I was reading a WSJ article this morning titled “The Latest Dirty Word in Corporate America: ESG“. The gist of the article is that the once widely used acronym is falling in favor. Executives who want to continue these initiatives now do it with “rebranded” teams. These teams and committees avoid the term “ESG” altogether.

As the article highlights: “Some companies, including Coca-Cola, are rebranding corporate reports and committees, stripping ESG from titles. Advisers are coaching executives on alternative ways to describe their efforts, proposing new terms like “responsible business.” The article suggests that ESG-focused investment funds are also dying.

One of the reasons cited in the article behind this “loss of interest” resonates. As per the article: “In lieu of lofty pronouncements, advisers are telling CEOs to be more precise and to set goals that can be achieved.” The keyword there is “lofty”.

From the beginning, ESG has been imposed as a responsibility that organizations should take ownership of, in addition to generating profits. ESG initiatives are primarily seen as conflicting with the core interest of generating profits for businesses and shareholders. And that is where things became “lofty.” When you define these responsibilities qualitatively, they seem more like an additional burden that shifts resources away from the core operating strategies. The fact is, that is not always the case.

I have written articles like this one about leveraging AI for sustainability initiatives. In some of my articles, I have highlighted how ESG initiatives like carbon footprint reduction are not separate from initiatives like reducing supply chain costs. Then, there are some goals the article believes are difficult to quantify, as the article mentions: “Adding to the challenges for companies is that some dimensions of ESG, particularly the social goals, can be difficult to quantify.” The fact is that whether it is corporate diversity initiatives or reaching out to market segments that did not have access to your products or services, you can quantify all of these in terms of increased revenue, profitability, productivity, etc.

The situation organizations are in is not because many ESG goals can not be quantified. It is because we have not been creative enough to quantify them. Most ESG goals can be quantified and tied directly to core goals like productivity, efficiency, revenue, and profitability. There will always be some that fall in the grey area. For example, manufacturing in China and then getting goods in the U.S. will always have a bigger carbon footprint than manufacturing domestically. And while you can reduce that footprint by optimizing orders and shipments, you can not always move all manufacturing to the U.S.

While a decade ago, capturing the data to translate these “lofty” goals into quantifiable benefits may have been a challenge, the good news is that it is entirely feasible now for most ESG goals. Maybe what is “lofty” is the advice being given to the companies on how to turn these goals into objectives that can make it attractive for all stakeholders and shareholders.