Published by Hani Mebar | Äctvli Responsible Consulting
Have you ever felt like most ESG programs are built backwards?
I mean, a company decides it needs an ESG strategy — usually because a large client asked for it, or because CSRD reporting requirements are coming, or because the board saw a competitor doing it. So they appoint an employee, or commission an FTE, or hire a consultant, tp produce a report, publish it on the website, and consider the job done.
Six months later, little has changed operationally. Nobody reads the report. The targets in it were set without any connection to how the business actually operates. The people who were supposed to implement it were never really involved – and probably had much more on their plates. And when the next reporting cycle comes around, the person hired or delegated, or consultant, is required again to produce another report that also achieves nothing.
This is this ESG “theatre” I harp on about — and it’s more common than most organisations would like to admit.
Why ESG Gets Treated as a Compliance Exercise
Most ESG frameworks are designed by people who care deeply about disclosure and very little about implementation. They can be akin to activists with a rosy picture of how the world should run with no concept of reality.
GRI, CSRD, SASB, TCFD — these are reporting frameworks. They tell you what to measure and disclose. They don’t tell you how to make your business more sustainable, more ethical, or more resilient. That’s a separate question, and to some it might be the more important one.
When organisations treat ESG as a reporting exercise, they end up optimising for the report rather than the reality. They find metrics they can easily measure and report on, rather than metrics that reflect what’s actually happening. They make commitments that sound credible on paper but have no operational pathway behind them.
So they end up with a program that consumes significant time and money and produces nothing of lasting value — except, potentially, the risk of reputational damage when the gap between what’s reported and what’s true becomes visible. Or.. no one really cares and it just slips under the radar but at least it ensure the company is still operating and paying their employees.
What It Means to Make ESG Work
ESG that works looks like this: the decisions your organisation makes every day — about suppliers, products, operations, people — are informed by the same values and priorities that appear in your ESG report.
The report is just a description of reality, not a construction of it.
To get there, you need three things in place:
1. Materiality (yes, like actual material)
In case you haven’t heard of it, double materiality — the “CSRD requirement to assess both the impact your business has on ESG factors and the impact ESG factors have on your business”, is genuinely useful if done properly.
The question is: which ESG topics are actually significant for your specific business, in your specific sector, with your specific supply chain? The answer is not the same for a Finnish electronics manufacturer and a Helsinki-based HR platform.
Most companies either do this assessment superficially (ticking a box) or skip it entirely and just copy a competitor’s materiality matrix. Neither gives you the clarity you need to prioritise.
A real materiality assessment involves your customers, suppliers, employees, and investors — not just your sustainability team working through a spreadsheet. It produces a short list of things that genuinely matter, which is the foundation for everything else.
2. Integration, not isolation
ESG cannot sit in a separate department that produces reports and runs awareness campaigns. For ESG to affect anything, it has to be embedded in the functions that make decisions.
That means procurement has supplier sustainability criteria and actually uses them. Operations has energy and waste reduction targets that appear in the same conversations as cost reduction targets. HR connects ESG values to how the company hires, evaluates, and develops people.
This integration is hard. It requires changing how existing processes work, not adding new processes alongside them. It requires people who don’t think of themselves as “ESG people” to care about ESG outcomes. It requires leadership that takes it seriously enough to hold people accountable.
None of that comes from publishing a report.
3. Targets with owners
Every meaningful ESG commitment needs a person who owns it, a timeline, a measurement method, and a consequence if it’s not met.
“Reduce Scope 1 and 2 emissions by 40% by 2030” is a commitment. Without an operational roadmap, a named owner, annual milestones, and integration into business planning, it’s a sentence in a PDF.
The organisations that make real ESG progress are the ones that treat sustainability targets with the same rigour they apply to financial targets. They review them quarterly. They discuss them in management meetings. They tie them to compensation where it makes sense. They course-correct when they’re off track, in public if necessary.
Is there a business case for eSG?
The argument that ESG creates business value is a dicey one. There certainly can be value but it’s conditional and I think it really varies depending on the industry.
If done properly, ESG:
- Reduces regulatory and reputational risk
- Improves supply chain resilience (sustainable suppliers tend to be more stable suppliers)
- Strengthens employee retention and recruitment, particularly for younger talent
- Opens doors to customers and contracts that require demonstrated ESG performance
- Reduces long-term operational costs through energy efficiency and waste reduction
Done as a compliance exercise, ESG creates none of these benefits. It creates the costs without the returns.. and lots of cool dashboards and reports. (I like dashboard, they are NOT dead)
The difference is whether the people who run the business have genuinely decided that ESG outcomes matter, and have built systems to pursue them.
A Practical Starting Point
If your current ESG program is more report than reality, here’s where to begin:
Audit the gap. Compare what your last ESG report says you’re doing with what’s actually happening operationally. Be honest. The gap is the work.
Redo materiality. If your materiality assessment was done by a consultant in two weeks without talking to your customers or supply chain, do it again properly. Your priority list will probably look different.
Pick three things. Organisations that try to act on 40 ESG priorities act on none of them. Pick three that are material, operational, and achievable in 18 months. Assign owners. Build plans. Start.
Build governance. Decide who is responsible for ESG performance at executive level. Put it on the board agenda at least twice a year. Make it a real agenda item, not a presentation slot.
So what are we saying
ESG compliance is the floor; the base. The directive, the framework, the disclosure requirement — these tell you the minimum. The business case for going further is real, but only if the further work is real.
The companies that will build durable ESG advantage over the next decade (assuming ESG remains a thing) are the ones treating it as an operational challenge, not a communications exercise. That requires different skills, different ownership, and a different mindset than producing an annual sustainability report.
It’s harder. It’s also the only version that actually works.
Äctvli Vigilantia is our sustainability and ESG advisory service. We help organisations move from ESG reporting to ESG integration — building frameworks that drive real operational change and prepare you for CSRD and beyond. Get in touch to talk through where your program stands.