Disrupting ESG: How Global South innovation is making Northern compliance strategies obsolete

This article is part of an ongoing series examining human capacity as climate infrastructure — exploring how governance, innovation, and equity systems succeed or fail based on whether populations have the capacity to sustain them. You're reading part two. Here is part one.

ESG — Environmental, Social, Governance — was designed to expand corporate accountability beyond profit. The logic was sound: measure what matters, and behavior will follow. Companies now report carbon emissions, labor practices, board diversity, and supply chain impacts with unprecedented transparency.

Yet the framework itself carries a structural assumption that undermines its effectiveness: it treats environmental, social, and governance factors as separate domains to be optimized independently.

In practice, this means:

Environmental teams work to reduce emissions, source sustainable materials, and meet net-zero targets — often under intense pressure to demonstrate progress within tight timelines.

Governance teams ensure transparency, board independence, and ethical oversight — focusing on structures and processes.

Social teams report on workforce safety, diversity metrics, mental health benefits, and fair labor standards — measured primarily through compliance indicators.

The S pillar reveals the framework's deepest flaw. It measures compliance — are standards met, are incidents reported, are targets tracked? — but not capacity. It cannot tell you whether the people executing sustainability strategies have the bandwidth to do so on top of regular operational demands. A company can score well on S while its workforce is depleted, running contradictory mandates without either being adequately resourced.

Each pillar is measured, scored, and reported independently. This is not systems thinking. It is accounting. Companies compete for high ratings. Investors use ESG scores to allocate capital. Regulators increasingly require disclosure.

But here's what the framework cannot see: the three pillars are not parallel. They are interdependent.

When a company sets ambitious environmental targets without accounting for workforce capacity, it creates a predictable dynamic: employees are asked to execute transformation while maintaining business-as-usual performance. The result is not innovation; it is burnout, contradiction, and eventually, failure to meet the targets the framework was designed to track. Worse: it's a competitive liability. Companies optimizing within extractive models while their workforces deplete are building fragility, not resilience — and fragility loses to regeneration over time.

This is not a failure of commitment. It is a failure of design.

The framework assumes that if you optimize E, S, and G separately, the system will improve. But systems do not work this way. When human capacity depletes, environmental execution degrades. When governance structures ignore this feedback loop, strategies fail regardless of how well each pillar scores in isolation.

ESG's architecture treats people as infinite resources; the same assumption that climate accounting makes when it ignores human capacity depletion as an externality. Both frameworks measure outcomes while remaining blind to the constraints that determine whether those outcomes are sustainable.

The question is not whether ESG has driven progress. It has.

The question is whether a framework designed to measure compliance can enable the kind of systemic transformation required to operate within planetary boundaries while preserving social foundations.

Current evidence suggests it cannot. High ESG scores correlate with reporting quality, not regenerative capacity. Companies can demonstrate excellent compliance on social metrics while structurally depleting the workforce needed to deliver on climate commitments. The framework rewards this because it cannot measure what it does not recognize as connected.

Why regenerative models emerge outside ESG systems

The most instructive business models are not emerging from ESG leaders in the Global North. They are being built in contexts where the constraints are real, but the ESG frameworks are rarely the starting point.

In India, agricultural waste becomes affordable building materials that sequester carbon. Brazilian startups transform deforestation-threatened palm fibers into textiles. Colombian companies convert coffee waste into bioplastics. Vietnamese manufacturers use rice husks — previously burned, contributing to air pollution — as renewable energy and construction inputs. In Ghana, electronic waste is mined for materials while creating tech repair ecosystems.

These are not social enterprises grafting impact onto profit models. They are businesses where environmental restoration and economic value are inseparable by design. The "waste" or "problem" is the supply chain. Solving the environmental issue creates the product.

Why is this happening? 

Because of freedom from path dependency. When you design a business in a context without established extractive infrastructure — without legacy supply chains, without shareholder expectations built on infinite growth, without workforces already conditioned to optimize siloed KPIs — you are not constrained by the frameworks that created those systems.

You start from different questions:

Not: "How do we make our existing model more sustainable?"
But: "What business model solves an environmental problem while creating dignified work?"

Not: "How do we offset our supply chain emissions?"
But: "What if our supply chain restored ecosystems?"

Not: "How do we reduce harm?"
But: "How do we build capacity — ecological, human, economic — as the core business logic?"

Northern corporations are locked into systems optimized for extraction. Their factories, supply chains, investor expectations, and organizational cultures were built around growth-at-all-costs logic. ESG was retrofitted onto these structures; a reporting layer, not a redesign.

Regenerative businesses in emerging economies are not burdened by this legacy. They can design from first principles because the infrastructure of extraction was never fully established. The "problem" — lack of industrial capacity — becomes an opportunity: build capacity regeneratively from the start, rather than trying to transform extractive systems mid-operation.

There is a second, deeper reason these models emerge where they do: necessity integrates what wealth silos.

In contexts where ecological degradation, economic precarity, and social instability are immediate and interconnected, you cannot optimize one variable while ignoring the others. You cannot treat environmental health as separate from human health, or economic viability as separate from ecosystem health, because the feedback loops are too fast and too visible.

What looks like "innovation from the margins" is actually a structural advantage: businesses designed in contexts where integration was never optional are better positioned for a world where it no longer is.

This does not mean every startup in the Global South is regenerative, or that Northern corporations cannot transform. But it does mean that the competitive landscape is shifting in ways ESG frameworks cannot capture.

