ESG Beyond the Hype: From Reporting to Real Outcomes

While Environmental, Social, and Governance (ESG) continues to be part of the debate in the United States, across Europe, it is quietly transforming into a new kind of operating system for business. It all is because sustainability questions have become more than a buzzword — they are increasingly evolving into the way companies operate, compete, and grow.

Driven by frameworks like the CSRD and the EU’s Omnibus ESG Regulation, the question is no longer if ESG should be integrated, but how to do it well and competently. For many European firms, this means embedding ESG thinking into daily operations, not just reports.

As this shift becomes more visible, the question is, what does that transformation actually look like in practice? And what can U.S. companies learn from Europe’s lead? Let’s take a closer look.

A serious transformation

A lot of companies talk about ESG, but far fewer have figured out how to make it work as a driver for actual transformation. In many cases, ESG has been treated as a reporting exercise — something to track and showcase, but not necessarily use to make decisions. In Europe, as I mentioned earlier, it has changed a lot. We witness a shift away from “reporting for reporting’s sake” and toward ESG metrics as real drivers of business improvement.

It is seen especially clearly in the fintech and digital banking sectors. Many industry players already treat ESG as more than a checkbox. At the majority of them, sustainability and DEI indicators are embedded in leadership training and performance tracking. ESG metrics show up constantly in Objectives and Key Results (OKRs), influence hiring practices, and factor into how business risks are assessed. And it is not about greenwashing — it is a solid part of how these companies operate.

At the same time, the road to effective implementation is still bumpy. According to PwC’s 2024 Global CSRD Survey, only 26% of companies have centralized systems for ESG data, which remains a serious bottleneck. KPMG’s latest ESG reporting insights also suggest that many firms focus too heavily on the numbers, while neglecting the internal policies and structures that turn those numbers into action. So, while the intention is there, there is still work to be done to connect ESG reporting with real-time decision-making. 

ESG moves to the heart of financials 

One of the most misunderstood aspects of ESG is where it actually lives inside a business. Too often, it is considered as something separate from core financial operations — an external narrative or compliance burden. However, this is no longer how leading European firms approach it. Increasingly, ESG is showing up in the profit and losses as a means to manage costs and drive more sustainable growth.

Many companies have already started to share the data that extends beyond carbon targets, highlighting links to cost management and internal governance. These disclosures reflect shifts in vendor selection and accountability mechanisms, both of which influence operational efficiency and financial outcomes.

And with this, companies can benefit as well. Deloitte’s analysis indicates that entreprises with stronger ESG scores tend to have better market valuations. A 10-point bump in ESG metrics is associated with a roughly 1.8x increase in EV/EBITDA multiples. Kroll’s cross-industry study also supports this, with ESG leaders delivering average annual returns of nearly 13%, compared to just 8.6% for slow implementers. These figures suggest that ESG maturity is increasingly being priced into investor expectations and rewarded accordingly.

The changes from within

However, none of this works unless the people inside the company know how to act on it. Many executives underestimate the cultural shift required; without integration across departments, ESG risks remain disconnected from core operations. That is why internal education and sustainability upskilling have become critical, especially in fast-moving sectors like fintech. 

So, if ESG lives only in the compliance department, it is unlikely to change anything. But when every employee is trained to use ESG principles in their roles, the results start to appear.

Some companies are embedding ESG more deeply by integrating it into employee development. Internal programs are evolving to include ESG-specific tracks, helping individuals understand how sustainability connects to their day-to-day roles. This kind of organizational investment reflects a broader recognition: meaningful transformation only happens when people across all functions speak the same language. By building this shared fluency, ESG becomes less of a standalone initiative and more of an embedded standard — guiding decisions organically, rather than requiring enforcement.

From buzzword to backbone

There has been a lot of discussion recently about ESG losing relevance. Many say that it is too vague and still does not help in delivering clear and measurable results. But from what I drew before, it is clear that a completely different picture emerges. ESG is not going anywhere, and it only becomes more mature. The branding phase that probably took place previously is fading away, and what is taking its place now is more focused and much more powerful: ESG as part of the actual business machinery.

ESG will continue to shape how companies provide supply chain stability, respond to geopolitical volatility, design new products and handle many other processes of core business. In this sense, ESG is less about values and more about infrastructure. It becomes a way to future-proof the company and build trust.

For U.S.-based businesses and investors, this evolution carries an important message: ESG is not about belief anymore — it is about application. And the firms that learn how to operationalize ESG — beyond compliance, beyond reporting — will be the ones that emerge stronger and more resilient in a complex global market.