Beyond ESG: Reclaiming Sustainability Through Context-based Double Materiality

ESG has failed sustainability. While it succeeded in mainstreaming non-financial data into investment decisions, its conceptual vagueness, measurement incoherence, and structural subordination to investor interests produced a reporting regime that distracts from the need for structural change while legitimizing the status quo. The conflation of ESG with sustainability is not semantic sloppiness – it reflects a deeper ideological capture, institutionalized at global scale by the ISSB, whose standards are financial risk disclosure dressed in sustainability’s clothes. Double materiality represents a conceptual advance by requiring organizations to assess both how sustainability issues affect them financially and how their activities impact society and the environment. However, it remains insufficient without sustainability context. Without reference to ecological thresholds, social foundations, and system limits, even impact materiality risks reproducing the performative logic it seeks to replace. We argue for a context-based materiality grounded in rightsholder accountability, participatory processes, and planetary boundaries – what makes double materiality transformative.