This is a distillation of our latest thinking into a cohesive narrative on why ESG has faltered, how it was partly self-inflicted, and why true sustainability—anchored in long-term value and resilience—must now evolve into an anti-fragile strategy that turns challenges into opportunities.

Contents

  1. A political shift
  2. ESG’s downfall was partially self-inflicted
  3. The weaponisation of ESG
  4. The corporate retreat from ESG
  5. The Sustainability Hype Cycle
  6. Sustainability as anti-fragile strategy
  7. Sustainability as long-term value and resilience
  8. The eight benefits of long-term value and resilience
  9. Conclusion

A political shift

  • Trump’s return reflects a global realignment of political and cultural values.
  • ESG has been weaponised in the culture wars.
  • What does this mean for sustainability moving forward?

Trump’s return isn’t an isolated event. It symbolises a broader political momentum across liberal democracies favouring personal freedoms and economic gains over collective notions of equality.

This shift raises a fundamental question: What does it mean for sustainability moving forward? Already, we’ve watched ESG become a lightning rod in the American culture wars—weaponised by politicians, attacked by fossil fuel interests, and quietly dropped by businesses wary of reputational risk.

ESG’s downfall was partially self-inflicted

  • ESG became fragile due to misaligned incentives.
  • It drifted from its core mission of responsible value creation.
  • The backlash was inevitable.

Even before ESG was politicised, it was losing credibility through the bad faith and misaligned incentives of its own advocates.

  • Ratings agencies profited by turning ESG scores into a pay-to-play racket.
  • Consultancies greenwashed for fossil fuel giants, slowing the transition while preaching ‘purpose’ at every opportunity.
  • Corporate sustainability teams pretended win-win outcomes were always possible, ignoring the reality of financial and ethical trade-offs.
  • And boards and management resorted to virtue signalling, championing social causes with little relevance to their business, while grossly misjudging public sentiment.

The result? ESG drifted from its core mission—responsible value creation—into a parody of itself. It was only a matter of time before the backlash hit.

The weaponisation of ESG

  • Republicans reframed ESG as woke capitalism.
  • Fossil fuel interests seized the moment to roll back climate initiatives.
  • The backlash became global, driven by American soft power.

Sensing an opportunity, the Republican Party identified a new source of red meat to energise their base. Trump and other leading politicians branded ESG as “woke capitalism” at odds with a business’s fiduciary duty to maximise returns for shareholders. ESG was derided as elitist and unaccountable, out of step with Main Street concerns.

The pressure worked. Larry Fink, BlackRock’s CEO, publicly distanced himself from the term after relentless Republican attacks. ExxonMobil and other fossil fuel giants, emboldened by the shifting political winds and a surging oil price post an extended war in Ukraine, poured funding into anti-ESG political campaigns globally and sued to block shareholder climate proposals, a move that would have been PR suicide at the $100 trillion peak of the ESG bubble in 2021.

The backlash went global, spreading even to progressive Europe, because of the influence and reach of American soft power. Like every victim of the American culture wars, ESG became polarising, raising questions about the deeper value of sustainability.

The corporate retreat from ESG

  • Many companies are quietly dropping ESG references.
  • They see DEI and ESG as liabilities rather than risk mitigators.
  • Sustainability must deliver measurable outcomes and align with core strategy.

Corporate behaviour and culture mirrors political trends, because the profit motive incentivises businesses to align with the expectations of politicians, customers, and investors.

In truth, corporate ‘values’ are seldom deeply held. Instead, they reflect the weighing of risk and reward. Until recently, boards and CEOs believed they gained social capital by virtue signalling on social issues. Those same claims today carry financial and reputational risk. Conservative activist Robby Starbuck, for example, has successfully pressured 15 multinationals to roll back or modify DEI policies he deems incompatible with consumer values.

In this more politicised environment, it’s important to note that not all sustainability issues are created equal. Some are rooted in science and evidence, such as managing physical climate risks, addressing biodiversity loss in supply chains, and implementing robust governance controls. These factors impact value creation and long-term resilience, regardless of which way the political winds blow.

