ESG Inside is not an asset management metric, a formulaic institutional response to risk, a set of three thematic sustainability pillars, nor is it a drop-down menu of compliance challenges with comforting tick boxes.
ESG Inside seeks to change institution-wide culture to deal with novel, emerging risks – or as we call it, Complex Converging Systemic Risk (CCSR). We also want clients to see new value from sustainability upside in our changing world. To operationalise ESG Inside with impact we have developed ESG4.0.
What is ESG4.0?
ESG4.0, launched by TBCG in January 2025, is a new approach to handling risk and discovering new opportunities for institutions across the public, private and civil society realms.
From the board through operations and onto individual team members, ESG4.0 seeks to align the institution-wide approach to risk and new sustainability-driven opportunities.
Our ESG4.0 Masterclass, where we align team-wide thinking, is a good place for an institution to start. Also, see our CCSR-ESG4.0 paper to help understand the power of this approach.
Complex Converging Systemic Risks
As the former United Nations official who coined ESG in May 2004, TBCG Founder Paul Clements-Hunt, has given more than two decades of thinking and practice in his work around the world on how to understand new ESG risks and maximise ESG upside as the route to unlock sustainability value. ESG4.0 is a response to the new, evolving Complex Converging Systemic Risk (CCSR) which institutions and communities worldwide are facing.
The four steps to understand ESG4.0
Step 1: Systemic
How effective is your understanding of Complex Converging Systemic Risk (CCSR) and how is it integrated into strategic thinking? Are CCSR – such as social inequality, climate change, ecosystems destruction, food insecurity, water stress, geo-politics, populism, conflict, resource wars – seen as a risk to endure or a novel opportunity if addressed?
Step 2: Sectoral
Where does your company/ institution stand in comparison to peers in terms of employing the ESG risk and opportunity lenses to unlock value and build resilience?
Step 3: Company
How are you operationalising ESG thinking and approaches to maximum effect on an institution-wide basis?
Step 4: Executive
As an individual staff member, whether Board, Senior Executive or operational, are your own values aligned with the institutions? Is your voice heard? Can ESG4.0 help you connect Board thinking with institution-wide action to promote dynamic Governance?
ESG is dead, long live ESG…
ESG4.0 is, in part, a response to the vicious “ESG backlash” and suggestions that ESG is Dead? A few points on that:
- The acronym does not matter: whether ESG, GES, SGE, whatever, on a crowded warming planet, the risks and opportunities will remain
- ESG should not be seen as three separate E & S & G pillars but rather as a singular block, perhaps a Rubik’s Cube, with different risks and opportunities converging in new ways as the nature of risk changes.
- The fundamental purpose of ESG – when originated in 2004 – was to speed culture change and trigger new thinking in the worlds largest asset owners.
- ESG4.0 returns to the idea of institutional culture change to empower organisations to manage challenges and seize opportunities more effectively. As the nature of risk changes, ESG4.0 enables our clients to unlock value.