What Finance Bros Get Wrong About ESG & Sustainability - Sanjit's Weekly Notes #52
It’s becoming more common to see ESG (Environmental, Social, and Governance) being dismissed as nothing more than a “scam” or a politically driven agenda. These opinions, often loud and reductive, miss the point entirely.
Yes, it’s fair to critique ESG as a framework—there’s no denying that it’s imperfect, largely a regulatory construct designed to make companies more accountable in how they operate. But let’s get something straight: ESG is not the same as sustainability, and treating the two as interchangeable is not just wrong, it's damaging to the progress we desperately need to make.
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The Difference Between ESG and Sustainability
Before we go any further, let’s clarify this distinction.
ESG is a set of criteria designed for businesses and investors to gauge how well companies are addressing environmental, social, and governance risks. It’s a tool, a metric, and yes, it has its flaws. It can be misused or reduced to a box-ticking exercise, and it is absolutely fair to criticize ESG as an incomplete solution to the broader challenges we face.
But to dismiss sustainability because ESG has its limitations is a dangerous, lazy generalization.
Sustainability goes much deeper. It’s about ensuring that our actions today don’t compromise the ability of future generations to thrive. It’s a long-term vision of how we can live in harmony with our environment, reduce inequality, and build resilient systems that serve everyone. Sustainability is the end goal—a future where business, society, and the environment all coexist in a way that is mutually beneficial.
When people conflate ESG with sustainability and claim both are “scams,” they’re throwing out the baby with the bathwater. Just because ESG has weaknesses doesn’t mean the entire concept of sustainability is flawed.
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Short-Term Thinking is Killing Long-Term Solutions
Many in finance dismiss ESG and sustainability because they focus on immediate returns. Quarterly earnings, stock prices, and profit margins are the language of finance. So when ESG is seen as introducing additional costs or regulations, it’s viewed as a threat to the status quo.
But here’s the reality: Short-term thinking is no longer a viable strategy.
The climate crisis isn’t waiting for quarterly reports, and ignoring it is going to come at a cost that makes today’s regulatory “burdens” seem trivial. Extreme weather events, resource scarcity, and social unrest are already disrupting industries and supply chains across the globe. Businesses that fail to adapt now will be left behind—plain and simple.
By clinging to outdated, short-term financial metrics, critics of ESG are betting against the future. And it’s a bet they’re going to lose. If you think ESG is a burden now, wait until the full cost of inaction kicks in.
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Why Dismissing ESG as a "Scam" is Short-Sighted
Critics who dismiss ESG as a scam are missing the point in a big way. ESG, while flawed, is at least an attempt to integrate long-term risks and opportunities into the decision-making process. It’s a way to push businesses to recognize that their responsibilities don’t stop at the balance sheet.
But those who claim ESG is worthless are often the same people who can’t see past the next fiscal year. They treat ESG like it’s an obstacle, instead of seeing it for what it is—a step toward future-proofing businesses and society against the realities of climate change, inequality, and governance failures.
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Here’s what they’re ignoring:
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Finance Needs to Evolve, Not Resist
People in finance love to think they’re future-focused—constantly analyzing trends and predicting market behavior. Yet when it comes to ESG and sustainability, many show a stunning inability to see the long-term picture.
The world is changing, and resistance to ESG and sustainability is just delaying the inevitable. The financial system itself needs to evolve. Those still clinging to outdated models of growth, who see sustainability as a threat to profits, are on the wrong side of history.
The most forward-thinking investors already understand this. Sustainable investment strategies are outperforming traditional ones because they focus on resilience—building companies that will last, not just thrive in the next fiscal quarter.
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The Bigger Purpose at Stake
When people reduce ESG to a "scam" and assume sustainability is just corporate PR, they’re not just being critical—they’re being counterproductive. This kind of thinking undermines the global effort to tackle climate change, protect ecosystems, and reduce inequality.
ESG may not be perfect, but it’s part of a bigger purpose: to push businesses to consider their impact on the world and take responsibility for their role in creating a sustainable future.
Criticizing ESG? Fine. It’s a system that needs refinement. But dismissing sustainability as a whole? That’s not just wrong—it’s reckless.
The future is coming whether we like it or not. The question is, will we be ready for it?
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