Can ESG drive a true competitive advantage?

In the world where ESG concerns are more pressing than ever, investors and companies have no choice but to pay attention to their ESG performance and risks. According to McKinsey, studies show that strong ESG performance is positively correlated with higher equity returns and reduction in downside risk.

What we also see is that consumer desire to support initiatives that drive positive change for the environment is growing around the world; according to the Mastercard Economics Institute, consumer donations to environmentally focused charities grew 48.4% globally in 2022 while compared to pre-pandemic 2019 levels.

Simultaneously, around the world large companies are facing an unprecedented level of scrutiny on ESG performance. According to PWC study 87% of investors think that corporate reporting on sustainability contains greenwashing, and 82% say their clients demand that ESG factors are taken into account.

So, how to act on ESG in a way that will be free from being judged as greenwashers, or pinkwashers?

How to do it well and translate it into a competitive advantage?  What is most important from the marketers' point of view?