The US phenomenon of politicizing environmental, social and governance (ESG) might be a red herring, but it nonetheless creates a noise that prevents meaningful business progress in these areas.

"When you have a lot of noise, it obscures what's really important," VMware Chief Sustainability Officer (CSO) and VP of ESG Nicola Acutt told SDxCentral. Anti-ESG messages are "distracting to the real issues, which fundamentally are about long-term sustainability of organizations," she said.

ESG is about an organization understanding the climate and social risks and opportunities throughout its supply chain, like energy disruption or extreme weather events. But it's also about issues like inequality and other non-financial factors that materially impact company performance.

"The politicization is a potential hamstring to competitiveness," Acutt said, citing other parts of the world where anti-ESG messaging isn't given ample cable news network screen time. The VMware executive highlighted Europe, for example, and the region's "recognition of this fundamental, systemic risk to long-term profitability" and "commitment to creating a level playing field."

If US companies don't keep their eye on the ball, she added, they can be left behind and experience competitive disadvantages.

"Smart companies," she explained, sift through the noise. This looks like taking action to prepare for evolving regulations, designing for resilience, considering "scenarios for energy in the future" and taking care of human capital. "Our people who create value for our business – our suppliers [and] our customers – those stakeholders are fundamentally important to business viability," she argued.

Acutt recommends that ESG business leaders focus on the basics and "get back to what this is really all about" – business risk and growth, driven by strategy. Sustainability-focused leaders need to stay focused on key signals related to how the business adjusts to risk and opportunities from social or environmental issues that are relevant to its operations.

To that point, leaders should concentrate their efforts where they can significantly drive reduced risks or improved opportunities. "Separate the signal from the noise," Acutt said, otherwise "you're never going to get the real work of ESG in business done." ESG leaders are most successful when "partnering with the business to connect ESG into core business strategy," just "as we've done at VMware," she said.

In addition, "the pace of change in technology" interconnects with enterprise sustainability and ESG strategies, she noted. VMware says it's orienting its business strategy around machine learning (ML) and artificial intelligence (AI) workloads "because of how quickly that emerging technology is changing and shaping the world." But that focus also offers "another vector around which to look at sustainability and ESG, both from a risk and from a huge opportunity perspective."