More Scope 3, less ESG: Sustainability disclosures amid shifting policy environment

Companies are phasing out the term ‘ESG’ from their sustainability reports amid an anti-ESG backlash – but more firms than ever are reporting their Scope 3 emissions.

Two recent studies of companies’ sustainability reports in 2024 and 2025 suggest that the corporate world may be adjusting its language to avoid drawing attention from anti-ESG politicians, while at the same time continuing to expand their sustainability data collection and disclosures.

Will 2025 mark the death of ‘ESG’?

Research by The Conference Board has revealed that the percentage of S&P 100 companies using the term ‘ESG’ in their sustainability reports dropped from 40% in 2023 to 25% in 2024. According to the think tank, 2025 could be the year the world buries the acronym: half of the firms in the index have already published their reports, and just 6% have used ‘ESG’ so far.

"Many companies are adjusting terminology in response to backlash, adopting terms in their report titles that are less politically charged, like 'sustainability' and 'impact,'" said Andrew Jones, Principal Researcher at The Conference Board Governance & Sustainability Center and author of the report.

Even though many firms in the US are feeling more concerned (31%), more uncertain (34%) or overwhelmed (14%) about reporting than last year, they are not reconsidering their sustainability strategy.

Only 8% of the sustainability executives surveyed said their firms are reevaluating their definition of sustainability in response to changing US policies. They are, however, increasingly concerned about their ability to meet climate targets in time: 87% of S&P 500 firms have disclosed climate-related targets, but 43% of the executives surveyed are uncertain or doubtful they will achieve them.

Scope 3 disclosures growing worldwide

Meanwhile, another survey by sustainability software firm Sphera has shown that globally, companies that report on their GHG emissions are increasingly likely to disclose all scopes: 79% are reporting on Scopes 1, 2 and 3 this year, compared to just 52% in 2024.

Additionally, nearly three-quarters (73%) of respondents who aren’t currently reporting Scope 3 emissions plan to do so in the coming years – including 47% that have given themselves two years to do so.

This is despite the fact that the Trump administration is fighting any type of climate-related disclosure in the US (having effectively terminated the SEC’s climate disclosure rule and now attempting to block individual states’ sustainability reporting regulations with an executive order), and that European regulators are looking to cut the number of companies having to report on emissions tenfold.

Paul Marushka, CEO and President of Sphera, commented: “Despite changing regulations, most companies understand that Scope 3 emissions management is a strategic necessity. Sustainability is fast becoming an extension of business best practices, with suppliers no longer merely competing on price and quality, but also on sustainability.”

The Sphera findings are reflected in The Conference Board’s study, which also found that disclosure of Scope 3 emissions “lags but is rising” amongst S&P 500 and Russell 3000 firms. "This rise in reporting is particularly notable given its complexity and reputational sensitivity, signaling growing readiness for compliance with regulatory mandates," said Umesh Chandra Tiwari, Executive Director of ESGAUGE, which supported The Conference Board in conducting the research.