ESG—the use of environmental, social, and governance factors to analyze a company—has received a great deal of backlash recently. Thanks to the controversy, companies have walked back their use of the term. McDonalds, for instance, removed instances of the acronym from their website in August. Yet sustainability continues to remain prominent among major companies. Instead of openly promoting ESG and committing to sustainability, “greenhushing” may be on the rise.

Greenhushing refers to downplaying corporate commitments to sustainability. A recent survey from Bloomberg provides evidence in support of the idea that greenhushing is the new norm. According to the survey, 67% of respondents who identified themselves as engaged in ESG agreed that “firms will stop saying ‘ESG’ but continue doing it”. Indeed, only 18% of respondents who identified themselves as engaged in ESG believed the backlash to ESG would be an obstacle to considering climate in business.

Furthermore, according to a 2023 report by Pleiades Strategies, many anti-ESG measures meant to encode opposition into policy or law have failed. 165 bills and resolutions were introduced across the United States. However, as of the most recent update, only 20 bills have become law, and only 6 resolutions have been passed. A majority of 83 anti-ESG initiatives have failed. In fact, 85% of anti-ESG initiatives have failed to pass thus far, either due to failing or simply stalling in the legislative process.

So what’s keeping sustainable business prominent? One factor is the Inflation Reduction Act. Originally passed in 2022, the law helps drive private sector investment into sustainability. However, on top of that, interest remains high among businesses themselves. Sustainability can bring many benefits. For instance, businesses can target an audience interested in sustainably-made products, streamline manufacturing processes and decrease the amount of resources they use, and manage risk, both to the climate and their reputations. Indeed, a June survey of Fortune 500 CEOs shows that most are aware of the benefits of “focusing on climate”. 77% of respondents agreed that it would “better engage our employees”, 61% that it would “strengthen our bond with customers”, 59% of businesses that it would “open up new markets”, and 51% that it would “improve relations with shareholders”. This is compared to the mere 12% of respondents who felt that a focus on climate would “have no business benefit to us”.

The future of sustainable business looks bright. The continued interest among business leaders is a good sign, but new regulations will support these efforts. In early 2023, the European Union finalized the Corporate Sustainability Reporting Directive (CSRD), a new set of ESG reporting requirements that will affect not only EU companies but non-EU companies with a certain level of business involvement in the EU. CSRD reporting will be phased in starting January 1st, 2024. Additionally, SB 253, a California climate disclosure law, was signed by Governor Gavin Newsom this September. The bill had been supported by major companies by Apple. Under this law, over 5,000 companies who operate in California and earn over $1 billion in revenue will have to report greenhouse gas emissions. This includes not only direct emissions from sources owned or controlled by the companies involved, but also indirect emissions, such as those from the generation of purchased electricity.

That said, the potential of further anti-ESG legislation could endanger businesses. Although most have not succeeded, 42 of the initiatives that failed will be automatically reintroduced in 2024, and new bills could always be introduced.

However, sustainability still has a lot of room to grow, especially considering how popular it is among student business leaders. Several schools have added sustainability-centered programs. Take Wharton Business School, for instance. Although it has existing programs like Business, Energy, Environment and Sustainability, it’s recently introduced new MBA and undergraduate programs in Environmental, Social and Governance Factors for Business. Leaders at Wharton suggest that this expansion is due to existing demand for coursework in these areas.