What ESG Really Means for Business—and Why the Global Economy Is Still Betting on It

If the last few years have taught us anything, it’s that capitalism is evolving—not abandoning profits, but expanding the definition of what a successful business looks like. The shorthand for that evolution is ESG: Environmental, Social, and Governance. But ESG is more than a corporate buzzword or a checkbox on an investor’s scorecard. It’s a signal of what the future economy values: resilience, transparency, sustainability—and increasingly, survival.

At its best, ESG is a framework for asking: What kind of world is our business helping to build? And are we building one we want to live in?

ESG: What It Is—and Why It’s a Battleground

Let’s start with definitions. ESG breaks down like this:

• Environmental — How a business affects the natural world. Think emissions, energy use, climate risk, waste management.
• Social — How it treats people. That includes labor practices, equity, community impact, and customer protections.
• Governance — How decisions are made and power is wielded: board oversight, ethics, accountability, transparency.

This isn’t new. What is new is that ESG is being taken seriously—not just by progressives, but by markets. According to Morningstar, ESG or sustainable fund assets reached $3.5 trillion globally in June 2025,¹ and are projected to reach $50 trillion by 2025—a third of all assets under management.²

ESG is experiencing a backlash but there is global economic momentum with increasing investment in sustainable fund assets.

But here’s the paradox: as ESG goes mainstream, it’s also become a target, or the new four-letter word – and its impact is most apparent in the U.S. This backlash against what has been called “woke capitalism,” has resulted in a slow-down in ESG commitments for U.S. asset managers, who have adopted a more cautious approach. U.S.-domiciled funds have also been bleeding money for the first two quarters of 2025.

What this all means is that the current administration’s stance towards renewables runs counter to the global economic momentum, and is having real impact on investment in solar and wind.

Europe and China, by contrast, are doubling down. The European Union’s Corporate Sustainability Reporting Directive (CSRD) is making ESG disclosures mandatory for large companies with reporting to start in 2027-8.³

China, for its part, installed more solar in 2023 than the entire world did in 2022, according to the IEA. In 2024, China met its 2030 wind and solar capacity target, six years ahead of schedule, but now is investing in infrastructure to distribute that power effectively.⁴ ESG isn't just a political debate—it’s an international arms race for clean tech dominance.

Why ESG Still Matters—Even Amid Backlash

Critics argue ESG distracts from core business goals. But increasingly, it's becoming clear: ESG is a core business goal, and is essential to effective risk management.

The markets don't lie - purpose and clarity is being rewarded. 

Here’s why:

• Capital flows toward clarity. Investors are using ESG to assess long-term risk. The GRESB benchmark—used by institutional investors to assess the ESG performance of infrastructure and real assets—has become an essential tool.  A strong GRESB score signals not just environmental responsibility, but operational excellence.
• Regulators are catching up (mostly).
  • The Security and Exchange Commission (SEC) has adopted rules on climate-related disclosures as of spring 2024,⁵ but has been under litigation since then. The situation is further complicated by the U.S.’s current administration’s stance against renewables. SEC is no longer defending the climate-related disclosures in court, leaving that to a coalition of Democrat-led states – they initially signed on as intervenors alongside the SEC, but now are the sole defenders. ⁶
  • At a state level, the picture is much more varied. California just passed sweeping climate disclosure laws for large companies. Several other states soon followed suite with their own climate disclosure proposals being introduced.⁷ ESG isn’t optional; it’s becoming law.
• Markets reward purpose. According to a 2023 McKinsey report, companies with high ESG ratings consistently outperform peers on key financial metrics over time. ESG may not drive quarterly gains—but it protects against long-term losses.⁸

Clean Energy Is the ESG Fast Track

If you’re a company trying to improve ESG performance, clean energy is low-hanging fruit with high-impact outcomes. And among the options, community solar stands out for its simplicity, equity, and scalability.

At PureSky Energy, we help businesses, institutions, and everyday consumers subscribe to local solar projects—no panels required, no upfront cost. This matters because:

• It cuts carbon emissions—a direct line to environmental performance.
• It creates local jobs and tax revenue, strengthening the social fabric.
• It offers equitable access to clean energy—especially important in communities historically excluded from solar ownership.
• It improves GRESB and sustainability scores, helping institutional partners meet disclosure requirements and stakeholder expectations.

ESG Is Not a Trend. It's a Threshold.

We’re not talking about a passing phase. ESG is fast becoming the baseline for participating in the global economy. Companies that embrace ESG are better positioned to attract capital, talent, and trust. Those that ignore it? They risk becoming obsolete.

Which brings us back to Trump.

You can reject ESG as ideology. But markets don’t care about ideology—they care about risk. And climate, social inequality, and governance failures are risk. Betting against ESG is betting against the direction the world is moving—on policy, on capital, on public opinion.

How PureSky Can Help You Lead

At PureSky, we don’t just talk ESG—we deliver tangible pathways to meet your goals:

• Lower your emissions and energy costs.
• Improve your ESG scores and sustainability reports.
• Build brand credibility with customers and stakeholders.
• Do it all without the cost or complexity of rooftop or ground-mounted solar.

In a noisy world of shifting headlines and polarized politics, ESG remains a clear compass. It asks: Are you building a business that’s fit for the future?

If your answer is yes, let’s talk.

Resources

1. Morningstar (2025). https://www.morningstar.com/sustainable-investing/global-esg-fund-flows-rebound-q2-2025-despite-esg-backlash-geopolitical-uncertainty
2. Bloomberg (2024). (Mubadala) https://sponsored.bloomberg.com/article/mubadala/the-future-of-esg-Investing
3. European Commission. https://finance.ec.europa.eu/regulation-and-supervision/financial-services-legislation/implementing-and-delegated-acts/corporate-sustainability-reporting-directive_en
4. IEA (2025), World Energy Investment 2025, IEA, Paris https://www.iea.org/reports/world-energy-investment-2025, Licence: CC BY 4.0
5. U.S. Securities and Exchange Commission (2024). https://www.sec.gov/newsroom/press-releases/2024-31
6. Yahoo Finance (2025). https://finance.yahoo.com/news/sec-declines-confirm-whether-climate-102335053.html
7. Compliance & Risks (2025) https://www.complianceandrisks.com/blog/us-state-specific-climate-disclosure-regulatory-activities-in-2025/
8. McKinsey (2023). https://www.mckinsey.com/capabilities/strategy-and-corporate-finance/our-insights/the-triple-play-growth-profit-and-sustainability