ESG

ESG is not primarily a reporting requirement. It is a leadership discipline. Companies that succeed with ESG are those that anchor the work in strategy, operations and decision-making — not those that treat it as a compliance exercise.

What is ESG?

ESG is a framework for how companies work with sustainability, responsibility and governance. The concept originated in the investment community as a tool for assessing companies’ long-term risks — and has since become a central element of strategic leadership in many organisations. The three dimensions: E — Environmental. The company’s impact on climate, resources and ecosystems: carbon emissions, energy consumption, waste management, material sourcing. S — Social. Relationships with employees, suppliers and society: working conditions, diversity, human rights, responsible supply chains. G — Governance. Leadership structures and control mechanisms: board composition, compliance, risk management, ethical guidelines. The three dimensions are closely interconnected in practice. ESG is not three separate reporting tasks — it is one integrated leadership discipline.

Why ESG has become a leadership responsibility

A few years ago ESG was primarily relevant for listed corporations. Today it affects a much broader range of companies — driven by three factors: Regulation. The Corporate Sustainability Reporting Directive (CSRD) significantly expands disclosure requirements, affecting thousands of companies across Europe — including many mid-sized organisations. Investors and access to capital. ESG data is increasingly used in credit assessments and investment decisions. Companies without credible ESG documentation face higher capital costs. Customers and supply chains. Large organisations increasingly impose ESG requirements on their suppliers. Being part of an international value chain today requires documentation of carbon footprint and social standards.

Why implementation is often difficult

Most organisations understand the need. Fewer succeed with implementation. Three structural challenges recur: Cross-functional data and accountability. Environmental data sits in operations. Social data in HR. Governance in legal and executive leadership. ESG requires coordination across functions — and unified ownership that rarely exists from the outset. Prioritisation in a complex field. ESG potentially covers hundreds of indicators. Double materiality analysis — an assessment of what is material for the business and for the outside world — is the starting point for meaningful prioritisation. Insufficient leadership ownership. ESG initiatives placed within a sustainability team without strategic authority lose momentum. Implementation requires anchoring in executive leadership and the board.

Explore ESG in depth

We have gathered knowledge on the most important ESG topics:

• ESG implementation — how organisations translate ESG strategy into concrete changes in operations and processes.
• ESG reporting and governance — CSRD, materiality analysis and board responsibility.
• ESG in regulated industries — specific requirements and challenges in finance, life science, energy and defence.

Interim management and ESG implementation

In situations where ESG implementation requires leadership capacity the organisation does not have internally — during major transformations, new reporting requirements or implementation under time pressure — some companies appoint an experienced interim executive. An interim leader can establish ESG governance structures, coordinate cross-functional implementation and ensure progress — for a defined period with a clear mandate. Read: guide to interim management.