By Business & Finance 
The ESG Awards, organised in partnership with Grant Thornton, celebrate excellence in leadership in the fields of sustainability and corporate responsibility.
Marie Donnelly received the ESG Leader Award for her outstanding contribution to advancing sustainability policies and steering Europe’s energy transition. She has played a central role in shaping European energy policies and continues to influence the global sustainability agenda through her advisory and governance work.
Pictured (L-R): Ian Hyland, President and Publisher of Business & Finance, Marie Donnelly, Chairperson of the Climate Change Advisory Council, and Martin Shanahan, Partner and Head of Industry at Grant Thornton.
European ESG strategy has undergone a rapid transformation over the past decade, evolving from fragmented voluntary frameworks into one of the world’s most comprehensive regulatory ecosystems. This has involved moving from a principles-based ESG to a standardised classification system, and from investor-led disclosure to regulator-mandated transparency.
Although ESG has been a significant driver of corporate responsibility and sustainable investment for years, the long-term viability and effectiveness of ESG policies have recently been the subject of intense debate.
The EU’s commitment to embedding sustainability principles across various sectors of its economy can be seen in the European Green Deal, Sustainable Finance Disclosure Regulation (SFDR), Corporate Sustainability Reporting Directive (CSRD), Corporate Sustainability Due Diligence Directive (CSDDD), and Taxonomy Regulation.
However, this alphabet soup of ESG terminology risks falling out of fashion. The catalogue of ESG acronyms has the dual disadvantage of alienating those who are not au fait with ESG policy, whilst also being relatively meaningless to those who do (e.g. the term “ESG” is itself broad-ranging and can mean different things to different people).
The debate over the economics and practicalities of Environmental, Social, and Governance (ESG) policy has been simmering on the other side of the Atlantic for some time. The inauguration of the current President, and the Republican Party’s control over both Congress and the Senate, tipped the balance in favour of ESG scepticism State-side.
Equally, the economic pressures facing the EU cannot be overlooked. The region’s economies have been grappling with challenges such as slow growth rates, high levels of public debt, and geopolitical uncertainties.
Policymakers have faced increasing pressure to relax stringent ESG requirements in favour of measures that boost economic recovery and competitiveness. This pressure can be seen from the delay in application of some sustainability-related legislation, e.g. the Deforestation Regulation and in the recent reversals of key ESG legislation.
The Corporate Sustainability Due Diligence Directive (CSDDD) and the Corporate Sustainability Reporting Directive (CSRD) were designed as levers to strengthen transparency, guide capital flows, reduce systemic climate change risks, and promote business competitiveness based on environmental and social sustainability.
These were intended to steer private investment towards environmentally sustainable projects based on access to high-quality, credible and comprehensive information for investors.
Riding on the crest of the Green Deal, these directives were originally adopted in the European Parliament in November 2022 by an 84% majority. However, in a total reversal, the European Parliament’s December 2025 decision to scale back key elements of these regulations was the result of both strong external pressure and internal political dynamics.
These divergences resulted in a major split within the European People’s Party, leading to it aligning itself with far-right forces during the parliamentary vote. The final Omnibus agreement, as adopted, was significantly more aggressive in cutting reporting requirements when compared with the original proposal, owing to this shifting political and economic climate.
Despite these changes, CSRD and CSDDD remain landmark regulations with significant requirements for large businesses, and other countries continue to follow the EU’s lead on mandatory due diligence.
Whilst the Omnibus directive reduces the level of ambition of the CSRD as originally conceived, it does include a review clause, stating that a possible increase in the scope of the directive would need to be considered in the future.
It will also be supplemented by further secondary legislation, including a delegated act to adopt simplified European Sustainability Reporting Standards (ESRS).
The next phase will likely focus less on expanding rules and more on improving coherence, enforcement, and real-world impact, perhaps with a slowing in the pace of new sustainability-related legislation – but not a complete reversal.
In particular, even the staunchest sceptics in Europe have tended to accept that ESG policy has at least some legitimate goals – and so they have instead focused their criticism on the mechanism by which those goals are achieved.
Weakening the Green Deal would also result in a lasting loss of Europe’s ability to establish itself as a competitive and credible geoeconomic and geopolitical player in the new global order.
Not only that, but it would also result in European leaders being unable to respond effectively to the needs of people and businesses, which are increasingly burdened by high energy costs – mainly dictated by the price of gas – and by the costs arising from the impacts of extreme weather events, such as the recent Storm Eowyn.
The debate on the Green Deal thus assumes a distinctly geoeconomic and geopolitical dimension, reflecting competition between alternative development models: on the one hand, a European model based on regulation, decarbonisation and the reallocation of capital; on the other, a model still strongly anchored to fossil fuels and the defence of traditional industrial interests.
This all sounds quite pessimistic, but it’s important to remember that sustainable investment itself is far from dead.
The current exodus from traditional ESG frameworks may, paradoxically, mark the beginning of a more meaningful era. Liberated from the tyranny of ratings and superficial compliance, companies now have a chance to reframe sustainability, not as a PR strategy or investor lure, but as a strategic imperative.
In doing so, they can return to the original spirit of ESG: building resilient, future-oriented businesses that generate lasting value for shareholders and society alike.
About the author: Marie Donnelly is an Irish policy expert and former Director for Renewables, Energy Efficiency and Innovation at DG Energy in the European Commission. She is widely recognised for her leadership in sustainability policy and Europe’s energy transition. She was recently awarded the ESG Leader Award at the 2026 Business & Finance ESG Awards in Dublin, which honours individuals making outstanding contributions to environmental, social, and governance leadership.
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Business & Finance ESG Awards 2026: Winners
From perception to proof: how ESG transparency is reshaping reputation in Ireland