Other issues, particularly within the ‘social’ pillar of sustainability, are more ambiguous. DEI can help foster inclusive cultures, but its link to superior financial performance remains contingent on context and execution.

Fossil fuel and related political interests exploit this ambiguity by conflating evidence-based sustainability considerations with identity-driven initiatives. Their strategy aims to erode public trust in science by framing all forms of sustainability as equivalent to identity politics—a vanity project imposed on the majority by a hypocritical and out-of-touch elite.

Republican presidential candidate, Vivek Ramaswamy, captured the essence of this deception when he said: “The climate agenda has nothing to do with the climate. It’s about punishing the everyday citizen and rewarding an elite class.”

The Sustainability Hype Cycle

  • We have entered the “Trough of Disillusionment.”
  • Many sustainability leaders and teams feel uncertain.
  • Sustainability is evolving, not dying.

Like many in sustainability, you might be feeling uncertain about the world right now. As I wrote recently in “The Great Decoupling: Australia’s Fragile Balancing Act“, America refuses to defend the global order it established after 1945, AI is about to reshape entire industries, immigration is causing social fracturing and the rise of the far right in many advanced democracies, and climate change revealing its real-world impacts at scale—all at once.

The era we have known all our lives is ending, and a new one is being born. The accompanying sense of newness, of the unknown, is anxiety-inducing. Sustainability is a microcosm of this reality, and many decision makers feel confused about how to position their organisations for success.

They’re asking:

  • Which sustainability initiatives matter—and which don’t?
  • Should we reduce the financial and human resources we’ve dedicated to sustainability in response to changing political signals?
  • How vocal should we be about the efforts we choose to pursue?

In these turbulent times, we need a framework to understand how big ideas like sustainability rise, face backlash, and mature. That’s where the Sustainability Hype Cycle comes in. The graphic below is adapted from my colleague Alex Gold’s book, Leaving Planet Simple.

Sustainability Hype Cycle

In late 2021, US$100 trillion sat in ESG funds. We hit the Peak of Inflated Expectations. The bubble has slowly deflated since. Trump’s return signals our progression into the Trough of Disillusionment. My expectation is the backlash will intensify through 2025, with more voices declaring “sustainability is a sham.”

But this doesn’t mean sustainability is doomed. As Bob Dylan says, the darkest hour is right before dawn. In response to this backlash, ‘real’ sustainability will sharpen its value proposition and climb its own Slope of Enlightenment, as it resets its focus on evidence-based outcomes tied to long-term value and resilience.

As the world grows more unpredictable, visionary businesses can use their sustainability agenda to adapt and respond to unexpected shocks and tipping points. This is the crucial point: Smart businesses will leverage uncertainty to get stronger relative to their less resilient and imaginative peers. This is the concept of anti-fragility.

Sustainability as anti-fragile strategy

  • Anti-fragile = growing stronger under stress.
  • Sustainability is anti-fragile because it embraces constant, inevitable change.
  • That makes sustainability more important in a volatile and uncertain world.

Nicholas Nassim Taleb’s work should be required reading for decision-makers. He explains that great organisations don’t just resist unexpected shocks—they gain strength from them. They are the fire, never the candle, when the winds of change begin to blow. Unfortunately, we don’t tend to think this way. In our strategic planning, we assume the near-term future will be like the present.

“Wind extinguishes a candle and energizes fire. Likewise with randomness, uncertainty, chaos: you want to use them, not hide from them. You want to be the fire and wish for the wind.”

— Nicholas Nassim Taleb

Take COVID: Most assumed things would be disrupted for a time before ‘bouncing back’ to normal. The mistake was right there in the language. We didn’t go back. The way we live and work changed.

A better understanding of the world acknowledges that complex systems like a company evolve through cycles of growth, decay, restructuring, and renewal. Enlightened leaders embrace uncertainty, reimagining their actions, plans, and strategies as experiments that must be constantly re-evaluated. They look for opportunities in chaos, anxiety and uncertainty—turning disruption into a source of innovation and strength.

