ESG is on the Agenda. Integration is Lagging. That's a Leadership issue.
By Suzie Thoraval
Why adaptive stability is becoming essential for leaders who want to build long-term value and trust
“Someone is sitting in the shade today because someone planted a tree a long time ago.”
A senior leader said to me recently:
“I know ESG matters. But if I’m honest, I don’t always know where I can find the time when I’m dealing with daily pressures.”
I often hear this when leaders talk about making time for those important, strategic initiatives that create long term value.
Environmental, social and governance (ESG) is now widely discussed.
Some organisations have formal strategies or statements and investment is increasing. Many are preparing for the new mandatory climate-related disclosure requirements commencing from January 2025 applying across Australia to companies above certain size thresholds.
Expectations from boards, investors, employees and communities are rising.
And yet in practice, ESG is often treated as something separate from core decision making, strategy, risk and performance. It is discussed, reported, funded. But it is not always woven into everyday leadership decisions.
That is where the real challenge lies.
What do we actually mean by ESG?
At its simplest, ESG is about how organisations create value over time.
Environmental considerations include climate and nature impact, resource use and resilience.
Social considerations include workforce wellbeing, community impact and supply chain responsibility.
Governance covers decision making, transparency, accountability and risk oversight.
Taken together, ESG prompts us to ask:
Will this organisation still be trusted, viable, valuable in ten or twenty years’ time?
That is not a sustainability team question. It goes to long-term organisational strength and trust.
Yet in many organisations ESG still sits beside strategy rather than within it. It is discussed after major decisions rather than helping to shape them. It is owned by a sustainability function rather than shared across leadership.
Until that changes, progress will be slow:
Decisions are often made without considering longer-term consequences
Issues emerge later but at greater cost
Responsibility for ESG is concentrated in one team rather than shared across leadership and
Leaders are often unsure how ESG connects to their role.
Why this is becoming more pressing
Three shifts are bringing ESG into sharper focus:
Expectations are rising. Communities, employees and investors increasingly expect organisations to consider environmental and social impact alongside financial performance.
Risk is changing. Climate, nature biodiversity, supply chain, workforce and reputational risks are now core business risks.
Regulation is catching up. In Australia, climate-related financial disclosure requirements will begin applying to many large organisations over the next few years. These will bring environmental risk and governance considerations more directly into mainstream reporting and oversight.
But we shouldn’t think of ESG as only about compliance. It is about long-term organisational strength.
Recent global research shows most organisations are now investing in sustainability and ESG initiatives. Deloitte’s 2025 C-suite Sustainability Report found 83% of executives increased sustainability investment in the past year. Yet far fewer have embedded it into core strategy and operations.
This suggests the challenge is no longer awareness or intent. It is integration. It’s ensuring ESG informs everyday decision making, risk management and long-term strategy rather than sitting alongside them.
When ESG is treated as separate
When ESG sits outside mainstream strategy:
Short-term decisions accumulate without full visibility of longer-term risk
Opportunities for innovation are missed
Stakeholder trust erodes
Responsibility is pushed to one team rather than shared across leadership
Reporting may increase, but meaningful change is limited and
Leaders find themselves reacting to issues rather than anticipating them.
Over time, this creates fatigue and scepticism. ESG is seen as a burden rather than a driver of value. If this happens, the potential consequences to erode trust are serious.
When compliance isn’t enough
In 2020, Rio Tinto detonated explosives that destroyed ancient rock shelters at Juukan Gorge in Western Australia to expand an iron ore mine. The sites were 46,000 years old and held profound cultural, spiritual and archeological significance to the Puutu Kunti Kurrama and Pinikura Traditional Owners. Approval had been given under outdated WA heritage laws. On paper, it was compliant.
Yet the decision triggered global outrage, parliamentary inquiry and the resignation of senior executives, including the CEO. Trust in the company was deeply damaged and relationships with Traditional Owners severely affected.
The lesson was clear: legal compliance does not equal responsible leadership.
Social licence to operate depends on judgement, engagement and foresight; not process alone.
This is a stark example of how ESG risks often sit at the intersection of strategy, culture, governance and judgement. They cannot be managed effectively if treated as a separate stream of work.
How adaptive stability helps
So how do leaders keep long-term responsibility front-of-mind when immediate pressures are constant? This is where adaptive stability becomes critical.
Think of a lighthouse: the horizon represents long-term value in an organisation that is trusted, resilient and able to perform sustainably over time.
The conditions around us are constantly changing: market pressures, stakeholder expectations, regulatory shifts. We cannot control them, but we can guide our organisations through them.
Leaders need to be steady and keep an eye on their direction, while being adaptable enough to respond to changing conditions.
In relation to ESG, that means:
Keeping long-term value in view while delivering short-term results
Balancing performance with responsibility
Responding thoughtfully rather than reactively and
Sustaining momentum even when priorities compete.
Without these practices, ESG becomes either a compliance exercise or an aspiration that fades under pressure.
With it, ESG becomes part of how leaders think and decide.
What this looks like in practice
Integrated ESG can be practiced in everyday decisions:
A procurement choice that considers long-term supplier practices rather than just price
A risk discussion that includes environmental, nature or social risks alongside financial risk discussions
Ensuring major decisions consider longer-term implications
Encouraging teams to think about trust and reputation as strategic assets
Asking, consistently, “how will this decision be viewed in three to five years (financially, operationally and reputation-wise)?”
These small shifts accumulate. They move ESG from a separate aspirational agenda to part of how the organisation operates.
Questions for leaders
Ask yourself:
How integrated are environmental, social and governance considerations in our core strategy?
Do we treat ESG as a compliance requirement or as a driver of long-term value?
Who owns ESG in practice in our organisation? Is it one team, or all leaders?
Where might short-term pressure be narrowing our perspective?
What would it mean to lead as stewards rather than just operators?
A final reflection
Most leaders today are operating in environments of sustained pressure and complexity. The task is not to add another layer of work.
It is to lead in a way that ensures what we build today remains strong and trusted in the future
Adaptive stability helps leaders to keep their eyes on the horizon even as conditions change and light the way for their organisation to create long term value.
The next time you are involved in a decision, ask: What would it look like to lead this decision with both immediate performance and long-term value in view?
That will help us practice adaptive stability. And move ESG from a separate agenda to part of how we lead.
