ADAPTED FROM RESEARCH BY MATT WATSON, UNIVERSITY OF SHEFFIELD

---

• TL;DR: Why ESG Fails and How “Infrastructuration” Fixes It
• The Core Problem: Traditional ESG frameworks rely heavily on data, disclosures, and top-down reporting, yet consistently fail to alter real-world resource consumption. This occurs because they target metrics rather than the underlying physical, technical, and institutional systems that dictate everyday human behavior.
• The Concept of Infrastructuration: Grounded in research by Professor Matt Watson (University of Sheffield) and the DEMAND Centre, this framework establishes that infrastructure (grids, supply chains, urban layouts) and social practices (how people actually live and work) are recursively linked. They shape one another; changing policy without changing the physical system ensures failure.
• The ESG Paradox in Numbers:
  • 70% of large-scale organizational transformations fail due to weak execution and poor behavioral engagement (McKinsey).
  • Only 9% of 100 major European companies clearly explain a risk-based approach to their value chains, revealing a lack of operational depth (2025 CSRD Analysis).
  • Only 32% of those boards possess verified awareness of whether their sustainability measures are actually working.
• The Solution: True sustainability does not happen via boardroom pledges or compliance checkboxes. Investors and policymakers must shift focus to the urban nexus—intervening directly at the junctions where physical infrastructure meets bottom-up daily practices (e.g., building design, procurement defaults, and transit systems) to make sustainable behavior the default path of least resistance.

---

Theory is great. Execution is better. Understanding the psychological levers behind user behavior is only half the battle—building them into your product is another. If you’re tired of running A/B tests on instinct and want to start deploying these frameworks in your next sprint, you need the right infrastructure.

---

The urban nexus: infrastructures, politics and spatialities

Once upon a time, the world’s most powerful institutions — investment funds managing trillions, multinational corporations with sustainability pledges stretching across continents, and governments crafting net-zero legislation — believed that the path to a more sustainable future ran through better measurement.

If you could count it, report it, and disclose it, the thinking went, you could change it. ESG frameworks multiplied. Disclosure requirements thickened into documents hundreds of pages long. Boards signed off on targets. Ratings agencies ranked companies from A to D. The machinery of accountability hummed with apparent purpose, and the field called this progress.

Every day, inside that machinery, something quietly failed to happen.

The buildings still consumed energy the same way they always had, because the pipes, wires, meters, and thermostats embedded in their walls had not changed. The supply chains still ran on the same logistics, because the warehouses, ports, and procurement software had not changed. The commuters still drove, because the transit infrastructure, zoning codes, and urban layouts had not changed. Policies were written. Reports were filed. The underlying systems that govern what people actually do from morning to night — the infrastructures of everyday life — remained almost entirely untouched.

This is not a peripheral problem. McKinsey research consistently shows that roughly 70% of large-scale organizational transformations fail, most often because execution, incentives, and genuine behavioral engagement are not aligned. Corporate ESG programs are not exempt from this pattern. When a sustainability strategy is built on reporting rather than on changing the systems that shape behavior, it is a transformation in name only.

The gap between what ESG promises and what it actually delivers is not primarily a data problem or an ambition problem. It is an infrastructure problem — and understanding why requires a concept that most ESG frameworks have never encountered.

---

---

The Concept of Infrastructuration

One day, at a roundtable conference in the French town of Autun, a different conversation took place.

Professor Matt Watson of the University of Sheffield — a human geographer whose research sits at the intersection of social change, sustainability, and everyday practice — presented a paper co-authored with Elizabeth Shove. The paper had grown out of work conducted at the DEMAND Centre, a major UK research centre dedicated to understanding end-use energy demand and how the infrastructures of daily life shape how resources are actually consumed. The setting was the urban nexus agenda: how cities, as concentrations of infrastructure and human activity, can either accelerate or obstruct the transition to sustainable resource use.

The concept Watson and Shove developed — and that the conference was convened to explore — was infrastructuration. It is a deliberately unglamorous word for something that turns out to be the master key to understanding why so many sustainability efforts, however well-funded and earnestly reported, quietly stall.

Infrastructuration names the recursive relationship between two things that most frameworks treat as separate: the physical and institutional systems through which resources are provisioned — the grids, pipes, roads, digital platforms, procurement systems, and regulatory architectures — and the everyday social practices through which people consume those resources. These two things are not parallel tracks. They make each other. The infrastructure shapes what practices are possible, normal, and convenient. The practices, in aggregate, constitute the demand that justifies and reproduces the infrastructure. Change one without changing the other, and neither change holds.

This is not an abstract theoretical claim. It is an observable feature of every urban environment on Earth, which is precisely why the urban nexus is such a critical lens for ESG policy effectiveness.

---

---

The ESG Paradox in Numbers

Because of that insight — that infrastructure and everyday practice are mutually constitutive — a new way of diagnosing ESG failure becomes available.

Consider what most corporate ESG programs actually intervene on. They set targets at the top. They produce sustainability reports that describe intentions and, sometimes, outcomes. They hire ESG officers and establish governance structures. What they rarely do is ask: what are the actual everyday practices through which our operations consume energy, water, and materials? And what are the infrastructures — technical, social, and institutional — that make those practices feel normal, necessary, and difficult to change?

The evidence that this question is being systematically avoided is not anecdotal. A 2025 analysis of ESG reports from 100 large European companies reporting under the CSRD found that only 9% clearly explained a risk-based approach to their value chains — the operational detail that would actually prove whether their sustainability claims were grounded in changed systems rather than changed narratives. More strikingly, only 32% disclosed any board-level awareness of whether their measures to address material impacts were actually working. Nearly seven in ten companies had governance structures that could not tell their own boards whether their ESG programs were effective.

This is the ESG paradox in numbers: enormous investment in disclosure frameworks, and almost no investment in the feedback loops that would tell you whether anything is actually changing on the ground.

---

---

The Urban Nexus and Policy Effectiveness

The urban nexus makes this paradox especially visible, because cities are where infrastructure and practice collide most densely and most consequentially. Urban buildings account for a substantial share of global energy consumption. Urban mobility systems determine transport emissions. Urban water infrastructure determines resource efficiency. Urban supply chains link global production to local consumption. In every one of these domains, the question of ESG policy effectiveness is not primarily a question of how well companies report — it is a question of whether the infrastructures that govern everyday urban life are changing in ways that make sustainable practices normal, convenient, and default.

Because of that structural diagnosis, the direction of a more effective ESG approach becomes clearer — and more demanding.

What Watson and Shove’s infrastructuration framework implies for policymakers, investors, and sustainability leaders is this: interventions that want to change resource use must engage with the recursive loop, not just one side of it. It is not enough to mandate disclosure. It is not enough to set a carbon price. It is not enough to publish a net-zero roadmap. Durable change requires intervening at the points where infrastructure and practice are co-produced — the design of buildings, the configuration of transport systems, the default settings of procurement platforms, the incentive structures that govern facility management, the urban planning codes that determine what kinds of mobility are possible at all.

These are the change points that actually matter. They are the junctions where top-down policy meets bottom-up behavior, where investment in physical systems shapes what millions of people do every single day without thinking about it, where the difference between a sustainable future and a well-reported but unchanged present is actually made.

The DEMAND Centre’s research program, from which Watson and Shove’s work emerged, was built around exactly this insight: that end-use energy demand is not a simple function of technology or price signals, but of the social and material organization of everyday life. Change the organization, and demand changes with it. Leave the organization intact, and demand is sticky in ways that no amount of reporting will shift.

---

---

Where Change Actually Happens

For ESG investors, this reframes the due diligence question. It is not enough to ask whether a company has an ESG policy. The more incisive questions are: Has this company mapped the everyday practices through which its operations consume resources? Has it identified the infrastructures — internal and external — that make those practices stable? Has it intervened at the points where those infrastructures could be redesigned to make sustainable practices the path of least resistance? And — given that only 32% of large European companies even disclose board-level awareness of ESG effectiveness — is the governance structure capable of knowing whether any of this is working?

For policymakers, the urban nexus framing adds a further layer of urgency. Cities are not just sites where sustainability policy is implemented — they are the infrastructure through which the practices of billions of people are organized. Urban planning decisions made today will shape energy demand, mobility patterns, and resource consumption for decades. The recursive logic of infrastructuration means that getting urban infrastructure right is not a downstream implementation detail — it is the central lever of ESG policy effectiveness at scale.

Until finally, the logic of infrastructuration offers something that most ESG frameworks have conspicuously lacked: a theory of where change actually happens.

Not in the boardroom, though governance matters.

Not in the disclosure report, though transparency has value.

Not in the rating, though accountability creates pressure.

Change happens at the intersection of systems and practices — at the moments when the physical, institutional, and social organization of resource use is renegotiated. These moments are specific, locatable, and, crucially, designable. They are the change points through which sustainable transformation moves from aspiration to embedded reality.

The research from Watson, Shove, and the DEMAND Centre does not make this easy. Intervening in the recursive relationship between infrastructure and practice requires understanding that relationship in granular detail — which practices are consuming which resources, through which infrastructural pathways, stabilized by which norms and incentives, across which urban geographies. It requires the kind of operational and systems-level data that most ESG frameworks have not yet learned to ask for.

But that data exists. And the analytical frameworks for making sense of it — frameworks grounded in social practice theory, urban infrastructure research, and the hard-won lessons of the DEMAND Centre’s years of policy-relevant work — are more developed than most ESG practitioners realize.

The failure of top-down ESG to deliver on its promises is not inevitable. It is a design failure: the failure to engage with the everyday human systems through which resource use is actually organized. The urban nexus ESG policy effectiveness question — how do city-level infrastructures and everyday practices interact to determine whether sustainability commitments translate into real-world change — is not a niche academic concern. It is the central question that the field needs to answer if ESG is to mean anything beyond disclosure.

The evidence on the gap is clear. The theory of change is available. What has been missing is the data infrastructure to connect them — to map the policies, interventions, and system-level changes that have actually moved the needle on sustainable practice, and to make that evidence accessible to the investors, policymakers, and sustainability leaders who need it most.

---

Ready to put this into practice? 

You now know why these behavioral shifts happen.
But what are you going to do about it on Monday morning?
Don’t let these insights become just another bookmark you never revisit.
Stop leaving your conversion and retention rates to chance, and equip your team with the exact blueprints that drive real action.

• Singapore Finally drinks “Good Toilet Water” — 80% consume Reclaimed NEWater
• Seven Incentives That Rewired Norway’s Car Culture
• What Zaragoza’s Smart Water Meters Tell Us About the Limits of Information
• The Lessons of Ethiopia’s Clean Cookstove Program
• 90% in Weeks: The Ireland Plastic Bag Tax and the Behavioral Science of Making the Right Thing Feel Different