More and more investors are using ESG criteria to guide their decisions. In 2023, 78% of private equity professionals stated that ESG performance was aligned with their return objectives, according to a PwC study. ESG has become a strategic tool for building more resilient, forward-looking investment strategies.
ESG is built around three main pillars: Environment, Social, and Governance. These criteria assess how a company addresses major sustainability issues within its operations and development strategy. With the rise of new regulations like the European CSRD (Corporate Sustainability Reporting Directive), integrating ESG is no longer optional it's a strategic necessity.
These indicators matter to investors, consumers, internal stakeholders, and regulators, who now expect companies to transform their business models.
This pillar looks at how companies reduce their environmental impact from carbon footprint and waste management to resource usage and pollution control. It also includes biodiversity preservation, the use of renewable energy, and the fight against deforestation.
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This aspect evaluates the human impact of a company, both internally and in surrounding communities. It covers employee treatment, working conditions, health and well-being, equal opportunities, diversity and inclusion. It also addresses social dialogue, training, product quality, and transparency toward consumers and stakeholders (NGOs, suppliers, local communities).
Governance refers to how a company is run. It focuses on transparency, anti-corruption policies, risk management, board composition, executive compensation, and internal controls (e.g. whistleblower programs and audits).
It also examines strategic transparency, lobbying practices, political contributions, and conflict of interest management. Strong governance boosts investor trust and reduces financial, legal, and reputational risks.
A 2024 study by Deloitte and the Fletcher School, conducted among over 1,000 investment professionals, revealed that 79% of investors had implemented a sustainable investment policy compared to just 20% five years earlier. This shift is driven by tangible motivations: regulatory requirements (39%), improved financial performance (36%), and stakeholder pressure (34%). ESG integration has thus become a strategic lever for building investor trust, attracting talent, and better anticipating long-term risks. It is also essential for complying with new reporting obligations such as the CSRD in Europe.
Beyond reputation, a rigorous ESG policy is now a true accelerator for accessing funding. Investors favor organizations that can demonstrate a genuine commitment to sustainability and effective long-term risk management. In 2024, for example, the French start-up La Belle Forêt raised €1.8 million from EDF through the sale of carbon credits from forest preservation projects illustrating growing interest in high-impact environmental initiatives. Similarly, companies like L’Oréal regularly recognized for their ESG performance (Platinum EcoVadis rating, SBTi validation, 97% renewable energy use) enjoy strong investor appeal, with a market capitalization of €182.6 billion at the end of 2024.
These examples show that ESG is no longer just a matter of compliance or communication it is a strategic driver of competitiveness and sustainable value creation.
Moreover, ESG enhances a company’s reputation and credibility with all stakeholders. A clear and consistent ESG strategy signals responsibility, transparency, and commitment qualities that are increasingly valued in a rapidly evolving market. ESG also serves as a powerful risk management toolhelping companies anticipate regulatory, climate, social, and governance-related risks. By adopting a proactive approach, organizations reduce their exposure to controversies and strengthen operational resilience.
Finally, meeting growing expectations from consumers, business partners, and employees around sustainability has become a critical challenge. ESG now acts as a key driver of attractiveness, loyalty, and innovation especially in a context where ethical and environmental values increasingly shape purchasing decisions, partnerships, and career choices.
This chart illustrates the sectoral breakdown of companies that have adopted ESG (Environmental, Social, and Governance) practices. It highlights which industries are most engaged in responsible and sustainable initiatives.
Adopting an ESG approach presents a genuine strategic opportunity. However, to be credible, it also requires overcoming several concrete challenges: regulatory demands, significant investments, the risk of greenwashing, and the difficulty of measuring impact. These are all hurdles companies must anticipate to remain both effective and responsible.
To assess ESG performance, companies rely on a combination of indicators, reporting tools, and internationally recognized frameworks.
Companies evaluate their ESG performance using a set of qualitative and quantitative metrics tailored to their specific industry and sustainability priorities. Some of the most common indicators include:
Publishing a sustainability or ESG report has become a standard practice and often a legal requirement for many European companies. These reports outline an organization’s ESG commitments, the actions taken, and the results achieved. To ensure credibility, many companies engage independent external auditors to verify their disclosures.
More and more organizations are also adopting digital tools such as Datamaran, EcoVadis, Greenly, or ESG-integrated ERP systems to automate data collection, analysis, and consolidation.
To structure their ESG reporting, companies rely on widely recognized international frameworks, including:
CSRD (Corporate Sustainability Reporting Directive): This EU directive requires many companies to publish standardized sustainability reports based on the European Sustainability Reporting Standards (ESRS), marking a shift toward the full integration of ESG into corporate strategy
EU Taxonomy: A classification system that defines which economic activities can be considered environmentally sustainable, based on technical screening criteria aligned with the EU’s climate and environmental objectives
Across the globe, companies are implementing ESG initiatives that align economic performance with social impact and environmental responsibility. These real-world actions serve as inspiration, encouraging others to adopt higher sustainability standards.
These examples demonstrate that ESG is far from a passing trend — it is fundamentally transforming corporate practices. By delivering tangible, measurable outcomes, these initiatives create a ripple effect, encouraging other economic actors to embrace sustainable and responsible business models.
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