In 2021, Deloitte estimated that failing to act on climate change could cost the global economy as much as $178 trillion by 2070 (S. https://www.deloitte.com/global/en/about/press-room/deloitte-research-reveals-inaction-on-climate-change-could-cost-the-world-economy-us-dollar-178-trillion-by-2070.html). Although the study was published a few years ago, its findings remain highly relevant today, as climate-related risks continue to intensify and the economic consequences of delayed action become increasingly evident.
The message was clear: the greatest costs are often not the result of action, but of inaction.
While few project managers are responsible for global climate policy, the same principle applies to the projects they lead every day. Decisions that ignore environmental, social, and governance (ESG) considerations may appear less expensive in the short term. Yet over time, they can generate hidden costs that affect budgets, reputations, stakeholder trust, and long-term project success.
The question is no longer whether organizations can afford to implement ESG principles.
The real question is: can they afford not to?
The Hidden Cost of Looking Only at the Short Term
In project management, success has traditionally been measured through three key factors: scope, time, and budget.
Deliver the project on time, within budget, and according to requirements, and the project is considered successful.
But today’s projects operate in a much more complex environment.
Communities expect transparency. Employees expect fair treatment. Investors and customers increasingly pay attention to sustainability performance. Regulators are introducing new reporting requirements. Environmental risks are becoming business risks.
A project that ignores these realities may still meet its deadline, but can it truly be considered successful if it creates problems that emerge months or years later?
ESG encourages project teams to expand their definition of success and consider the broader impact of their decisions.
When ESG Risks Become Project Risks
Many organizations still view ESG as a separate reporting exercise rather than a project management tool.
In reality, ESG risks often become project risks.
Consider a few examples:
• A project faces community opposition because local stakeholders were not engaged early enough.
• A supplier is found to be violating labour standards, causing delays and reputational damage.
• Poor governance leads to a lack of transparency and weak decision-making.
• Environmental impacts are underestimated, resulting in unexpected compliance costs.
In each case, the project may have initially appeared efficient. However, the failure to consider ESG factors created additional costs, delays, and challenges later on.
The issue was not action.
The issue was inaction.
ESG Is Not About Compliance Alone
One of the most common misconceptions is that ESG exists only to satisfy regulations or reporting requirements.
In reality, ESG can improve the way projects are planned and delivered.
By integrating ESG considerations from the beginning, project teams can:
✔ Identify risks earlier
✔ Strengthen stakeholder relationships
✔ Improve decision-making processes
✔ Enhance organizational reputation
✔ Create long-term value beyond immediate project outputs
Rather than being an additional burden, ESG can become a framework for making more informed and resilient decisions.
From Risk Management to Opportunity Creation
The conversation around ESG often focuses on avoiding negative outcomes.
However, ESG is equally about creating positive opportunities.
Projects that consider environmental and social impacts can unlock innovation, strengthen collaboration, attract talent, and build stronger relationships with communities and stakeholders.
Organizations that integrate ESG effectively are often better positioned to adapt to changing expectations and emerging challenges.
In a rapidly evolving world, resilience is becoming one of the most valuable project outcomes.
A New Definition of Project Success
The future of project management is not about choosing between performance and responsibility.
It is about recognizing that the two are increasingly interconnected.
Successful projects are no longer defined solely by whether they are delivered on time and on budget. They are also evaluated by the value they create for people, communities, organizations, and the environment.
ESG provides a framework for understanding and managing that value.
A Call to Action
If the cost of climate inaction can reach trillions, what might be the cost of ignoring ESG in the projects we manage every day?
Conclusion
The greatest risks are not always the ones we can immediately see. Often, they emerge from decisions that overlook long-term consequences in pursuit of short-term gains.
ESG challenges project managers to think beyond traditional metrics and consider the broader impact of their work. By integrating environmental, social, and governance considerations from the beginning, projects can become more resilient, more responsible, and ultimately more successful.
Because in a world of increasing complexity, sustainable success is not achieved by reacting to problems after they occur—it is achieved by anticipating them before they do.
Short bio of the author(s):
Daniele Quadrellaro is a Strategy and Operations Specialist at the Future Food Institute, where he plays a cross-functional role in managing key projects such as Empower Women in Agrifood (EWA) and ESG4PM, alongside other initiatives. He holds a Master’s degree in Economics and Management of Sustainable Food Systems, as well as a Bachelor’s in Gastronomic Sciences, both from the University of Parma. He also completed an Erasmus exchange at Wageningen University & Research.
With a keen interest in entrepreneurship and innovation, Daniele won first place at the 2022 Techstars Startup Weekend Food Sustainability in Parma and received a special mention at the 2021 edition.
Passionate about food, Daniele views it as both endlessly complex and immediately accessible. To him, food is sophisticated pop.
Clarissa, born in Genoa but originally from central and southern Italy, is a nutritionist and pastry chef. A lover of nature, people and simple things, she believes that nutrition plays a fundamental role in creating a more equitable, healthier and more sustainable world. Fight against waste, sharing and consistency are its values; to be a drop in the ocean, her goal.
Only by restoring virtue to tradition and dialogue between cultures is it possible to innovate; the wisdom of our grandparents and research are the keys to leaving the world a better place!
Currently in charge of Education & Community Operation at the Paideia Campus in Pollica at Future Food Institute.