“We thought we had it all figured out.”
That’s what most of us assume about ESG strategy, until things don’t go as planned. Maybe the strategy that once worked suddenly falls flat, or months of careful planning don’t deliver the impact you expected. It’s frustrating, and honestly, it can leave you wondering where you went wrong.
Why didn’t your sustainability goals translate into real progress?
The answer to this question is that: it’s not enough to have an ESG strategy, you need to have the right one!
Only about 25% of companies are successfully implementing ESG strategies, according to a 2024 Deloitte survey.
While around 90% of large companies report on ESG, only one in four are making significant, meaningful progress.
If you are in the same boat trying to figure out how to build or refine your corporate ESG strategy, this blog is for you.
Let’s talk about the five most common mistakes companies make when shaping their ESG strategy and how to avoid them.
1: Treating ESG Like a PR Exercise
It’s tempting. Throw together a flashy sustainability page, post some CSR photos, and call it a day.
But investors and regulators are smarter than that. Instead of spin, they want substance.
A real ESG strategy has to go beyond branding. It has to align with your company’s values, drive action and show how you’re creating long-term value.
How To Avoid It:
Build your ESG framework from the ground up. To determine the issues that are most important to your company and stakeholders, start with a materiality assessment. Next, establish time-bound, quantifiable, and precise ESG targets.
“It is not good enough to do what the law says. We need to be in the forefront of social responsibility issues.”
– Anders Dahlvig, former CEO of IKEA
2: One-and-Done Planning
ESG isn’t a project you check off once and forget. It’s a living, evolving process.
Too many companies develop a corporate ESG strategy, publish a report, and move on. But ESG performance isn’t static, it changes with your business, your industry, and the world around you.
How To Avoid It:
Treat your ESG strategy like your business strategy. Treating it as a separate initiative rather than integrating it into core business strategy is a critical error.
You need to ‘plan, do, check, act’ and review it regularly. Embed ESG metrics into business KPIs. Use ESG reporting tools to monitor progress and adjust based on stakeholder feedback, regulation updates, and real-world events.
Only about 33% of companies have plans to align sustainability goals with their overall business strategy.
3: Not Involving the Right People
Sometimes ESG planning happens in a silo, just the sustainability team, or a few execs behind closed doors. That’s a mistake.
You need cross-functional input: operations, HR, finance, compliance, and even your front-line teams. After all, sustainability touches every corner of your organization.
How To Avoid It:
Create an ESG working group that brings in diverse voices. Encourage employees to participate in defining ESG goals and identifying risks. You’ll not only build a stronger ESG framework, but you’ll also get better buy-in across the company.
24% of companies cite internal silos as a major barrier to advancing their ESG agendas.
4: Undervaluing Governance & Data Integrity
Many firms focus on the ‘E’ of ESG (carbon, water, waste) at the expense of robust governance and data quality. Weak governance can erode stakeholder trust faster.
How To Avoid It:
Review your ESG priorities holistically and build governance into the core of your ESG strategy. Assign clear accountability at the board and executive level. Invest in ESG reporting software to ensure data is traceable, auditable, and aligned with standards like GRI, SASB, ISSB, and TCFD.
A 2023 McKinsey study found that companies with high board‑level ESG expertise outperformed peer TSR by 4–6 % annually.
5: Copying What Everyone Else Is Doing
It’s common for companies to look at industry peers and mimic their ESG playbook. But what works for one company may not work for you.
Your ESG risks, stakeholder priorities, and growth strategy are unique. ESG is not a copy-paste approach, and this can result in irrelevant goals, wasted effort, or missed opportunities to create real value.
How To Avoid It: Anchor your ESG strategy in your own business context. Use data, stakeholder input, and materiality analysis to guide your priorities. This not only strengthens your impact, but it also helps you stand out in a sea of sameness.
Companies with high ESG maturity-those that tailor their strategies-report 97% significant cost reduction & are 77% more likely to boost customer acquisition than those using generic, copycat approaches.
Get ESG Right the First Time
An effective corporate ESG strategy doesn’t just help you tick compliance boxes. It strengthens your brand, builds trust, improves risk management, and drives long-term financial performance.
“When sustainability is viewed as being a matter of survival for your business, I believe you can create massive change.”
– Cameron Sinclair (Designer & Writer)
Avoiding these five pitfalls is a great place to start.
So, ask yourself:
- Is our ESG strategy dynamic?
- Are we engaging the right people?
- Are our ESG goals clear and actionable?
- Are we balancing all three pillars (Environmental, Social, and Governance)?
And most importantly: Are we building ESG into the DNA of our business?
If you’re ready to turn your ESG ambition into action, the time to start is now.
Sources: Techtarget | Linkedin Post | EY | Mckinsey
