ADAPTED FROM RESEARCH BY MATT WATSON, and Zoe Soufoulis, UNIVERSITY OF SHEFFIELD

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TL;DR: Demand-Side Sustainability and the Execution Gap

• The Structural Flaw: Modern ESG frameworks rely on a top-down logic: mandate metrics and disclosures, and capital allocation will fix the planet. This theory fails because resource consumption is not driven by organizational intent or isolated rational choices; it is deeply embedded in everyday systems of practice (routines, culture, and physical infrastructure) that remain untouched by compliance paperwork.
• The Execution Crisis in Numbers:
  • The Strategy Gap: Only 30% of executives report making significant progress on executing their sustainability strategies, proving that disclosure does not equal action.
  • The Scope 3 Blind Spot: While 74% of companies disclose direct Scope 1 emissions, only 15% report Scope 3 value-chain emissions—which often account for over 90% of a company’s footprint. This occurs because tracking Scope 3 requires a granular understanding of real-world human practices (how customers use products, how logistics networks operate).
  • The Accountability Deficit: The OECD found that while 70% of companies by market capitalization disclosed a GHG reduction target, only half of those commitments included a near-term 2030 milestone, reducing targets to empty long-term options.
• The Social Practice Framework: Pioneered by human geographer Matt Watson, Zoe Soufoulis, and the DEMAND Centre tradition, research from the Change Points platform argues that breaking the resource-intensity cycle requires intervening directly at the level of daily routines. This means utilizing practice mapping to evaluate the technologies, competencies, and social meanings that lock in unsustainable behaviors.
• The Path Forward: To survive tightening regulations like the EU’s CSRD and the SEC’s climate rules, organizations must pivot from disclosure databases (what companies say) to an outcome database (what actually works). True sustainability requires mapping exact leverage points in everyday operations and redesigning infrastructure to make low-carbon practices the default path of least resistance.

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The Promise: A Decade of Ambitious ESG Commitments

Corporate sustainability targets are multiplying. Disclosure frameworks are tightening. Yet emissions keep rising and implementation lags behind intent. The reason may lie not in boardrooms or balance sheets, but in a blind spot so fundamental most ESG frameworks fail and worse – haven’t even named it yet: everyday human practice.

Over the past decade, the sustainability agenda has grown into one of the most powerful organising forces in global business and public policy. Institutional investors have integrated ESG criteria into trillions of dollars of assets under management. Regulators across the EU, UK, and US have moved to mandate climate risk disclosure. The UN Sustainable Development Goals have given policymakers a common vocabulary for planetary stewardship. Boardrooms everywhere now speak fluently about net zero, carbon neutrality, and Scope 3 supply-chain emissions. On paper, the architecture of a sustainable economy is being built faster than at any point in history.

That architecture is built on a deceptively simple idea: measure what matters, disclose it publicly, set a target, and the market will allocate capital towards solutions. It is, at its core, a top-down logic. Identify the right metric, mandate the right report, and organisations will follow.

The inciting problem is this: the logic is not working nearly as well as the volume of policy activity suggests it should.

The gap between what is declared and what is delivered is widening, not closing. And the reason for that gap is not primarily technical. It is not a lack of data standards, though those remain imperfect. It is not a shortage of capital, though green finance still faces structural barriers. The reason is something more fundamental — something that a generation of demand-side sustainability researchers has been quietly documenting since before ESG entered mainstream vocabulary, and that corporate sustainability functions have largely failed to absorb.

The reason is that most ESG frameworks treat resource use as a problem of individual choice or organisational intent, when in reality it is embedded in everyday systems of practice — the routines, infrastructures, norms, and social arrangements through which organisations and people actually operate. Change the metric; the practice continues. Change the disclosure rule; the behaviour persists. The gap between target and outcome is not a failure of ambition. It is a failure of theory.

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The Crisis: When Disclosure Becomes a Substitute for Change

To understand how serious the implementation gap has become, consider what the numbers actually say when you look past the headline commitments.