Evidence-based sustainability is the corporate discipline best equipped to deliver anti-fragility. Visionary sustainability champions don’t fear AI, Trump or any other form of uncertainty; they absorb their new reality, and engineer strategies to grow stronger from it.

In the context of the Hype Cycle, anti-fragile sustainability is what propels us from the Trough of Disillusionment up the Slope of Enlightenment. By embracing uncertainty, we set ourselves up not just to survive shocks, but to prosper because of them.

Sustainability as long-term value and resilience

  • To fulfil the promise of anti-fragility, sustainability must adhere to pragmatic principles.
  • Efforts must deliver measurable results and align with core strategy.
  • Sustainability is indispensable when framed as long-term value and resilience.

Trump’s return doesn’t signal the end of sustainability. It marks a shift in how it must be framed and executed. The path forward lies not in virtue signalling, but in positioning sustainability as the pursuit of long-term value and resilience. Businesses must focus on efforts that deliver measurable results, align with core strategy, and avoid polarizing jargon like ESG.

Every capable decision-maker understands the paradox of making money. That forces beyond the balance sheet—shifting social norms, political trends, emerging technologies, demographic changes, resource scarcity, and climate change—ultimately shape markets and shareholder returns.

Sustainability is shorthand for this understanding. It endures because it is anti-fragile in responding head-on to challenges no serious business can afford to ignore: escalating climate risks, nature loss, competition for talent, and mounting pressure from consumers, regulators and investors for transparency. These forces are not abstract—they define how businesses compete and create value in a changing world.

The eight benefits of long-term value and resilience

BWD believes that the objective of sustainability is the pursuit of long-term value and resilience.

These two ideas—value and resilience—are mutually reinforcing and support anti-fragility. Valuable businesses are more resilient, because of the financial buffer at their disposal in navigating challenging times. Resilient businesses are more valuable, because they’re anti-fragile in the face of the inevitable shocks and tipping points which eliminate less hardy competitors.

There are eight benefits for a business that frames sustainability in this way:

  1. ONE STRATEGY, ONE GOAL

    Sustainability strategy should be indistinguishable from enterprise strategy, because the common objective is to build long-term value and resilience.

  2. EVERYONE’S JOB

    Sustainability must necessarily become part of everyone’s job because every employee must contribute to long-term business value.

  3. AVOIDS IDEOLOGICAL POSTURING

    Sustainability can’t be easily politicised, because all rational people agree that value creation and resilience are goals worth pursuing.

  4. ACKNOWLEDGES TRADE-OFFS

    Sustainability does not pretend win-win outcomes are always possible. Financial costs are real and ethical trade-offs common.

  5. SUPPORTS SUSTAINABLE DEVELOPMENT

    Focusing on ‘value’ in the general sense respects that a business may choose to create non-financial value as an end in itself, like supporting the SDGs.

  6. RESISTS FADS

    Focusing on ‘long-term’ value protects the organisation from implementing fleeting fads and moral panics which do not enjoy widespread societal support.

  7. UNDERSTANDS ANTI-FRAGILITY

    The pursuit of true resilience means understanding that chaos and uncertainty produce profound risks, but also the biggest opportunities to create new forms of value.

  8. INCORPORATES SYSTEMS THINKING

    Sustainability (unlike ESG) incorporates systems thinking; the wisdom to understand and accept that a business’s success ultimately depends on the flourishing of the society and the planet that surrounds it.

Conclusion

  • ESG is dead, but sustainability endures.
  • Anti-fragile sustainability is the antidote to uncertainty.
  • Focus on long-term value and resilience.

We began by examining shifting political norms and how ESG, already compromised, became weaponised. Then we plotted the retreat from ESG on the Hype Cycle and introduced anti-fragility as sustainability’s latent superpower. Lastly, we outlined practical rules for embedding sustainability to drive long-term value and resilience.

I’ll leave you with this. Companies in the S&P 500 had an average lifespan of 33 years in 1965, 20 years in 1990, and are now expected to last just 14 years by 2026. Anti-fragile sustainability—which converts uncertainty into opportunity—is more than a smart strategy. It’s a necessity for any business that wants to survive in an unpredictable world.