Nobody hears “social butterfly” and thinks “threat to the free market.” Nobody declines a wedding invitation because it says “social event.” And yet put the word “social” in front of three letters — ESG — and suddenly people hear something it was never meant to say.
So let’s clear the air, because this confusion is costing us good decisions.
Socialism and ESG are not the same thing. They aren’t even in the same category.
Socialism is a system — an economic model where the state owns or controls the means of production. You can debate it on its merits: as my own reading of history goes, it looked good on paper but never worked in practice. That’s a system-level argument.
ESG is not a system. It’s a lens — a way of making decisions inside market economies. It asks three questions before a company or a project moves forward: What are the environmental realities? How will we hold ourselves accountable? And who on the ground did we actually listen to before we decided?
That last question is the “S.” And it’s the one I want to talk about, because it’s the one people misunderstand most.
The “social” in ESG isn’t ideology. It’s community feedback. The people who live next to the project, drink the water downstream of it, and send their kids to the school across the street — they know the challenges and the opportunities better than anyone in a boardroom ever will. A good ESG approach treats that local knowledge as data, not decoration.
And here’s the thing: it works. Not as charity — as business.
Take Interface, the carpet-tile company. In 1994 its founder committed to eliminating the company’s negative environmental footprint by 2020. Engineers redesigned processes — one new cutting technology reduced trimming waste by 80 percent. The results, reported by the company: greenhouse gas emissions down 94 percent since 1996, and $433 million in cumulative avoided waste costs since 1995. Sustainability wasn’t a donation. It was a profit engine. (Company-reported figures, tied to specific engineering changes — I’ll always tell you when a number comes from the company itself.)
Or take the 2001 Community Benefits Agreement around L.A. Live in Los Angeles — the first of its kind in the country, signed between developer AEG and a coalition of 30 community and labor organizations. The community named its terms before approvals: 70 percent of the 5,500 expected permanent jobs at a living wage or better, 100 to 160 affordable housing units, local hiring. And because the community was brought in early instead of fighting the project in court, the development, in the record’s own words, “sped through the development process, winning approval and public support in record time.” That’s the “S” working exactly as it should: the people on the ground spoke, and the project got better and faster. (Honest caveat: long-term compliance monitoring was underfunded, so the decades-long follow-through record is thinner than the negotiation record. The early-engagement win is what’s solid.)
Or Ørsted, the Danish energy company that was one of Europe’s most coal-intensive utilities in 2006 and bet the company on offshore wind instead. It cut its own emissions by more than 98 percent and stayed profitable and growing. I’ll give you the full picture, because that’s my rule: the transition hit real headwinds — major write-downs on U.S. offshore wind projects in 2023–2024, and suspension orders on two U.S. projects in late 2025. Green bets carry execution and policy risk. That’s not an argument against the transition — it’s an argument for the “G.” Governance is what keeps a bold bet honest.
And if you want the case for governance in one number: Volkswagen’s emissions cheating — defeat devices in roughly 11 million vehicles — cost the company €31.3 billion by its own estimate in fines, penalties, buybacks, and settlements. The “G” isn’t paperwork. It’s the difference between a company you can trust and one that pays tens of billions for lying.
This was never a partisan story, either — and that’s worth remembering right now.
In 1970, then-California Governor Ronald Reagan signed the California Environmental Quality Act into law — the state’s counterpart to the federal National Environmental Policy Act. In his 2003 State of the Union address, President George W. Bush proposed a $1.2 billion Hydrogen Fuel Initiative — the largest federal hydrogen commitment to that point — betting, in his words, that “the first car driven by a child born today could be powered by hydrogen, and pollution-free.” (I’ll keep my phrasing honest: hydrogen research predates that initiative by decades, and its 2020 goal wasn’t met. But the commitment was real, and it put hydrogen on the national agenda.)
I wrote about this on LinkedIn back in early 2025, in a post called “We can have it all!”:
“Clean Environment, Good Moral Values and Good Governance. It all starts with stewardship and believing that everyone has something to offer. For too long, we’ve let environmental issues become unnecessarily polarized. The truth is, conservation and conservatism share more than just linguistic roots – they share fundamental values that go back generations. What’s more conservative than wanting to preserve the natural heritage we inherited from our Creator? … Real conservation isn’t about radical change – it’s about responsible stewardship.”
I still believe every word of that.
Conservation has always had champions across the political spectrum, because stewardship isn’t ideology — it’s responsibility.
And it’s on your ballot right now.
Californians are voting on Proposition 45 as we speak — an environmental regulation proposition where even the campaigns agree a judge will likely decide key questions, like whether data centers are covered. However you vote on it, notice what you’re actually doing: weighing environmental facts, demanding accountability, listening to the communities affected. That’s the E, the G, and the S — in civic form.
So here’s my question for you: if a company listens to the community before it builds, measures its environmental footprint honestly, and holds itself accountable when it falls short — is that ideology? Or is that just good business and good governance?
I’d argue it’s the latter. Not everything with “social” in it is bad. Sometimes “social” just means the people who have to live with the decision get a say in it.
Diala Jawhary is the Founder & CEO of A&D Solutions, a sustainability and resilience consultancy. If your organization is navigating community concerns, environmental review, or a project that needs local trust to move forward, A&D Solutions can help — with meaningful stakeholder engagement, feedback analysis, and proposal and grant writing that turn community voices into fundable plans.
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