OECD GLOBAL CORPORATE SUSTAINABILITY REPORT 2024

Read these statistics alongside one another and a pattern emerges. Disclosure is near-universal among large firms. Targets are widely set. But execution is the exception, not the rule. Fewer than one in three senior executives say their organisation has made meaningful progress on actually delivering its sustainability strategy. That is not a disclosure problem. That is a practice problem.

“Disclosure is not the same as action. Setting a target is not the same as changing behaviour. And reporting progress is not the same as achieving it.”

The Scope 3 data point is particularly telling. Scope 3 emissions — those generated across an organisation’s value chain, through the products and services it purchases, and through how end-users consume what it makes — typically account for the vast majority of a company’s total climate footprint. For consumer goods companies, it can be 90% or more. For financial institutions, the lending portfolio often dwarfs operational emissions by orders of magnitude. Yet only 15% of companies report Scope 3 at all. Why? Because Scope 3 requires understanding what happens in the real world — how suppliers operate, how logistics networks function, how customers heat their homes, commute to work, dispose of packaging, and use the products they purchase. In other words, it requires understanding everyday human practice.

The Social Practice Gap in Corporate ESG

This is where a tradition of scholarship that predates the modern ESG era becomes urgently relevant. Research published through platforms like Change Points — a research-led intervention platform rooted in the social sciences and supported by the DEMAND Centre — has spent years documenting why top-down approaches to resource reduction systematically underperform. The intellectual foundation is social practice theory, and its core claim is both simple and radical: resource use is not primarily a product of individual decisions or organisational intent. It is a product of practices — shared, socially organised, infrastructure-dependent ways of doing things that are reproduced across millions of interactions every day.

Matt Watson, a human geographer at the University of Sheffield and one of the researchers behind Change Points, has described this as understanding “how everyday human action and social orders make each other.” That phrasing is worth pausing on. Social orders — institutions, regulations, cultural norms, physical infrastructures — shape what actions are possible, likely, or normal. And those everyday actions, in turn, reproduce and reinforce the social orders that enable them. The loop is tight and self-reinforcing. Breaking into it requires intervening at the level of the practice, not just the policy.

“Resource use is shaped not by what individuals choose in isolation, but by the systems, norms, and infrastructures that make certain ways of doing things feel normal, convenient, or simply unavoidable.”DEMAND CENTRE — UNDERSTANDING DEMAND

This has profound implications for how ESG policy is designed and evaluated. Most current ESG frameworks operate at the level of organisational intent: set a target, implement a programme, report on outcomes. They treat organisations as unified actors whose behaviour can be steered through incentives and disclosure obligations. What they miss is the layer beneath — the actual daily routines, work practices, procurement patterns, supply chain conventions, and customer behaviours that constitute real-world resource use. Those practices do not change simply because a policy or target exists. They change when the systems that sustain them are interrupted, redesigned, or replaced.

The Rising Stakes: What Happens When the Gap Goes Unaddressed

The OECD’s finding that roughly half of all disclosed GHG reduction targets lack a 2030 milestone is a useful proxy for how far the accountability gap extends. Targets without near-term checkpoints are not strategic commitments. They are options on future action — valuable for corporate communications, but not for the climate. And as investors and regulators grow more sophisticated, the gap between disclosed ambition and demonstrable progress is becoming a material liability.

The EU’s Corporate Sustainability Reporting Directive (CSRD), the SEC’s climate risk disclosure rules, and the growing body of transition plan guidance from bodies like the ISSB all point in the same direction: the era of vague, unverifiable sustainability commitments is ending. Organisations that have built their ESG strategy on disclosure without execution now face compounding risk — regulatory, reputational, and financial. The window to build genuine implementation capability is narrowing.

And yet the tools most organisations reach for — ESG ratings, materiality assessments, supplier codes of conduct, carbon offsets — are still largely top-down instruments. They operate at the level of the formal, the documented, the auditable. They do not reach the level of practice. They do not ask how people actually work, travel, consume energy, manage waste, or make purchasing decisions across thousands of daily micro-interactions. As a result, they generate data about intentions and disclosures, but relatively little data about what is actually changing on the ground.

This is the decisive obstacle: not a shortage of ESG policy, but a fundamental mismatch between the level at which policy operates and the level at which resource use is actually determined.

