We are living through an era of transformation: the end of multilateralism, the dismantling of global value chains, the rise of populism, the dominance of technology over humanity, the return of tariffs, the resurgence of the State, and the search for a “new” sustainability. For many, this is a difficult transitional phase — but one that demands decisive action to ensure that human beings remain the central focus around which the future is built. Accepting the trauma of change requires open dialogue about values and a clear direction within the political agenda.
ESG: Where Do We Stand?
In recent years, attention toward ESG factors has grown, particularly regarding environmental (“E”) and social (“S”) commitments — while the “G” for Governance remains less discussed. Yet, if a company seeks to reduce its environmental impact or invest in social responsibility, it must rely on a solid governance structure capable of preventing risks and making strategic decisions.
Let’s take a step back. The ESG concept was born about twenty years ago, around the same time I began working in this field. In 2003, within the framework of the United Nations Environmental Programme Financial Initiative (UNEP FI), the first investor working group was created. In 2005, it presented the ESG project — an exciting initiative that sought to partially rewrite capitalism and production methods, balance interests, and bring together land, capital, and labor by introducing a fourth factor: ethics. Perhaps the actors of the time did not fully grasp the regenerative potential of that project, which entered a “system” largely unaware of its transformative force.
Twenty years later, where do we stand? What has been the practical implementation of ESG?
A great deal of work has been done — no doubt. Integrating ESG factors into business means embedding sustainability (environmental, social, and governance) into decision-making mechanisms, control processes, and management systems. The examples are numerous. Much progress has been made thanks to Sustainability Officers who, in the best cases, have succeeded in convincing boards and executives of the importance of these issues. They have demonstrated that managing ESG risks is essential to ensuring the resilience of business models and creating long-term value.
These monitored risks range from environmental to social aspects (including supply chains), the traceability of raw materials, and issues related to transparency and conflicts of interest. ESG factors are not a legal obligation — nor are they likely to become one, given the slow implementation of the CSRD — but they nonetheless have a profound impact on competitiveness and productivity.
Still, it is time to think about their evolution and introduce certain innovations.
A Proposal to Strengthen ESG
We must move beyond this long period of cultural latency and open a broader dialogue that brings everything together.
AISEC — the Italian Association for the Development of the Circular Economy — proposes a path that explores the diverse dynamics of Governance, establishing a connection with the concept of Justice, understood not only as a moral value but as an organizing principle for the various dimensions of Sustainability.
The goal is to overcome the current fragmentation of ESG initiatives and use Justice as a unifying framework. In this way, environmental, social, and governance actions are no longer viewed in isolation but as interconnected parts of a single design aimed at creating a fair and lasting balance for all stakeholders.
Among these actions is the idea of partially taking over functions traditionally belonging to the public sector — for example, acting directly in support of employees.
Today, compensation is no longer limited to salary: it includes pensions, contractual welfare, and corporate welfare. Companies can no longer delegate all responsibility for retirement security to the State. The risk of an aging workforce without adequate protections is real — and directly affects productivity, costs, and organizational sustainability.
Regarding pension funds, the eighth edition of the ET.Group-Assofondipensione research confirms ESG identity as a foundational factor for companies, one that also helps attract younger generations.
The “G” of Governance thus encompasses this important area of engagement, directly tied to social justice: pension systems represent an investment in employees’ future well-being and a sign of care for people — in one word, welfare. Complementary pensions, therefore, can serve as an additional ESG lever.
Europe can strengthen its competitiveness only by adopting a model that integrates advanced technology, the transition to renewable energy, and social justice — as Mario Draghi reminded us one year after his report. Could we begin by expanding the very notion of social justice?
For a long time, ethics and justice were viewed as matters to be regulated — sometimes even as obstacles to innovation. Yet we believe ethics is what allows us to innovate well. Purpose defines the aim of a company; ethics shapes how that aim is pursued. The connection between ethics and meaningful innovation is clear. We must start from purpose — from the company’s reason for being — to identify values and understand why, how, and in what areas to innovate. This requires appropriate governance strategies that foster education and transparent communication, generating participation and consensus.
Take, for example, several luxury brands such as Armani, Dior, Loro Piana, and Tod’s — all recently scrutinized by Italian authorities for human rights violations in their supply chains, jeopardizing not only ethical integrity but also fair competition, due to misleading statements in their codes of ethics.
Beyond the industry’s continuous “sorry state,” the entire system needs to redefine its strategic objectives to preserve both business and reputation.
Why ESG Is Ultimately a Business Issue
ESG principles directly influence how a company is run — and by definition, a company is not a democratic model. In the end, the boss makes the decisions.
Today, some people believe democracy no longer works, that technology is more reliable than human institutions, and that rationalism should subordinate morality to logic. These same people see hierarchy as the most effective way to organize corporate life. The myth of the entrepreneur has merged with the myth of the providential leader — both enabling the exercise of power without democracy. It is an individualistic, self-centered vision that mirrors our current society.
We believe such a vision leads to the gradual, inevitable disintegration of society itself — and of corporate reputation, increasingly reduced to a mere expression of financial capital and individual egos. For this reason, we advocate that the ESG vision must continue to inspire industrial, economic, political, and collective programs and projects.
