A More Practical Language for Sustainable Business

ESG is not disappearing. But the language companies use to explain it is changing.

Efficiency, Satisfaction and Oversight (ESO) may offer a clearer way to connect sustainability with business performance.

For years, ESG has provided companies with a convenient shorthand for Environmental, Social and Governance priorities. It has helped organizations develop sustainability strategies, evaluate risks, communicate with investors, and report their progress.

But shorthand only works when people understand what it means.

Today, ESG can mean very different things to different audiences. To investors, it may describe financially relevant risks and opportunities. To sustainability professionals, it can encompass everything from carbon emissions and human rights to board composition and business ethics. To employees and customers, it may simply represent whether a company behaves responsibly. And in some public discussions, the acronym has become a politically charged label that can obscure the actual work being done.

Companies also use terms such as sustainability, ESG, CSR, impact and integrated reporting in different ways.

As a result, many companies are changing how they talk about ESG even when their underlying programs continue. Research from The Conference Board found that the percentage of S&P 100 companies using “ESG” in their sustainability report titles declined from 40% in 2023 to 25% in 2024. Among reports published during the early part of 2025, only 6% used the term. A separate Conference Board survey found that 52% of sustainability executives were reworking their communications, including moving away from ESG terminology.[1]

That does not mean businesses are abandoning the ideas behind ESG or sustainability. Morgan Stanley’s 2026 Sustainable Signals survey found that more than 90% of corporate sustainability decision-makers were continuing to execute their sustainability strategies. Eighty-eight percent said sustainability has commercial value, while 87% described it as an important risk-management exercise.[2]

The work is continuing. The language is evolving.

Across dozens of CSR, impact, sustainability and ESG reports, OBATA has seen both the terminology and the way companies frame their priorities evolve. Many of these shifts fall within three practical areas: Efficiency. Satisfaction. Oversight.

Together, these three ideas form what we call the OBATA ESO lens—a practical way to understand and communicate the business outcomes that strong sustainability and corporate responsibility programs should produce.

To be clear, ESO is not a new reporting standard, nor does it eliminate the environmental, social and governance responsibilities covered by ESG. Instead, it offers a plain-language way to explain why those responsibilities matter and how they contribute to a stronger organization.

E is for Efficiency

Environmental programs are often discussed in terms of emissions, waste, water consumption, energy use and natural resources. Those remain essential measurements. But inside a business, they are also measurements of something broader: efficiency.

EFFICIENCY ASKS

How intelligently are we using our resources?

Those resources include energy, water, raw materials, and land. They also include time, technology, capital, facilities, transportation capacity, and employee expertise.

What are some real-life examples of Efficiency?

• A company that reduces production waste is improving its environmental performance, but it may also be reducing material costs.

• A business that lowers energy consumption can reduce emissions while limiting its exposure to energy price volatility.

• A manufacturer that redesigns its packaging can use fewer materials, fit more products into each shipment, and lower transportation costs.

Viewed through the lens of efficiency, environmental responsibility becomes part of operational excellence. At OBATA, we see this connection repeatedly in the reports we help develop.

The International Energy Agency connects energy efficiency with not only emissions reductions, but also affordability, competitiveness, and energy security.[3]

Efficiency can include:

• Energy and water consumed per unit of production
• Material use, scrap rates and waste generation
• Packaging and transportation optimization
• Equipment performance and facility utilization
• Product durability, repairability, and circularity
• Data collection and reporting processes
• Supply-chain reliability and resource availability

It is important to point out that companies are not equating environmental responsibility with cost cutting. Some environmental investments are necessary even when their financial returns are long term or difficult to quantify.

Rather, efficiency helps organizations recognize that using resources responsibly is frequently good environmental management and good business management at the same time.

S is for Satisfaction

The social component of ESG may be its broadest and least consistently understood dimension. It can include workforce health and safety, labor practices, diversity and inclusion, human rights, product responsibility, customer welfare, supplier relationships, and community impact.

The word satisfaction makes that discussion more immediate by focusing on the people who experience the company’s decisions.

Here, satisfaction refers broadly to stakeholder experience and outcomes — not simply whether people are happy.

Are employees safe, respected, fairly compensated, and able to contribute? Do customers receive reliable products, honest information and responsive service? Are suppliers treated fairly and paid according to agreed terms? Do communities believe the company listens to their concerns and contributes constructively to the places where it operates?

Satisfaction is evidence that the relationships on which a business depends are functioning well.

For employees, satisfaction might be reflected in engagement, retention, safety, development opportunities, trust in leadership, and a sense of purpose. Gallup reported that only 20% of employees worldwide were engaged in 2025, while also finding that organizations with stronger engagement tend to outperform their peers in areas such as productivity, profitability, customer satisfaction, and retention.[4]

For customers, satisfaction may be demonstrated through loyalty, product quality, accessibility, complaint resolution, and trust in the company’s claims.

For communities, it might be reflected in meaningful consultation, local employment, responsible operations, and the company’s responsiveness when problems occur.

