Former U.S. climate envoy Kerry says 'ESG' needs to rebrand

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  Published in Business and Finance on Tue, Sep 9th, 2025 by reuters.com

Former US Climate Envoy John Kerry Calls for a Rebrand of ESG, Urges a Global “Climate Action Scorecard”

September 30, 2025 – Reuters Sustainability

In a highly‑anticipated appearance at the World Economic Forum’s Sustainability Summit in Geneva, former U.S. climate envoy John Kerry delivered a forceful critique of the Environmental, Social, and Governance (ESG) framework that has, until now, dominated corporate sustainability reporting. Kerry, who served as the United States’ Special Representative for Climate Change under President Barack Obama, said the current ESG landscape is more “buzzword” than actionable tool and that a new, science‑driven rebranding is essential if the world is to meet its Paris‑Agreement commitments.

ESG as a “Marketing Tool”

Kerry opened with a stark assessment: “When we talk about ESG today, we’re talking about a marketing tool. Companies use it to look green while their emissions, labor practices, and governance remain unchanged.” He cited a study from the Sustainability Accounting Standards Board (SASB) that found a disconnect between high ESG scores and actual progress on carbon reductions. “A company can score 90% on ESG because it has a nice sustainability website, but if its net‑zero target is set for 2035 instead of 2030, that’s a problem,” he said.

He also pointed to the Carbon Disclosure Project (CDP) and the Task Force on Climate‑Related Financial Disclosures (TCFD), noting that while these mechanisms provide data, they lack a clear, unified metric that investors can rely on to assess climate risk. “Data is only as useful as the lens through which it is viewed,” Kerry said.

A Call for an “International Climate Action Scorecard”

Kerry’s central proposal is the creation of an “International Climate Action Scorecard” that would set standardized, science‑based targets for corporations—mirroring the Science‑Based Targets initiative (SBTi) but with an international regulatory backing. “If we could have a scorecard that is tied to the latest climate science and that is recognized by regulators in every jurisdiction, we would remove the current ambiguity that allows companies to cherry‑pick metrics,” he explained.

The proposal would involve the International Energy Agency (IEA) and the United Nations Framework Convention on Climate Change (UNFCCC) to develop a set of indicators that align directly with the 1.5 °C pathway. “We have a proven framework in the Paris Agreement; why can’t we translate that into corporate governance?” Kerry asked.

Linking ESG to the United Nations Sustainable Development Goals

Kerry also emphasized the need to connect ESG reporting to the 17 Sustainable Development Goals (SDGs). “ESG is not just about the environment; it’s about poverty, gender equality, and good governance,” he said. He called for a revised ESG framework that would track progress against SDG indicators, particularly SDG 13 (Climate Action) and SDG 12 (Responsible Consumption and Production). The call was met with applause from a room full of CEOs, policymakers, and sustainability experts.

Investor Pressure and the Role of Regulation

Kerry’s remarks come at a time when U.S. regulators, including the Securities and Exchange Commission (SEC), are preparing a comprehensive rule that would require publicly traded companies to disclose climate risks more transparently. He noted that the SEC’s draft rule “could be the first step toward a global standard,” but cautioned that it would need international cooperation to be effective. “Without a unified global framework, the SEC’s rule will be another piece of a fragmented puzzle,” he warned.

He also mentioned the growing pressure from institutional investors, citing a report by BlackRock that predicts up to 30 % of global capital could shift away from high‑ESG‑rating firms if they fail to meet science‑based targets by 2030. “Investors are looking for real, measurable progress, not just a glossy rating,” Kerry added.

The Bottom Line: A Rebrand is Needed

When asked whether ESG could ever be “fixed,” Kerry answered, “ESG was never built to be a definitive standard. It was built to be a starting point. That starting point needs to evolve.” He called on policymakers, corporations, and investors to collaborate on a new ESG architecture that is anchored in climate science, aligns with the SDGs, and is enforceable across borders.

Kerry’s call to action echoes a growing sentiment in the sustainability community that the current ESG framework, while useful for raising awareness, has become a liability when it is used to green‑wash rather than to drive genuine change. Whether his proposal for an “International Climate Action Scorecard” will gain traction remains to be seen, but it undoubtedly adds momentum to the ongoing debate about how best to align corporate behavior with the urgent demands of the climate crisis.

For further context on the ESG framework, see the Sustainability Accounting Standards Board’s (SASB) recent report on “ESG Score Discrepancies” (https://www.sasb.org/ESG-Score-Discrepancies) and the Task Force on Climate‑Related Financial Disclosures (TCFD) guidelines (https://www.fsb-tcfd.org).