the name given to it, what matters is the essence of the movement: building a sustainable future.

Furthermore, data proves the benefits of ESG:

  • Companies with greater gender diversity in executive roles are 25% more likely to have above-average profitability (McKinsey).
  • Good ESG practices lead to better long-term financial performance (Harvard Business Review).
  • 85% of global investors consider ESG criteria in their decision-making (Morgan Stanley).

Therefore, we are committed to doing things differently, focusing on real impact and concrete results.

  • Focus on Concrete Results: Our focus is on concrete actions that generate real impact, with clear and transparent metrics to measure progress. It is not just about talking about sustainability, but living it in day-to-day business, transforming impact into culture.
  • Integration with Business Strategy: ESG is not a separate department, but a strategic pillar of the business. Aligning sustainable practices with market objectives demonstrates that it is possible to generate value for shareholders, employees, and society all at the same time.
  • Humanized Approach: ESG is about people and must have a humanized approach, focused on creating real connections and generating value for everyone involved.

Conclusion

The anti-ESG era challenges us to rethink and evolve, but not to abandon the fundamental principles that shape a sustainable future. Despite the criticisms and obstacles, the challenges ESG seeks to address—such as climate change, inequality, and corruption—continue to grow in urgency.

The answer is not to give up, but to transform.

At We.Flow, we believe that ESG must go beyond inconsistent metrics or empty speeches. It is time to prioritize concrete actions, measurable results, and the integration of sustainability into business strategies. Companies that embrace this approach mitigate future risks and create lasting value for society and themselves.

The future requires courage to innovate and commitment to act.

ESG is an essential path to align positive impact with sustainable growth. We can transform challenges into opportunities and build a legacy that inspires trust and generates real impact.

Picture of Raissa Santos

Raissa Santos

Professional with experience in NGOs and private companies, working mainly with Social and Environmental Project Management, Corporate Social Responsibility, Management of Financial/Administrative Processes and International Certifications, such as the B Corp certification. Raissa is co-founder and Administrative Director of the social organization Kurytiba Metropole, which works directly with Sustainable Development and Quality of Life, Participatory and Inclusive Democracy and Equity and Social Justice. As a highlight initiative we have the Map of Inequalities of Curitiba and the metropolitan region, which is being carried out in partnership with the Federal University of Paraná – UFPR. She has a specialization in Entrepreneurship and Social Business (FAE Business School) and a degree in Financial Management (Opet University). It is certified in Sustainability Reporting based on the GRI Sustainability Reporting Standards (GRI Professional Certification Program) and in PMD Pro – Project Management for Development Professionals (APMG International).

Check out other content on our blog:

Scroll to Top