How Estée Lauder is Solidifying ESG Amid Global Pullback

ESG initiatives once stood as beacons of corporate responsibility, embraced by most of the S&P 500 and reflected in a flood of sustainability reports and ESG-aligned investments. 

What was once considered common sense in boardrooms, acting responsibly towards people and planet, has been recast as controversial. 

A growing anti-ESG movement, particularly in the US, has accused corporations of putting ideology above shareholder value. 

As a result, investors and executives now find themselves navigating a strategic minefield, where sustainability decisions can trigger both reputational risk and regulatory scrutiny.

Turning backs on DEI and ESG

More than US$8bn was pulled from global ESG funds in Q1 of 2025, US$6bn of which came from US investors. 

Shareholder resolutions have also declined, with tougher rules requiring economic justification for proposals on social and environmental issues. 

Meanwhile, the corporate vocabulary is shifting. New research from AlphaSense reveals that mentions of DEI in US company reports have dropped nearly 70%, while references to climate change are down 30%. 

This phenomenon, known as green-hushing, sees firms continuing sustainability practices but downplaying or omitting ESG language in public. 

“This moment in the ESG conversation feels less like a retreat and more like a refinement,” wrote Julian Cran, Global Executive at HP, on LinkedIn. 

“The anti-ESG movement, while disruptive on the surface, is inadvertently catalysing a deeper reckoning forcing companies to distinguish between performative alignment and authentic integration. 

“Perhaps the real evolution here is not about ESG as a label, but about how companies internalize complexity, navigate trade-offs, and build adaptive capacity. 

“Sustainability, then, becomes less about storytelling and more about systems thinking, how decisions ripple across supply chains, stakeholder trust, and long-term resilience.

“In that light, ESG isn’t fading, it’s evolving into something more rigorous, more embedded and ultimately more strategic. And that’s a good thing.”

The shift represents more than semantics; it reflects a conscious withdrawal from the once-celebrated ESG narrative in favour of quieter, more tactical operations.

Is ESG dead or evolving?

Despite the apparent retreat, ESG is far from dead. 

The backlash may be forcing companies to strengthen the substance behind their strategies. 

Sustainability disclosures are not only persisting, they're becoming more detailed and standardised, particularly in Europe and regulated markets. 

Ironically, this political pressure may be enhancing the value of ESG data by filtering out superficial commitments. 

Investors now distinguish between companies that quietly persist in sustainable practices versus those that capitulate under pressure. 

Rather than serve as corporate virtue-signalling, sustainability reporting is evolving into a tool for demonstrating resilience, operational discipline and long-term thinking. 

“PR-based sustainability strategies are very much out of favor with CEOs,” wrote David Metcalfe, CEO of Verdantix, on LinkedIn.

Our survey data points to what we are calling "strategic fragmentation" which is what you identified: integration into core business, increased strategic commitment, baseline investment or compliance-only. 

“Executive ambition not regulation is the most important factor determining which path a company is on.”

The survivors of this ESG stress test are companies for whom ESG is embedded in business strategy — not just brand management.

ESG at Estée Lauder

Estée Lauder Companies (ELC) stands as a noteworthy example. 

ELC has embedded ESG principles into its core business strategy, with a strong emphasis on sustainability, inclusion and transparency. 

The company achieved carbon neutrality in Scope 1 and 2 emissions and uses 100% renewable electricity across its global direct operations. 

Its packaging strategy follows the "5 Rs", aiming for 75–100% of packaging to meet at least one sustainable criterion by 2025. 

ELC is also focused on responsible sourcing, including FSC-certified cartons and increased use of recycled materials.

Socially, the company supports gender equity, employee well-being and community engagement, with regular reporting through its Social Impact & Sustainability Reports. 

In governance, ELC holds a medium ESG risk rating and publishes Climate Transition Plans detailing progress on emissions and resource efficiency. 

Recent achievements include surpassing water withdrawal targets and meeting palm oil goals ahead of schedule. 

“The Anti-ESG movement is making companies rethink how to position their commitments in their annual Corporate Sustainability Reports,” wrote Al Iannuzzi, Vice President Sustainability, Global Corporate Citizenship & Sustainability at ELC.

“Despite political backlash and regulatory hurdles, many companies are doubling down on ESG reporting while others are pausing or even stepping away. 

“Within these two positions I see a positive shift going on: superficial ESG language is fading, while operationally embedded practices persist. 

“The current sustainability reports will reveal which companies truly integrate sustainability into their business strategy versus those merely following trends and have hollow commitments. 

“The way I look at this is that sustainability is good business and corporate commitments (and more importantly execution) are indicators of a responsible company. 

“Most customers and investors want to buy products / do business with responsible companies - that's why sustainability commitments are an important business priority.”

Despite shifting political pressures, ELC continues to demonstrate that sustainability remains central to its long-term business value.

The sustainable language shift

Perhaps the most striking shift in the post-backlash era is linguistic. 

Companies are dropping overt ESG terminology, not necessarily out of apathy, but to avoid controversy. 

This shift from public declarations to operational discretion has reframed how we interpret corporate sustainability. 

Terms like “carbon neutrality” or “DEI goals” are being replaced with language focused on cost reduction, risk mitigation or innovation. 

What once sounded like moral aspiration now reads like business strategy and that may not be a bad thing. 

As investors dig deeper into reports, they’re finding more rigour and relevance. 

In this context, ESG’s transformation could mark a maturation.