How to Leverage Purpose to Respond to the ESG Backlash
The anti‑ESG movement has infiltrated shareholder meetings, public discourse, and boardrooms. However, companies are more resilient when they implement strong human, environmental, and governance practices. (EY) The most effective way to depoliticize sustainability is to anchor a company’s strategy and messaging in its purpose. As Larry Fink emphasized, “putting your company’s purpose at the foundation of your relationships with stakeholders is critical to long-term success.” (BlackRock) An examination of the approach taken by corporations with a stout purpose reveals a reliable roadmap.
To enhance your company's fortitude against the anti-ESG movement, start by identifying or refining your corporate purpose. This purpose should guide your sustainability initiatives toward the areas that will have the greatest material impact. Next, ensure that your sustainability strategy is built upon this foundation of purpose. Finally, when communicating your sustainability efforts externally, emphasize how they reflect your purpose and positively impact your bottom line.
Step 1: Back to Basics – What Is Your Corporate Purpose?
Fundamentally, a company’s goal is to “attract and retain talent, satisfy customers, and conduct business in a manner that secures its license to operate in the eyes of the community and regulators—all while earning an appealing return on capital.” (Harvard Business Review) Purpose demands a long‑term lens: it fosters loyalty and builds resilience.
Your purpose determines how your company acts under pressure. Crucially, “purpose requires clarity about the trade‑offs being made.” (Harvard Business Review)
Marriott offers a clear example. With inclusive practice at its core, Marriott’s path through backlash was already clearly charted. When asked about anti‑Diversity, Equity & Inclusion (DEI) legislation, CEO Anthony Capuano responded:
"Political winds blow all different directions, particularly when you operate in almost 150 countries… [B]ut there are some fundamental truths … that have guided us … We welcome all to our hotels and we create opportunities for all … those will never change.” (Daily Motion)
The response to Capuano’s statement was incredible. The day after taking a stand, Marriott’s CEO received 40,000 emails from associates thanking him. (Daily Motion) While standing by DEI might have angered some, there were no significant negative repercussions. Instead, it motivated one of Marriott’s key stakeholders: its employees.
Key questions:
What purpose guides your decision-making in moments of tension?
How did your company respond during past crises like the pandemic or recessions?
Does your company want to react to pressure or stay true to its core values?
Step 2: Use Purpose to Identify Material Issues
The key to sustainability is prioritizing the most impactful and pressing sustainable matters for your company. To achieve this, companies conduct a materiality assessment, which identifies and prioritizes sustainability topics (e.g., climate transition, human rights, anti-corruption) that have a financial impact on the company, such as access to capital, cash flow, and operations.
For instance, if Marriott’s purpose is to “welcome all and create opportunities for all,” then inclusive business practice and community development emerge as top priorities. The materiality assessment brings purpose to life by clarifying core areas of focus and the necessary trade-offs being made.
One of the goals of purpose is to get buy-in from the company’s stakeholders. (Harvard Business Review) Materiality assessments require engaging stakeholders to understand their priorities. Secure buy-in at the materiality stage to ensure stakeholders align with your company’s priorities later on.
Key Questions:
Can your stakeholders clearly articulate your purpose?
Which sustainability issues do they prioritize?
When did your company last conduct a materiality assessment?
**Note: If your last assessment was conducted more than two years ago, consider updating it to reflect recent political and economic changes.
Step 3: Purpose as the Foundation for Implementing Your Sustainability Strategy
Sustainability strategies fail to improve the bottom line when they are siloed, underfunded, or considered peripheral to financial performance. A purpose-driven strategy integrates sustainability throughout the company. Like purpose, sustainability must be everyone’s responsibility.
Picture 1: Coca-Cola, Purpose and Vision
For instance, Coca-Cola’s purpose is: “Refresh the world. Make a difference.” The purpose trickles down to its vision: “loved brands, done sustainably, for a better shared future,” which directs how it conducts business. (Coca-Cola) Coca-Cola’s environmental sustainability priorities are “water, packaging, climate and agriculture.” (Coca-Cola) The company’s resources demonstrate how its purpose and sustainability strategy are intertwined and disseminated across its operations.
Here are a few essentials for ensuring your teams are set up for success:
Bottom-up input: Empower internal experts to propose solutions
Resourcing: Allocate an appropriate budget and staff
Roles and KPIs: Align performance metrics with responsibilities and tie them to executive compensation
Executive sponsorship: Demand that leaders advocate and drive internally
Board oversight: Equip boards to support and challenge management
Cross-functional ownership: Include procurement, HR, compliance, strategy, and investor relations
Key Questions:
Is there alignment, top-down and bottom-up on the company’s purpose and sustainability priorities?
What resources and authority do the teams have to deliver on goals?
How will you measure success?
Step 4: Let Purpose Guide How You Communicate Your Sustainability Efforts
When sustainability communications stem from purpose and company context, they signal strategic thinking, not corporate fluff. Focus on material topics in your communications and demonstrate their relevance.
Picture 2: Johnson & Johnson, Our ESG Strategy
In this diagram taken from its sustainability page, Johnson & Johnson effectively illustrates the connection between its long-standing credo and purpose (“We blend heart, science and ingenuity to profoundly impact health for humanity”) and its sustainability focus areas: health equity, empowering employees, and environmental health. (Johnson & Johnson)
Regarding disclosures, as methodologies evolve and improve over time, it is crucial to be transparent about the changes and their impact. Stakeholders will understand if the data is different from what was previously reported, provided the changes are clearly explained and justified. For example, in its 2024 Climate Report, ScotiaBank articulated how its methodologies have improved since previous disclosures. (ScotiaBank)
Key Questions
What are your sustainability regulatory requirements? What are you required to disclose?
Where are your sustainability litigation risks? What are your communications guardrails?
Are you reporting the right metrics and updating them as standards, frameworks, regulations, and stakeholder expectations evolve?
Ultimately, sustainability and purpose are drivers of profit and long-term resilience. Focusing on purpose will help your sustainability efforts withstand scrutiny, particularly when your purpose has already proven to drive resilience over time.
Need help answering these questions? Book a free 20-minute consultation with our team!
