The term ‘sustainability’ has been discussed in corporate environments for decades, and its meaning is being rewritten as reporting, investor communication, and regulations are also constantly shifting. Especially in the past two years, the vocabulary has been under scrutiny but not its underlying work. The label attached to it is changing fast, and understanding why matters for anyone shaping how a company talks about its environmental and social commitments heading into 2027.
The clearest evidence is in corporate disclosure itself. Only 25% of S&P 100 companies used the term “ESG” in their 2024 annual reports, down from 40% the year before—a sharp decline driven largely by political polarisation around the term in the United States. At the regulatory level, the U.S. Securities and Exchange Commission has stopped defending its climate-risk disclosure rule in court, effectively pausing it and sending the question back to the agency.
The European Union tells a more complicated story: it isn’t retreating so much as recalibrating who the rules apply to. Under the “Omnibus I” package that moved through Parliament and Council over the past year, mandatory Corporate Sustainability Reporting Directive (CSRD) coverage now applies primarily to companies with more than 1,000 employees and over €450 million in net turnover — a substantial narrowing from the original thresholds of 250 employees and €50 million in turnover, which is expected to remove roughly 90% of previously covered companies from scope.
Companies in the CSRD’s “Wave 2” have also had their first reporting deadline pushed back two years, from 2026 to 2028, and the European Financial Reporting Advisory Group has cut the number of required disclosure datapoints by 61%, shifting the standard toward materiality and judgement rather than exhaustive checklists. As one industry summary put it, for a large share of companies, “2026 is no longer a reporting year but a planning year.” Meanwhile, Australia and Spain were introducing new mandatory disclosure requirements of their own in 2026. The net effect is a regulatory map that no longer moves in one direction, which gives multinational companies every incentive to describe the same underlying work differently depending on which market, regulator, or investor is listening.
Although the first thought is that politics have played a role in eroding its meaning, it is not just that. More research argues that “sustainability” as a term has been stretched thin by its own success. A 2025 analysis in Discover Sustainability describes this as “sustainability inflation”, a widening gap between what companies say about their environmental commitments and what they actually implement, and connects it to a broader public “greenlash” visible in policy reversals across the US, UK, and Germany. The paper’s sharper point is that greenwashing itself has evolved: rather than the blunt overstatement typical of 1980s and 90s advertising, companies now lean on vaguer, harder-to-regulate language. For example, words like “natural” are difficult to verify the facts but still carry a green halo.
That erosion of trust has now reached the diplomatic stage. At COP30 in Belém, Brazil, negotiators included climate disinformation as a formal agenda item for the first time, explicitly framing “information integrity and countering false narratives” as a matter for international climate policy rather than just corporate accountability. When credibility problems around sustainability language become a UN agenda item, that’s a strong signal the word itself has become a liability independent of the underlying commitments.
To understand what 2027 is likely to be, it helps specify what actually happened this year, because 2026 has been less a single turning point than a steady accumulation of smaller shifts that all point the same direction.
On the regulatory side, the EU spent most of 2026 finalising the Omnibus simplification described above, while the US federal government continued to step back. The SEC’s non-defence of its climate rule effectively froze federal climate disclosure requirements for the year. That divergence forced global companies to run two playbooks at once: lighter, more materiality-driven reporting in the EU and much quieter, more discretionary disclosure in the US. On the language side, the greenhushing data, the drop from 40% to 25% of S&P 100 companies using “ESG” — largely reflects decisions made through 2024 and 2025, but 2026 is the year that pattern became the default rather than the exception, with S&P Global forecasting that companies will keep evolving their language “toward pragmatism, risk avoidance and profitability”.
Even government communications on adaptation will favour words like “infrastructure” and “security” over more politically charged terms.
On the operational side, two pressures intensified through the year that will carry directly into 2027 planning cycles: rising energy and water demand from AI and data centre growth, which S&P Global flags as an emerging tension between the technology sector’s stated sustainability goals and its actual resource footprint, and continued volatility in sustainable finance as capital competes across a widening range of “transition” and “resilience” labelled products.
And on the diplomatic calendar, COP30’s outcomes—a $1.3 trillion target for annual climate finance mobilisation by 2035, an operationalised loss-and-damage fund, and notably weaker language on fossil fuel phase-out than more than 80 nations had pushed for—set the agenda for COP31, which convenes in Antalya, Turkey, from November 9–20, 2026, after a compromise resolved a hosting dispute with Australia. Whatever comes out of that summit will land right as most companies are finalising their 2027 sustainability communications strategy, making it one of the more consequential single events sitting between now and next year.
Industry analysts are describing the pattern as companies quietly abandoning this work; instead, they are relabelling it in terms that sound less like advocacy and more like risk management. Three terms are doing most of that work right now: “resilience”, “decarbonisation”, and “double materiality“—the more technical, EU-rooted framework for evaluating both a company’s financial exposure to sustainability issues and its impact on people and the environment. Trellis’s own 2026 conference takeaways say this from the practitioner side: “Sustainability isn’t disappearing. It’s integrating” — meaning the function is being absorbed into finance, operations, and enterprise risk management rather than sitting apart as a standalone initiative with its own branding and its own report. Independent analyst firm Verdantix frames 2026 similarly, describing it as a turning point where the emphasis shifts from commitments and pledges toward proof that sustainability initiatives deliver measurable operational and financial returns.
It would be easy to read all of these developments as a simple reversion. Sustainability’s marketing gloss is fading, and companies are retreating to the older Corporate Social Responsibility model, where environmental and social work stays as a discretionary, reputation-driven function not much connected to the core business. The evidence, however, supports the opposite of this reading.
What’s happening looks more like consolidation than retreat: Carbon exposure, water risk, and governance failures are increasingly treated as financial line items rather than narrative talking points, embedded into underwriting and risk models instead of being published in a CSR report once a year. Double materiality assessments, in particular, are a genuinely new mechanism that didn’t exist in the CSR era that formally ties environmental and social exposure to financial statements. That’s a step further into the business, not a step back out of it.
Everything mentioned mostly describes leading indicators; the forecast is not complete yet, and it’s worth being direct about that gap. As of this writing, none of the major institutions that publish serious year-ahead sustainability outlooks have released their 2027 editions yet, and for good reason: they typically arrive on a predictable calendar. The World Economic Forum’s Global Risks Report—previewed in December ahead of Davos and formally released in January—represents the closest thing the field has to a consensus read on how environmental and geopolitical risks rank against each other as the new year approaches.
In the upcoming months, before the fourth quarter ends, it will be more accurate to translate regulatory and investment trends into practicalguidance for corporate sustainability and finance teams.
Alongside those, two concrete events will shape what they say: the outcome of COP31 in Antalya in November and whether the EU finalises its Amended European Sustainability Reporting Standards on schedule later in 2026. Both are due to resolve before any report is published, which means 2-2027 editions should speak fairly directly to the trajectory described, rather than standing in speculations alone.
For anyone writing external communications right now, the signal is fairly consistent across every source above: leading with the word “sustainability” or “ESG” in a headline is not a neutral choice. It reads as a political signal to some audiences, whether that’s intended or not. The safer, more durable framing for 2027 is likely to centre on the outcome rather than the movement: resilience, efficiency, risk reduction, decarbonisation progress, and measurable return. The substance doesn’t need to change. The vocabulary almost certainly will.