Satisfaction does not replace objective standards for human rights, workplace safety, fair labor practices or ethical conduct. A company cannot rely solely on favorable survey results to demonstrate social performance. But stakeholder feedback and experience are essential indicators of whether policies are actually producing positive outcomes.

THE SOCIAL QUESTION BECOMES MORE TANGIBLE

Are the people affected by our business better served because of how we operate?

O is for Oversight

Governance is the structure through which a company is directed and controlled. It includes policies, board responsibilities, executive compensation, risk management, ethics, internal controls and shareholder rights.

But the term can sometimes feel abstract. A better way to think of it is this:

Oversight describes governance in action.

Oversight asks: Who is responsible for each commitment? Who reviews the information? How frequently is performance discussed? How are risks escalated? What happens when the organization misses a target or discovers that its data is incomplete?

These questions are becoming increasingly important as sustainability information is incorporated into financial planning, risk management, and regulatory reporting.

IFRS S1, for example, calls for companies to explain the roles of governing bodies and management in overseeing sustainability-related risks and opportunities. The standard also organizes disclosure around governance, strategy, risk management, and metrics and targets.[5]

Oversight can include:

• Clearly assigned board and executive responsibilities
• Documented policies and management controls
• Reliable data systems and review procedures
• Regular reporting to senior leadership
• Connections between sustainability and enterprise risk management
• Performance incentives tied to defined objectives
• Processes for correcting errors and addressing missed targets
• Independent assurance when appropriate

Governance establishes the architecture. Oversight demonstrates that the architecture is working.

Morgan Stanley’s 2026 research found that 62% of surveyed companies had assigned sustainability responsibility at the board level, up from 42% in the previous year. That movement toward more visible accountability reflects the growing integration of sustainability into strategy, finance and risk management.[6]

Oversight is what turns a public promise into an accountable business commitment.

OVERSIGHT ASKS

Are public promises backed by accountable business commitments?

ESO Reflects Where the Business Conversation Is Going

ESO is not an established industry framework or a replacement for ESG. It is an OBATA communications lens that reflects how many executives are already connecting sustainability priorities with business performance.

The Conference Board’s analysis of C-suite priorities for 2026 found that environmental discussions were increasingly connected with resource efficiency and competitiveness. Social priorities were strongly associated with workforce resilience and economic participation. Governance priorities placed greater emphasis on performance and strategy execution alongside compliance and risk management.[7]

That evolution can be summarized through three practical questions:

1. Efficiency: Are we using resources responsibly while improving performance and resilience?

2. Satisfaction: Are employees, customers, suppliers, and communities benefiting from the way we conduct business?

3. Oversight: Are responsibilities clearly assigned, results properly measured, and claims supported by credible evidence?

These questions do not weaken ESG. They translate it into language that may be more meaningful to operations teams, business leaders, employees, and customers.

The ESO Lens Can Also Strengthen Sustainability Communications

Using the ESO lens to explain ESG priorities could provide companies with a useful narrative structure for reports, websites and corporate communications. It could also encourage companies to move beyond broad promises because each ESO category demands evidence.

• Efficiency requires a baseline and a measurable improvement.

• Satisfaction requires feedback and demonstrable stakeholder outcomes.

• Oversight requires named responsibilities, reliable controls, and visible accountability.

That shift from broad ambition toward measurable performance is already reshaping sustainability communications.

The same principle applies when sustainability information moves beyond the formal report into websites, investor communications, employee communications and other stakeholder channels.

A Translation, Not a Retreat

The future of ESG may not depend on defending the acronym itself. It may depend on helping people understand what responsible and sustainable business practices actually accomplish.

That is where ESO can help.

ESO IN ONE SENTENCE

Efficiency makes sustainability operational.
Satisfaction makes it human.
Oversight makes it credible.

Make Sustainability Easier to Understand — and Harder to Dismiss.

Strong sustainability programs can still lose impact when the language becomes technical, fragmented or disconnected from business priorities.

OBATA helps organizations connect sustainability strategy, evidence, writing, design and reporting—so progress is communicated clearly, credibly and in terms stakeholders can understand.

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1. The Conference Board, “Last Year, Just 25% of Big Companies Used ‘ESG’ in Their Report Titles. The Slowdown Continues in 2025…” and “Survey: 80% of Corporations Are Reworking ESG Strategies Amid Policy Shifts.” Report-title terminology research · ESG communications survey
2. Morgan Stanley Institute for Sustainable Investing, “Sustainable Signals: Corporates 2026.” Morgan Stanley Sustainable Signals 2026
3. International Energy Agency, “Energy Efficiency 2025.” IEA Energy Efficiency 2025
4. Gallup, “Global Employee Engagement Continues Decline,” April 7, 2026. Gallup employee engagement research
5. IFRS Foundation, “IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information.” IFRS S1
6. Morgan Stanley Institute for Sustainable Investing, “Sustainable Signals: Corporates 2026.” Morgan Stanley Sustainable Signals 2026
7. The Conference Board, “CEO and C-Suite ESG Priorities for 2026,” January 16, 2026. The Conference Board report.