6 leadership principles for transitioning into an ESG world

Throughout the past ten years, the rise of ESG within the corporate landscape has been truly remarkable.

And the momentum behind corporate action in ESG matters continues to grow – and for good reason. ESG is vital in addressing the global challenges we confront today, from imminent climate and ecological dangers to the need for heightened social justice and inclusivity.

Despite reports indicating a nearly 6% decrease in the significance attributed to ESG by investors in 2023 compared to the previous year, the necessity for corporate leaders to enhance their ESG strategies is long overdue.

This urgency is exacerbated by the prevalent issue of greenwashing, where companies use buzzwords like 'ESG' or 'sustainable' without actually implementing the associated practices, say Duke Corporate Education's Sharmla Chetty (CEO) and Andrés Saint-Jean (Head of Digital, Partnerships, and ESG Leadership Academy).

"Focusing on leadership, it is imperative to be guided by a genuine sense of purpose and to ensure that meaningful action is taking place," they say. "In this context, it is essential for businesses to demonstrate the sincerity and effectiveness of their ESG efforts."

ESG’s impact

ESG relies on businesses stepping up and addressing societal and environmental issues, while reflecting on how their purpose can promote positive social impact. ESG's rise has been propelled by factors including calls for diversity, equity, and inclusion, consumer demand for sustainability, employees considering company purpose when choosing employers, and pressure from the government for more sustainable practices.

The transition may seem overwhelming at first, but embracing change is vital in an ever-changing landscape.

A study from the Boston Consulting Group shows that many leaders labour under the false impression that 'there must be a trade-off between doing good for society and the planet, and delivering returns to shareholders, but studies consistently show a strong positive correlation between companies’ commitment to environmental, societal and governance concerns'. 

While the obvious approach would be to develop a strategy and set smart initiatives, Chetty and Saint-Jean challenge you to instead put your skilled workforce at the forefront of the transition.

Here, they outline six key principles of beliefs for successful ESG transformation.

Six core ideas to drive ESG transformation

1 Embed purpose from the top down

C-suite executives need to be the ones to lead the charge on integrating ESG within their business and must lead through the lens of purpose. They should be prepared to converse on topics such as purpose, diversity, equity, and inclusion.

2 Empower your managers

Managers should have a strong understanding of ESG topics relevant to their positions, but more importantly, the ability to influence others. While it may be easy to convince managers, they might need to find more ways to encourage their teams and influence behaviours.

3 Address critical mindsets

To make lasting changes in behaviours, your capability-building program must take into account critical mindsets. Embracing a new mindset is crucial for success, and it requires being able to reflect on past decisions and envision a multitude of future outcomes. We are always in a constant state of change, and it’s important to be open to the many opportunities it presents.

4 Work your way down

Research has shown that success in your ESG transformation is heightened when around 30% of the workforce is exposed to the change. A shift in culture is vital for the success of an ESG transformation, so being able to communicate ideas throughout the organisation is beneficial for the transition.

5 Measure success by impact

The success of your programme should be measured by impact, and in order to make an impact, you should follow the idea of 'learn, experience, and act.' Learn by gathering important information, gain experience through team exercises, and act by making sure that what’s learned results in actionable behaviours.

6 The importance of collaboration

A proactive approach to collaboration is vital in continuing the success of ESG transformations. It’s important to help your partners follow the same changes, keeping the idea in mind that 'your emissions are my emissions'.

At Duke CE we are taking on the task of enhancing the links between the business world and society through our latest initiative, the ESG Leadership Academy. We recognise that the shift towards an ESG-focused environment requires a robust, leadership-driven approach, rooted in outstanding leadership principles and a dedication to unleashing the potential of purpose.

In a world increasingly dominated by demands for sustainability and social responsibility, embracing ESG transformations is not just a choice; it's a strategic imperative that will future-proof your organisation. The myriad of opportunities and possibilities it offers empowers businesses not only to endure and remain successful but to thrive in an ever-changing landscape.