The question is not whether regenerative models can scale. It is whether extractive models optimized through ESG can survive once regenerative alternatives reach market maturity.

The Feminine hygiene industry as test case for regenerative disruption

How come a women-led startup in Kenya can produce a 100% biodegradable, compostable menstrual pad — from a regenerative source material, harvested by women — at a price point competitive with conventional alternatives? 

Consider the global menstrual product industry. Dominated by multinational corporations like Essity, Procter & Gamble, and Kimberly-Clark, the sector is worth over $40 billion annually.
It is also environmentally devastating. 

• 245,000 tonnes of CO₂ annually from menstrual products globally

• A single pad — up to 90% plastic — takes 500-800 years to decompose

• Manufacturing cost per pad: under $0.03 at scale, retails at 8-12x that

Over a lifetime, one person using disposable products generates approximately 150 kilograms of waste — most of it non-biodegradable, destined for landfills or incineration. Globally, billions of pads and tampons are discarded each year, contributing to ocean plastic, microplastic pollution, and persistent chemical contamination.

The industry's ESG leaders have responded with incremental improvements: organic cotton options, biodegradable packaging, carbon offset programs, sustainable forestry certifications for pulp sourcing. These efforts appear in ESG reports as progress. But the fundamental business model remains extractive: raw materials extracted from forests, processed in energy-intensive facilities, shipped globally, used briefly, and discarded.

Meanwhile, a small Kenyan company — GoGreenFlow — is manufacturing fully biodegradable menstrual pads from water hyacinth, an invasive aquatic weed choking waterways across East Africa.

In Kenya, where an estimated 65% of women and girls face period poverty, pricing parity is not a premium feature — it is baseline access. GoGreenFlow proves that regenerative models need not choose between affordability and impact.

The contrast with conventional industry practice is instructive:

Environmental restoration is the supply chain. Essity sources from certified sustainable forests — still extractive, just managed. GoGreenFlow removes invasive species that destroy ecosystems — restoration, not extraction.

Human capacity is built, not depleted. Workers are not executing contradictory mandates (profit targets + sustainability goals simultaneously). The work itself integrates purpose and profit. Turning invasive weeds into dignified products is meaningful by design.

Economic value circulates locally. Revenue supports wages, skills development, and reinvestment in production capacity. This is not global supply chain optimization — it is distributed economic resilience.

The product requires no compromise. Consumers are not choosing between affordability and sustainability. They get both. The "green premium" disappears when regeneration is designed in, not added on.

“GoGreenFlow is not built on parallel pillars - it is a single, interdependent system. Environmental restoration generates the raw material, women-led production creates trust and distribution, and the product drives the economic engine. Remove any one element, and the entire model breaks. Its strength lies precisely in this interdependence.”

– Katherine de Gaullier des Bordes, founder and CEO of GoGreenFlow

GoGreenFlow and models like it will eventually scale production, refine logistics, and expand product lines (diapers, wipes, hygiene products). Build partnerships, attract impact investment, and prove market viability. Water hyacinth proves adaptable to other geographies. The model replicates.

The questions facing Northern industry leaders are no longer theoretical: Can multinationals redesign supply chains built on plastic and forest extraction before consumers shift to regenerative alternatives that cost the same and work better? Can they write off billions in infrastructure investments and transition to distributed, restoration-based models while maintaining shareholder expectations built on extractive growth?

ESG frameworks have driven important progress. They created transparency where none existed, established baselines for accountability, and pushed sustainability into boardrooms worldwide. But transparency is not transformation. Measurement is not redesign.

The framework's fundamental limitation is structural: it rewards optimization within existing models, not the courage to build different ones.

John Elkington, who coined the Triple Bottom Line in 1994, issued a formal 'recall' of the concept in 2018. His critique was precise: companies had turned it into accounting — three separate scorecards to optimize independently — rather than using it as a transformation framework where People, Planet, and Profit shape each other as an integrated system. Accounting cannot produce transformation.

Companies can achieve exemplary ESG scores while remaining extractive at their core — sourcing from "sustainable" forests that are still forests being harvested, employing workforces under conditions that meet compliance standards but deplete human capacity, reporting strong governance while governing fundamentally unsustainable business models.

This worked when the consequences were distant, the feedback loops slow, and alternatives invisible. It no longer does.

Regenerative models emerging from contexts unburdened by extractive legacy infrastructure are proving that restoration and profitability are not trade-offs. They are design choices. GoGreenFlow is not unique. It is a signal.

The competitive landscape is shifting in ways ESG frameworks cannot capture. Companies designed to restore capacity — ecological, human, economic — as integrated system outcomes will increasingly outcompete those optimizing harm reduction within extractive paradigms. Because regenerative products will cost less over time, and align with what people increasingly want.

And once markets can be estimated, capital will follow. 

For established corporations, the question is no longer "How do we improve our ESG score?"

It is: "Can we transition to regenerative models before companies designed that way from the start replace us?"

For some, this transition may already be impossible. The capital locked into extractive infrastructure, the shareholder expectations built on infinite growth, the organizational momentum optimized for the old paradigm — these are not easily redirected.

But for those willing to see ESG not as the destination but as a business model canvas — a framework that reveals what to measure while demonstrating the limits of measurement itself — there is another question worth asking:

What would we build if we started from regeneration instead of retrofitting it onto extraction?

The answer is emerging. Just not where most are looking.

illuminem Voices is a democratic space presenting the thoughts and opinions of leading Sustainability & Energy writers, their opinions do not necessarily represent those of illuminem.