The Confusion in ESG Standards — And The Way Ahead

ESG today is confusing. Not slightly confusing — unnecessarily confusing.

And most companies feel this, but very few say it openly.

I’ve had multiple conversations where people ask: “Should we follow GRI?”

“Or ISSB?”

“Or what about CSRD?”

And honestly, I don’t blame them.

Because from the outside, ESG looks like a maze of frameworks with no clear starting point.

But after spending time in this space, I’ve realised something simple:

The problem is not ESG. The problem is how we’ve structured ESG.

We’ve taken something that should have been straightforward — measure your impact, disclose it properly — and turned it into layers of frameworks, overlaps, and jargon.

Each standard has its own purpose.

Some focus on impact. Some focus on financial relevance. Some focus on climate risk. Some are becoming regulatory.

Individually, they all make sense.

But for a company trying to act on this, the real question becomes: “Do I need to follow all of this, or just parts of it?”

And that’s where the confusion starts.

Most companies are not struggling because they don’t care about sustainability.

They’re struggling because they don’t know what actually matters.

Another thing that adds to this confusion is how different standards define “materiality.”

Some focus on what affects your financial performance. Others focus on the impact you create on the world.

Both are important — but they’re not the same thing.

And unless you understand that difference, ESG starts to feel even more complicated.

At the same time, the landscape is changing.

Earlier, ESG was more of a “good to have.” Now, in many regions, it’s becoming mandatory.

Which means it’s no longer just about doing the right thing — it’s about doing it correctly.

So what should companies actually do?

It’s simpler than it looks.

Don’t try to follow everything.

Focus on three things:What is mandatory for youWhat your investors care aboutAnd what story you want to communicate

That’s it.

Because the truth is — there is no perfect ESG standard.

And there probably never will be.

But things are slowly improving.

Standards are starting to align. There is more structure coming in. And over time, this confusion will reduce.

Right now, we are just in a transition phase.

If I had to summarise it in one line:

ESG is not complicated by nature. We’ve just made it complicated in practice.

And the way forward is not adding more frameworks —but learning how to use the existing ones more clearly and intelligently.