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The Path Forward: Policy That Meets Practice Where It Lives

The good news is that a more effective approach is available — and it does not require abandoning existing ESG infrastructure. It requires extending it. Specifically, it requires connecting the macro-level world of targets and disclosures to the meso- and micro-level world of practices, systems, and everyday operations.

Change Points offers one model for how this connection can be made. Rather than asking “what target should we set?” or “what should we disclose?”, the Change Points approach asks: “where are the leverage points within existing systems of practice where intervention can produce durable change?” That is a different kind of question, and it generates a different kind of intelligence.

It is not enough to know that a company has set a Scope 3 target. Policymakers and investors need to know whether the company has mapped the actual practices through which its Scope 3 emissions are generated — the logistics decisions, the supplier production methods, the product use patterns, the end-of-life disposal routes. They need to know whether interventions are being designed to reach those practice-level drivers, not just to comply with reporting obligations. And they need to know whether the interventions that are being implemented are working — not in the abstract, but in the specific social and organisational contexts where real behaviour change has to happen.

What Demand-Side Intelligence Looks Like in Practice

Researchers working in the social practice tradition have developed a number of concrete tools for this kind of analysis. Practice mapping identifies the constituent elements of a given practice — the materials and technologies it requires, the competencies it depends on, the meanings and norms that make it feel normal or obligatory — and traces how those elements are organised across a system. Intervention point analysis asks which of those elements is most accessible to influence, and what kind of intervention is most likely to produce durable change rather than temporary adjustment.

Applied to corporate ESG, this approach yields a significantly richer picture than conventional materiality assessments. Instead of simply ranking issues by financial exposure, it maps the actual systems of practice through which material impacts are generated — and identifies where, specifically, policy or operational change can interrupt or redirect those systems. It shifts the question from “what are our risks?” to “what, precisely, are we doing that generates those risks, and where in that system can we intervene most effectively?”

This is not a theoretical exercise. It has direct practical applications for policymakers designing regulatory interventions, for investors conducting ESG due diligence, and for sustainability leaders trying to move from reporting to execution. The DEMAND Centre’s research, for example, has produced detailed analyses of how energy demand is shaped by practices of working, cooking, commuting, and home management — and what kinds of policy intervention are effective at reconfiguring those practices versus which ones produce superficial, short-lived change.

The Role of Data: Connecting Policy Intent to Practice Outcomes

None of this is possible without better data — specifically, data that tracks not just what organisations declare, but what policies and interventions are actually being implemented, in what contexts, and with what measurable effects on resource use. This is precisely the gap that an ESG policy effectiveness database is designed to address.

The distinction matters enormously. Most existing ESG data products are disclosure databases: they aggregate what companies report. A smaller number are rating databases: they synthesise disclosures into comparative scores. What is missing — and what policymakers, investors, and sustainability researchers most urgently need — is a database organised around outcomes: which policies have driven real, documented change in resource use or emissions? Under what conditions do those policies work? What does the evidence say about effectiveness, not just about intent?

That is the intelligence that can close the gap between ESG ambition and ESG delivery. And it is the intelligence that, once available, transforms how all other parts of the ESG ecosystem operate. Investors can screen for genuine execution capability, not just disclosure quality. Policymakers can design regulations that reach actual practice-level drivers rather than just formal compliance obligations. Sustainability leaders can benchmark themselves against what has actually been shown to work, rather than against the average of what others are reporting.

The work begun by Matt Watson, Claire Hoolohan, and their colleagues at the DEMAND Centre and Change Points points the way. Their core insight — that resource use is embedded in everyday practice, not simply in individual choice or organisational intent — is as relevant to the ESG frameworks being designed in Brussels, Washington, and London today as it was to the academic debates of 2015. Perhaps more so, because the stakes are now immeasurably higher.

The question is no longer whether ESG matters. It does. The question is whether the ESG infrastructure we are building is connected to the level of reality where resource use is actually determined. The answer, right now, is not consistently. But it can be.

The path from declaration to delivery runs through everyday practice. The data that can illuminate that path is what a genuine ESG policy effectiveness database provides.

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