In boardrooms, courtrooms, and political chambers alike, ESG isn’t just a slogan anymore—it’s a front line. What began as a movement to align business with sustainability goals has morphed into a contested ideological, legal and strategic terrain.

Today, ESG has become a corporate battleground, reshaped by backlash, regulatory pressure, internal tensions, and strategic recalibration.

From Faith to Friction: Why ESG Is Under Attack

Back in the early 2010s, ESG was seen as the enlightened choice—responsible investing, purposive business, reputational strength.

But over the last few years, especially in the U.S., ESG has become an ideological lightning rod. Critics (mostly on the political right) now frame it as “woke capitalism,” a vehicle for progressive agendas rather than sound corporate policy.

In 2025 alone, 106 anti-ESG bills were introduced in U.S. state legislatures, of which 11 passed in watered-down form.

That pushback is influencing corporate behavior. A recent survey from The Conference Board found that 80% of sustainability executives are actively reworking ESG strategies in response to changes in regulation and public sentiment. More than half say they are even moving away from the term “ESG” altogether.

In parallel, some firms are retreating from public sustainability commitment. BNP Paribas, for instance, is pivoting toward “profitable sustainable finance,” warning that ESG deals must generate returns—otherwise, the label may lose its credibility.

Proxy Fights, Activists & Greenwashing Duels

One of the arenas where ESG battles play out most visibly is shareholder activism. In 2025, proxy fights still occur, but investors are choosing their targets more cautiously.

Meanwhile, ESG-themed shareholder resolutions have seen plummeting support: median backing fell to ~12% in 2025, down from 19% just a year ago.

A prominent case in Australia saw the securities regulator (ASIC) take action against an “ESG” fund accused of investing in fossil-fuel companies while claiming ethical credentials.

These disputes aren’t just financial — they are moral and reputational. Allegations of “greenwashing,” “crosswashing” (a strategy where companies boost ESG scores superficially) and narrative contradictions between public posture and internal practices are all increasing risk for boards.

The Internal Struggle: Governance, Narrative & Culture

Inside organizations, ESG is becoming a zone of internal tension. Teams that once proudly spearheaded climate or DEI issues are being dismantled or restructured.

Burberry recently eliminated its head of diversity role, claiming it would distribute responsibilities across leadership lines instead. British electronics retailer Currys dissolved its board-level ESG committee altogether.

Part of this is reactionary, part tactical. Boards are wary of reputational risk, legal liability, and political backlash. The concept of “narrative contradiction” is gaining traction — when a company’s public ESG narrative conflicts with its operations, that gap itself becomes a governance red flag.

Yet for many companies, ESG remains existential: how to embed it without being vulnerable to attack, how to communicate it without overpromising, and how to govern it without ceding decision rights.

The Way Forward: Adaptation, Clarity & Resilience

So how do companies survive this new fight zone?

1. Rebrand with purpose. John Kerry recently proposed ESG be repackaged as “Efficiency, Security & Growth,” urging investors to focus on real economic impact over moral posturing.

2. Avoid public sabre-rattling; practice greenhushing. Many firms are quietly maintaining sustainability efforts while minimizing the use of loaded labels.

3. Strengthen narrative alignment. Boards and communications teams need to ensure external commitments match internal reality, or risk narrative contradictions being used against them.

4. Invest in disclosures & data integrity. Regulators and investors are tightening scrutiny. For example, an LLM-based tool, “ESGReveal,” is being used to parse corporate reports — allowing stakeholders to spot inconsistencies.

5. Lean into resilience, not perfection. ESG will never be flawless. It’s better to adopt adaptive frameworks that can evolve with shifting regulation, politics, and stakeholder demands.

Final Thought

Yes — ESG has become a corporate battleground. But every battle zone generates new strategies, alliances, and lessons. Companies that survive — or even win — will be those that don’t merely adopt ESG, but design it for conflict: principled, clear, defensible, and resilient.