As Australian investors and consumers put increasing pressure on businesses to be transparent when it comes to climate reporting, resource efficiency, supply chain ethics and community impact, having a clear Environmental, Social and Governance position is evolving from a peripheral concern to a core business priority.
This is especially the case in the manufacturing, resource and construction sectors, which face constant pressure from internal stakeholders, customers, industry competitors, the community and government regulators.
Getting ESG right starts with understanding what it is, creating a strategic position and ensuring it is implemented and monitored. For this to happen, support is required at a board and leadership level.
ESG is no longer a theoretical exercise or a tick-box for reporting season. It’s evolving into a practical, business-wide lens for decision-making that blends ethical responsibility with positive commercial outcomes.
Future-focused organisations have moved beyond static frameworks to embed ESG into day-to-day operations. That means integrating environmental goals and labour standards into supply chain processes and applying governance principles like transparency and accountability at every level of the business.
Leadership always plays a central role in setting the tone, but the real shift now is towards creating cross-functional teams that can turn ESG from strategy into action. The most effective ESG programs are shaped through small, practical shifts that work with existing processes rather than against them.
When ESG is approached in this way, it becomes a meaningful part of business as usual. Strategy is aligned with operations, progress is transparent and measurable, and the outcomes deliver value to all stakeholders.
ESG efforts must be visibly led from a senior level in order to be taken seriously and gain traction across the business.
Delegating ESG to compliance teams or communications departments can help ensure activity and some accountability, but boards and executives should be able to understand and communicate the value drivers of the framework, its progress and its challenges.
Leadership accountability goes beyond press releases and positive statements on the website. Leaders and board members should play a visible role in:
Whether it's emissions reduction, workforce diversity or governance integrity, true accountability begins when leaders take direct ownership of ESG outcomes.
In highly scrutinised industries such as construction and resources, the absence of strong leadership or lack of visibility around ESG can damage credibility. On the other hand, C-suite executives who lead with intent go further to build a level of trust which translates into stakeholder support, positive reputation within the market and a more sustainable business.
Customers, suppliers, regulators, employees, local communities and minority groups can all be stakeholders when it comes to ESG.
Engaging these people early and often allows organisations and leaders to understand which ESG issues are most relevant and visible. In a simple example, a mining company may find local water use is the top concern for nearby communities, while investors are more focused on transition planning and carbon disclosure. Listening to both helps set balanced priorities that reduce risk and build goodwill while covering all elements of a comprehensive ESG framework.
Managing expectations requires initial, ongoing and transparent communication. Rather than promising the impossible or delivering in the wrong areas, it is important to interact with stakeholders where possible, ensure they are educated about limitations and best practices, and involve them in strategic decisions. This is intuitively high risk to a majority of mid sized businesses we work with, but in reality it always either creates positive outcome or assists in mitigating existing risks for the business
ESG will align with stakeholder expectations when it is thoughtfully developed, integrated into the business's overall strategy and tracked against factors such as performance, growth and innovation.
For example:
Staying a step ahead presents a powerful opportunity to build a more positive reputation, engage with external stakeholders on a more meaningful or commercially-driven level and drive future strategy and innovation.
ESG is becoming a test of leadership as much as revenue growth and people management. Australian companies operating in complex and high-impact industries are expected to lead from the front and earn trust by setting a new trend for deliberate, leader-championed policies.
If you’re in a leadership role, can you answer questions about your company’s ESG with confidence? If not, it’s worth checking in with C-suite peers as well as internal stakeholders, then reaching out to an ESG specialist who can help you align your business with current expectations.