By: Richard Walsh

“ESG is dead.” Recently, I was at an energy finance event in Manhattan when a managing director at a mid-market private equity firm made this declaration, loudly. Given I’ve devoted much of my career to clean energy, those words could have stung.

Instead, I found myself nodding at the underlying truth behind them. The superficial notion of ESG — stuffed into glossy reports, rarely tied to core operations — should be left behind if we want real progress. Surprised? Let me explain.

Why “E” falls short

For years, corporate America has bundled environmental, social, and governance concerns into a single acronym to denote broad corporate responsibility. The “E,” of course, officially stands for environment.

But in practice, it might as well stand for energy — central to everything from a manufacturer’s bottom line to a data center’s uptime to a retailer’s brand reputation.

Energy today goes beyond corporate social responsibility; it’s about ensuring your business can function today, tomorrow, and beyond. The North American Electric Reliability Corporation warns of significant reliability challenges due to tightening capacity, aging infrastructure, and rising demand. Regional capacity auction prices have surged, indicating higher power costs. Meanwhile, data centers are expected to drive nearly 50% of new load growth in some regions, stressing our electrical systems.

Once you grasp the scale of the challenges major companies are facing, it’s easy to see why the old, vague version of ESG might need to fade away.

The concept of ESG was born in the mid-2000s, intended to help companies focus on a broad set of responsibilities: limiting environmental harm, treating stakeholders ethically, and maintaining robust governance structures. The problem is that the acronym became too expansive and started to lose its meaning. The “E,” especially, often got diluted by generalized talk of carbon footprints, sustainability pledges, and far-too-distant goals.

It’s not that environmental responsibility (or social or governance considerations) stopped mattering. The issue is that the question of how to power operations — particularly using reliable, cost-effective, and adaptive sources — demands more than a line in an ESG report.

Management teams who cling to the old model risk missing one of the most critical levers for competitiveness in the modern economy. At worst, they could see their businesses disrupted by blackouts, price spikes, or regulatory changes faster than they can pivot.

A new lens on risk and opportunity

I’ve seen how innovative companies are already adjusting to this reality. They’re treating energy as a strategic imperative, not an afterthought. They deploy onsite solar and energy storage to protect against rising costs and grid instability while exploring microgrids to maintain operations during outages.

These decisions focus on safeguarding revenue, addressing customer needs, and mitigating operational risks while promoting long-term sustainability. Lumping them together under a single environmental heading can obscure how vital they are to day-to-day operations.

After all, if a plant goes dark for 24 hours, that’s not just a hit to your sustainability metrics; it’s a direct blow to your bottom line and your reputation. Customers, investors, and employees increasingly judge a company’s resilience by whether it can handle real-world shocks.

Boards are paying closer attention as well. Gone are the days when “E, S, and G” updates got fifteen minutes in a board meeting.

Energy security, cost volatility, and infrastructure resilience are now top-line concerns at many companies. Directors realize that if they’re not pressing for serious analysis of energy procurement strategies, risk hedging, and onsite generation, they could be caught off guard by events that shutter operations. At its core, this is about safeguarding shareholder value.

Ironically, the downfall of ESG might finally give energy the spotlight it deserves. Without the constraint of an acronym that blends everything from forest conservation to community relations, decision makers can tackle energy as an integrated business discipline.

To be clear, focusing on energy does not negate the importance of social or governance aspects of a business. A well-run company still needs corporate oversight, ethical supply chains, and stakeholder engagement. It’s just that lumping them all under “ESG” can become counterproductive if it means energy never gets the stand-alone treatment it demands. And in doing so, businesses might be surprised by the opportunity for interconnectedness.

Companies that invest in energy solutions also contribute positively to community development. Community solar projects, for example, provide low-cost, clean energy to commercial and industrial customers and residences. Onsite and larger offsite solar significantly reduce corporate emissions, appealing to sustainability-minded customers. These knock-on effects illustrate how real energy strategies can fulfill broader societal goals — without being shoehorned in the one-size-fits-all ESG acronym.

From lip service to real strategy

If “ESG is dead,” what replaces it? Well, my view is that we need to evolve into a new era of operationally integrated sustainability. In this framework, the environment, social impacts, and governance would still matter, but each would get tackled head-on, with dedicated plans and accountability.

Boards should work alongside operations managers to incorporate realistic energy forecasts into budgets and push for more rigorous analyses of how extreme weather events or shifting energy policies could affect supply chains. This means that companies would measure success with metrics like reduced outage times or stable energy costs, instead of vague pledges and 2050 goals.

This approach also aligns better with what customers and investors are demanding already. Stakeholders want to know exactly how your business will maintain production, keep services online, and manage costs as the grid strains under unprecedented load growth and persistent price volatility. Real energy strategies would answer these questions; the old ESG model often did not.

Perhaps ESG had to die for us to get serious about the critical nature of energy in modern business. By focusing on energy — whether you include it under the “E” in environment or the “E” in enterprise resilience — we’re shining a light on the heart of our operations, where real risks and real opportunities live.

It’s a shift toward a conversation that’s more honest, more tangible, and more aligned with the day-to-day realities executives face. The good news is that, as this dialogue matures, solutions are already within reach. Clean energy technologies have never been more advanced or more affordable. Capital is flowing toward projects that offer a demonstrable return on investment, not just a checkmark on a corporate values statement.

So let’s accept that superficial ESG had its moment — and move on. Let’s embrace the idea that real progress happens when we treat energy as the strategic engine of our future. In that sense, “ESG is dead” can be seen less as a funeral and more as the start of a far more productive chapter for business and society alike.

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