Why is there a backlash against sustainability?
Expectations for sustainability in the corporate world are rising. At the same time, we are witnessing a surge in opposition. This change is ushering in a complex and contradictory era. Societies and businesses are struggling to strike the right balance between diverse and often conflicting goals. Yet, the problems we face are glaringly obvious:
- The world has not yet achieved the goals set by the Paris Climate Agreement. This agreement aims to limit global warming to 1.5 degrees Celsius. Even in the most optimistic scenario, the probability of reaching this target is calculated at just 14%.
- Economic inequalities are deepening. The poorest 50% of the global population controls only 8% of global wealth. Meanwhile, the richest hold half of it.
- Meanwhile, 57% of the global population agrees that “capitalism does more harm than good.” This is a clear sign of growing distrust in the current economic system.
It Was Time for Transformation—But Silence Fell Instead!
At a moment that urgently calls for solutions, governments are becoming entrenched in divergent policy paths, obstructing the necessary consensus. Business—an actor still seen by many as trustworthy—is also caught in a bind. Companies strive to lead with practices like Environmental, Social, and Governance (ESG). They also focus on Diversity, Equity, and Inclusion (DEI). Unfortunately, they are falling short of delivering results at the required scale, speed, or inclusivity.
At the same time, a well-organized and politically potent opposition is rapidly gaining momentum. Political movements opposing ESG—originating in the U.S. and now spreading to other countries—are pressuring companies to withdraw their sustainability commitments. In 2024, ESG funds saw net outflows of over $13 billion. Some companies are abandoning or scaling back their ESG and DEI efforts.
A striking global example is BlackRock. CEO Larry Fink’s annual letter to investors has long been scrutinized for its influential tone. Yet this year’s letter made no mention of DEI or ESG—despite BlackRock having once championed these very issues.
Corporate Leadership Is Confused
Regulatory frameworks around sustainability have surged 155% in the past decade. This transformation has turned the field into one of mandatory reporting and compliance. Laws targeting greenwashing are pushing companies toward a new behavior. This behavior is called greenhushing. It is the tendency to under-communicate or stay silent about sustainability efforts for fear of criticism.
This landscape has naturally led to deep confusion among CEOs and boardrooms. Chief Sustainability Officers are navigating an increasingly tense and uncertain terrain. When sustainability entered the mainstream during the pandemic, business leaders anticipated an evolutionary, voluntary shift. They initially approached sustainability as a tool for strategic PR and reputation management.
Today, however, new regulations and complex stakeholder expectations demand a transformation. It is far more comprehensive and deep-rooted than most companies are prepared for. Stakeholders now expect measurable, verifiable outcomes—alongside sustainability strategies fully integrated into core business planning.
We Stand at a Critical Crossroads
It’s fair to say that corporate perspectives on sustainability are evolving. Many business leaders acknowledge the long-term value sustainability can generate. Yet growing political pressures, economic headwinds, and regulatory burdens have left them uncertain about how to proceed.
As a result, many companies are choosing to keep their sustainability efforts below the public radar. Companies are quietly dropping the ESG acronym. They are de-emphasizing DEI initiatives. In some cases, they are questioning sustainability programs themselves. While European firms appear to be weathering this transition more calmly, the debates emerging from the U.S. are beginning to reverberate across the continent.
If companies can successfully manage their economic, environmental, and social goals amid this turbulence, they could unlock significant long-term opportunities. The current ambiguity is challenging. It makes it difficult for them to decide how deeply to commit to sustainability. They also struggle with determining in what ways to commit.
In Conclusion
This turbulent period in sustainability is not just one of crisis response. It is also a critical turning point. Companies can seize opportunities and invest in the future.
The question ahead is clear. Will sustainability become a true vehicle for transformation? Or will it stay just an unwanted and costly obligation?
The answer will shape the world of tomorrow.
This article was written by the author for the newspaper ‘Nasıl Bir Ekonomi’