ESG management is not just the responsibility of a dedicated team. The moment business departments discuss and execute together, the organization finally begins to function. [Photo = Korea Business Review DB]
The Crisis of the ESG Organization: Why Redesign Is Needed Again Now
The question of "Will we do ESG?" is already over. As of 2026, the real question facing companies has changed to, "Can we survive in the market if we cannot do ESG?"
Yet, a paradoxical scene is unfolding simultaneously.
Entering 2026, concerns are growing that the role of the CSO (Chief Sustainability Officer) is becoming increasingly vulnerable. With overlapping market volatility, geopolitical risks, and cost pressures, corporate management has begun to question the existence value of ESG organizations more coldly, and field anxiety is mounting as departures of high-ranking ESG personnel and organizational downsizing continue consecutively.
The fact that these two trends coexist is the core point today. ESG is not disappearing. However, it is being reorganized into a structure where 'declaring organizations' are phased out and only 'executing organizations' survive. This is precisely why we need to revisit ESG organizational design now.
In terms of regulations, the pressure has also doubled. The biggest change in the recent global market is 'mandatory enforcement' rather than 'evaluation'. Europe's CSRD (Corporate Sustainability Reporting Directive) goes beyond simply submitting reports, requiring comprehensive explanation and management of supply chains, human rights, carbon, and risk management systems. The era in which ESG could be dismissed with a single organization chart and an annual report has virtually come to an end.
The Failure of ESG 1.0: It Was on the Organization Chart, But Not in Management
Many companies created dedicated ESG teams over the past 4 to 5 years. However, a significant number repeatedly made the same structural mistakes. Three common failure patterns appear. These patterns also align with the analysis that ESG evaluation criteria are shifting from 'disclosure status' to 'actual risk and performance reflection.'