The Great Rebrand: Why Companies Are Saying “ESG” Less (But Doing More) and How AI Makes That Possible in 2026
- ESG Impact
- 3 days ago
- 5 min read
Meta description: The term “ESG” is vanishing from slide decks, yet disclosure expectations are hitting record highs. Here is what changed since 2023 and how AI is becoming the engine behind credible, audit ready sustainability communication in 2026.
The Market Shift: From “ESG Brand” to “ESG Proof”
If you have sensed a change in tone, the data supports your intuition. Over the last two years, the market has pivoted from using sustainability as a public brand signal to treating it as a measurable, defensible business capability.
The decline of the label is quantifiable. According to FactSet data, mentions of "ESG" in S&P 500 earnings calls peaked in late 2021 and dropped by approximately 31% by the start of 2024. Despite this silence, the workload has intensified. The term is being replaced by operational language like "sustainability," "impact," and "energy resilience," while the underlying reporting requirements continue to expand.
Regulatory and stakeholder demands for consistent data have effectively removed the option of silence.
Europe: The Corporate Sustainability Reporting Directive (CSRD) now impacts approximately 50,000 companies, requiring audits on non financial data starting with the 2024 financial year.
Australia: Mandatory climate reporting began for Group 1 entities on January 1, 2025, affecting the largest corporations first.
United States: Despite federal delays, California Senate Bills 253 and 261 compel thousands of public and private companies to disclose scope 1, 2, and 3 emissions and climate risks.
The dynamic is clear:
Litigation risk raised the cost of sloppy claims.
Disclosure regimes raised the cost of silence.
Procurement teams raised the cost of non comparable data.
The result is that companies are shedding the "ESG label" while investing heavily in the machinery required to produce the numbers.
What Changed Since 2023
2023: The Narrative Era Many organizations treated sustainability communications as a storytelling exercise. Reporting was often siloed in marketing or sustainability teams with limited controls. A 2023 KPMG survey noted that only 25% of companies felt ready to have their ESG data audited, reflecting a lack of rigorous internal systems.
2024 to 2025: The Tightening Three specific factors forced a shift in strategy:
Greenwashing Litigation: According to RepRisk, greenwashing risk incidents rose by over 30% globally in recent years. This surge made broad, unsupported claims legally dangerous.
Data Convergence: The consolidation of frameworks (like the ISSB absorbing TCFD) reduced the ability to "cherry pick" metrics.
Board Scrutiny: Board attention shifted from "should we say this" to "can we prove this."
Harvard Law School Forum on Corporate Governance describes this period as companies getting "stuck in the middle." They face pressure from stakeholders to disclose more and political pressure to say less, leading to a strategy of "Greenhushing," or performing the work without broadcasting the label.
What 2026 Looks Like
By 2026, large organizations will operate under a new reality where communications are strictly downstream of internal controls.
Sustainability claims will undergo review processes similar to financial statements.
Future tense promises ("We aim to") will be replaced by past tense evidence ("We measured and verified").
Communication strategy will shift from "finding a story" to "building a system."
This is where technology becomes the primary differentiator.
The Technology Problem Hiding Inside “Messaging”
Most failures in sustainability communication are actually data failures. A report by Bloomberg in recent years highlighted that over 90% of companies were still relying on spreadsheets for ESG data collection.
This creates critical vulnerabilities:
Metrics scattered across disparate vendors and offline files.
Conflicting numbers between finance, operations, and sustainability teams.
No digital audit trail to verify how a datapoint was produced.
Weak linkage between narrative claims and the underlying evidence.
In 2026, companies that communicate confidently will be those that can instantly answer one question:
"Show me the evidence behind that sentence."
How AI is Changing ESG Communications
AI does not make sustainability easy, but it solves the data bottlenecks that make reporting slow, expensive, and fragile.
1. AI for Evidence Linked Narrative Drafting
Modern Large Language Models (LLMs) can draft content that is grounded strictly in internal source systems rather than internet hallucinations.
Integration: The AI pulls directly from the ESG data platform, ERP, utility bills, and supplier portals.
Verification: It generates first drafts that reference specific metric definitions and time periods.
Gap Analysis: It flags claims that lack support (e.g., "This reads like a quantifiable claim, but there is no metric attached").
The Win: Communications teams stop functioning as investigators and start functioning as strategists.
2. AI for Consistency Policing
In 2026, the most common failure mode is inconsistency. AI excels at detecting these errors at scale.
Document Matching: It identifies when a number in the sustainability report differs from the investor presentation.
Definition Drift: It alerts users if the definition of "renewable electricity" changes between reporting periods.
Context Checks: It highlights missing boundaries, methodologies, or base years in data tables.
3. AI for Reputational Risk Monitoring
As "ESG" remains a polarized term, companies need speed to understand how stakeholders interpret their disclosures. AI enabled monitoring can track sentiment and misinterpretation risks across millions of data points, summarizing emerging issues by stakeholder group (investors vs. activists vs. customers).
The goal is not to "spin" the story but to spot confusion early and correct it with hard evidence.
The 2026 Data Control Checklist
To ensure your data is ready for AI integration and audit scrutiny, business leaders should focus on implementing these five specific controls before the next reporting cycle.
1. Data Lineage Tracking
The Goal: Every reported metric must be traceable back to its raw source.
The Control: Implement tags that link final KPIs (e.g., "Scope 1 Emissions") directly to the original utility invoice or meter reading.
The Benefit: This prevents "orphan data" where the origin of a number is lost during staff turnover.
2. Automated Variance Analysis
The Goal: Detect anomalies before the external auditor does.
The Control: Set automated flags for data that deviates more than 5% from historical averages or peer benchmarks.
The Benefit: AI can catch decimal errors or unit mix ups (e.g., liters vs. gallons) instantly.
3. Version Control for Definitions
The Goal: Ensure everyone speaks the same language.
The Control: Maintain a digital "Data Dictionary" that logs exactly when a calculation methodology changes (e.g., updating an emissions factor).
The Benefit: Eliminates the risk of restating earnings or emissions due to silent definition changes.
4. Role Based Access and Locking
The Goal: Prevent unauthorized changes to finalized data.
The Control: "Lock" data periods after validation so that numbers cannot be retroactively altered in spreadsheets without a documented approval log.
The Benefit: Creates the "immutable audit trail" required by frameworks like CSRD.
5. Narrative Evidence Linking
The Goal: Stop unsubstantiated marketing claims.
The Control: Require a hyperlink or database reference for every qualitative claim made in a public report.
The Benefit: Allows AI tools to instantly validate the text against the data.
The Emerging 2026 Best Practice: “Quiet ESG, Loud Proof”
The most resilient strategy for the coming year is simple:
Less ideology.
More measurability.
More risk framing.
More business linkage (cost, resilience, access to capital).
London Business School commentary suggests this shift moves away from sustainability as branding and toward sustainability as strategic foresight tied to tangible business outcomes.
What Leaders Should Do Now
If you are building toward 2026, focus on these AI enabled foundations:
Create a Single Source of Truth: Centralize ESG metrics, definitions, and boundaries.
Instrument an Audit Trail: Track exactly who changed data, when they changed it, and why.
Adopt Evidence Linked Writing: Ensure every public claim is hyperlinked to a metric or policy artifact internally.
Use AI for Control: Deploy AI for first drafts and consistency checks, never for invention.
Stress Test the Narrative: Run your story against regulation and investor expectations before publishing.
In 2026, the winners will not be the loudest storytellers. They will be the companies with the strongest systems and the clearest proof.
