ESG IS NOT DISAPPEARING, ONLY TRANSFORMING
ESG has been one of the most frequently used buzzwords in corporate and investment circles in recent years. Today, however, it seems to be quietly fading from public discourse. What once appeared as an indispensable element of conferences, presentations, and strategies is now mentioned less and less—at least in this form. This shift does not mean that the underlying substance is losing relevance. Quite the opposite. ESG may be becoming truly decisive only now – we are simply replacing an overused acronym with content that carries real value.
A telling development is that the world’s largest asset manager, BlackRock, is deliberately moving away from using the term. The focus of communication has shifted toward concepts such as resilience and long-term value creation. This is not an ideological turn, but rather a pragmatic correction. Over the past few years, ESG has become overloaded: it has simultaneously functioned as a regulatory framework, a marketing label, and a subject of political debate. Over time, it has become increasingly difficult to define exactly what different stakeholders mean by it.
This shift is visible not only in corporate communication but also at the regulatory level. One of the main drivers behind the rise of ESG has been the European Commission, which introduced increasingly stringent reporting requirements. The goal was to enhance transparency, but in practice, this often resulted in reports consisting of hundreds of data points that were difficult to interpret. It is no coincidence that Brussels is now moving toward simplification. The emphasis is on rationalization – expecting more meaningful information from fewer data points. This reflects an important realization: excessive administration not only fails to support sustainability goals but can actively hinder them. When numbers alone become the focus, they can be rigged – as has happened in numerous cases, including well-known practices in the automotive industry.
While the language surrounding ESG is changing, its logic is becoming more tangible in corporate operations. As long as sustainability is not directly linked to business interests, it tends to remain theoretical – but this is increasingly rare. In the financial sector, for example, climate change is now treated as a concrete risk, and financing is more frequently tied to specific conditions. Institutions such as the European Bank for Reconstruction and Development set clear expectations: if a project does not meet certain sustainability criteria, it simply does not receive funding. From this perspective, ESG is no longer a communication tool but a business reality. It is also increasingly clear that a company’s evaluation depends not only on financial performance but also on factors such as transparency in corporate governance and equal opportunity policies. These elements now play a significant role in shaping corporate reputation.
Among more advanced companies, the direction of this transformation is already evident. ESG no longer appears as a standalone project but is gradually embedded into daily operations. Sustainability is being integrated into strategy, supplier practices, and everyday business decisions. The examples of Magyar Telekom, IKEA, and Unilever show that these considerations are less and less treated as separate labels and more as integrated operational principles. This is the point at which the ESG label loses its significance – simply because it is becoming a natural, taken-for-granted practice.
At the same time, new terms are emerging, such as resilience, adaptation, and impact-driven operations. These are partly communication reframings, but they also signal a genuine shift in mindset. The focus is moving away from regulatory compliance and toward operational viability – whether a company can adapt to rapidly changing economic and environmental conditions.
All of this suggests that ESG is not disappearing, only transforming. More precisely, it is becoming invisible. It is being embedded into decisions, strategy, and operations. The real question today is no longer whether a company engages with ESG, but how well it does so – even if it no longer uses that label. In this new environment, competitive advantage will not go to those who produce the most extensive reports, but to those who can adapt the fastest and most effectively.
ESG may eventually fade from our vocabulary. However, the logic behind it is becoming unavoidable and is increasingly forming an integral part of corporate reputation. Leading companies already measure this reputation on a regular basis, which helps guide day-to-day adjustments. The emphasis is shifting from dry, numbers-heavy reports to real corporate values – those on which stakeholders ultimately pass judgment. This is why reputation assessment and monitoring models are gaining importance. They provide continuous feedback to companies on how well their business conduct aligns with the rapidly evolving expectations of stakeholders.