ESG’s - why companies also do their new year’s resolutions

The business license to operate is a more complex size than it used to be. It is no longer enough to mind the bottomline - you have to navigate the triple bottom line.

In 2004 a joint initiative of financial institutions, at the invitation of the UN, created a framework for investment that acknowledges this complexity: The ESG. This stands for Environmental, Social and Governance. The report stated: Who cares win. Today, this statement is closer to the truth than it was then and the modern and global leader cannot have this understanding in their toolbox.

On February 11th 2025, the Gallery Seoul kicked off the new year focusing on just that: Sustainability in a corporate setting. Nicola Weir, Partner at Deloitte and with more than 20 years of experience an expert on sustainability and business transformation.

In the following article we share the essence of the talk and a line of resources for you who want to dig deeper into the sustainability agenda.

The Urgency of Sustainable Practices: A Critical Turning Point

Our current consumption patterns are simply unsustainable. To illustrate this crucial point, imagine a stage representing the Earth's capacity to support its population. Eight individuals initially occupy the stage, representing the current global population in billions. Adding two more individuals represents the projected population by 2050. However, with our current consumption rates, the Earth can sustainably support only three billion people. This leaves seven excess individuals on the stage, vividly illustrating the urgent need for change. Ignoring this reality carries significant and growing risks for businesses.

The High Cost of Inaction: Financial Repercussions

Contrary to believe; the cost of inaction far outweighs the investments required to address sustainability challenges proactively. An unstable world, marked by climate-related disasters, resource scarcity, and evolving consumer preferences, creates immense financial vulnerabilities for businesses. The potential impacts are considerable: significant sales drops, complete production shutdowns due to employee inability to reach work or damage to facilities, severely disrupted supply chains, and unavoidable price increases. Meaning sustainability should be part of the modern leaders vocabulary.

Double Materiality: Understanding Interdependence for Proactive Risk Management

A cornerstone of effective sustainability strategies is the concept of "double materiality." Businesses must not only understand their impact on the planet and society (their environmental and social footprint) but also how environmental and societal factors influence their business operations.

This two-way relationship is critical for proactive risk management. By conducting thorough scenario-based risk analyses, companies can identify potential threats and opportunities associated with sustainability challenges and develop effective mitigation and adaptation strategies. This comprehensive approach is no longer a "nice-to-have"; it's a fundamental aspect of modern leadership and should be included in every leader’s essential tool kit.

Transforming Sustainability from "Nice to Do" to "Necessary for Success"

Acknowledging the above that sustainability is no longer a nice-to-do initiative, but a strategic imperative for long-term success it is required to focus on tangible financial incentives. For price-competitive businesses, this means prioritizing risk mitigation – avoiding fines, operational disruptions, reputational damage, and ultimately, ensuring a company's long-term survival. For other businesses, the emphasis shifts toward building brand value, fostering a positive work environment that attracts and retains top talent, and demonstrating a commitment to positive social and environmental impact. Meaning, as advocates for sustainability whether as an NGO, external adviser or the ESG department internally you need to find the relevant financial pressure points.

Regardless of the specific industry or business model, the reality is that consumers increasingly demand sustainable products and services. This growing consumer preference creates considerable market pressure, driving significant change and making sustainability a key factor for success.

Embracing a New Economic Framework: Governmental Support and Holistic Integration

Successfully integrating ESG principles across the entire value chain—from operations to supply chain to marketing and beyond—is paramount for long-term success. This holistic approach not only safeguards against accusations of "greenwashing" but also ensures sustainability becomes deeply embedded within the company's strategic and operational core.

Frameworks like Doughnut Economics offer valuable models for designing business strategies that support both human well-being and planetary health. The framework serves as inspiration for both business leaders, NGO’s and governments. Within is presented the concept of 7 ways to think more sustainable as a leader.

This framework perfectly sums up the essence of the talk and thereby this article. That sustainability is no longer a niche agenda but something you as a leader should consider throughout your governance chain. It is good for business and it is absolutely necessary for the world. We wish you luck applying the 7 ways as a new lens to business: