Sustainability Isn’t “ESG.” It’s Unpriced Financial Exposure. You’re Running an Economics 3.0 Business on Economics 1.0 Systems

The evolution to the intangible (including sustainable) economy.

 We’ve evolved through three economic eras, but most companies are still managing and reporting as if it’s the first.

Here’s the business case in plain terms:

Economics 1.0 — The Industrial Era

Tangible assets = enterprise value.

Value was centered on physical production, infrastructure, and labor efficiency. What mattered was visible and measurable: machinery, inventory, capital.Management systems were linear and siloed — and traditional financial reporting was largely sufficient because most value sat on (or near) the balance sheet.

Economics 2.0 — The Digital / Knowledge Era

Value shifted to include intangibles (which include what is termed sustainable)… but measurement didn’t.

Brand, innovation, environment, people, data, IP, talent, trust, and relationships became dominant value drivers — especially as globalization and services scaled.But companies kept running on management systems designed for tangibles. Sustainability and ESG emerged, yet were typically handled as separate disclosures — a side report, a dashboard, a narrative.

Economics 3.0 — The Whole Systems Era

Value is systemic — and the system is now interdependent.

The economy, environment, humans, and enterprise performance are no longer separable. And depending on the sector, 70–90% of enterprise value is now driven by intangible and sustainability-linked drivers — governance quality, supply-chain resilience, regulatory exposure, workforce stability, brand trust, and more.

That’s the shift:

Intangible risk is financial risk.

It affects growth, resilience, revenue, cost of capital, operational continuity, and valuation — whether or not your systems can see it.

What has to change

Most companies are trying to manage Economics 3.0 using tools built for Economics 1.0, with bolt-on reporting from Economics 2.0.

That gap is now dangerous.

In the whole-systems era, business management and disclosures must become:

• Integrated (sustainability + operations + finance as one value system)

• Dynamic (not static snapshots)

• Decision-useful (tied to performance, risk, and the P&L)

• Audit-ready (investor-grade, not narrative-grade)

This is exactly why global standards are converging — driven by groups like the IFRS and the International Sustainability Standards Board — toward disclosure that connects sustainability issues to enterprise value and risk.

Economics 3.0 doesn’t need more storytelling.

It needs intelligence.

Where Sustainability and Intangibles Become Intelligence — because financials only tell part of the story.

If you’re a CFO, operator, investor, or sustainability leader: what percentage of your enterprise value drivers are you actually measuring and managing today?