There’s no shortage of conversation around ESG—boardrooms are full of talk, frameworks, and glossy reports.
But according to Rajeev Peshawaria, CEO of Stewardship Asia Centre and author of Sustainable Sustainability, something vital is missing.
Intent isn’t translating into action. ESG, he says, too often becomes a compliance tick-box rather than a strategic driver of real change. Rajeev Peshawaria urges leaders to shift focus—from external pressure to intrinsic purpose—and to reframe ESG as a long-term value proposition, not a short-term cost.
Why do many boards still struggle to prioritise ESG despite growing stakeholder expectations?
Because they’re still treating ESG as a compliance issue, not a strategic growth opportunity.
Many boards intellectually understand that the world is changing: climate risks are escalating, supply chains are being redefined by ethics and transparency, and consumers (especially younger ones) are voting with their wallets. Yet, when it comes to making bold capital decisions or rethinking core business models, there’s still a hesitancy to act.
This gap stems from a deeper issue: a mindset stuck in 20th-century shareholder primacy.
Take the fossil fuel industry. Despite mounting evidence and pressure, many oil and gas boards continue to prioritise short-term shareholder returns over long-term energy transition. Just look at Shell’s recent decision to scale back its carbon targets while simultaneously increasing shareholder payouts. This signals to the market and to future generations that old habits still die hard, even when the writing is on the wall. They struggle to prioritise ESG because they fail to see it as a core driver of profitability and long-term success, rather than just a compliance checkbox or a short-term cost.
Boards must ask themselves: Are we still measuring success only in quarters? Or in generations?
Boards will only prioritise ESG when they deeply internalise that long-term profitability and societal value creation are not at odds, they are inextricably linked. ESG is not a distraction from profit, but a prospective engine for growth. In today’s world, driven by existential challenges like climate change, social inequality, and resource scarcity, those who don’t integrate ESG into their strategic framework are at risk of falling behind. Steward Leaders reject zero-sum thinking and recognise that their business success is inextricably linked to the well-being of the planet and its people.
How can leadership narratives on ESG move beyond ambition and into accountability?
It begins with a clear articulation of Steward Leadership purpose, followed by disciplined execution and radical transparency. Why do we exist? Who are we creating value for, and how? Once this purpose is defined, everything must align: strategy, KPIs, talent systems, incentives, and even capital allocation.
Steward Leadership is the means by which E&S sustainability becomes a driver of profitable growth.
Look at Unilever: former CEO Paul Polman famously abolished quarterly reporting to focus on long-term value creation. Unilever’s Sustainable Living Plan, for all its imperfections, helped embed sustainability into brand architecture, from Dove’s Real Beauty to Lifebuoy’s hygiene programs. And because ESG was tied to commercial strategy, it delivered: by 2018, Unilever’s “sustainable living brands” were growing 69% faster than the rest of the business.
What signals that ESG is a strategic narrative in an organisation—rather than a compliance checkbox?
A good litmus test is how ESG shows up in tough moments. When faced with cost pressures, does sustainability get cut or defended? When geopolitical events challenge supply chains, does human rights due diligence get waived or strengthened?
Patagonia is a classic example. ESG isn’t a marketing line, it’s the business model. When they famously ran ads saying “Don’t Buy This Jacket,” they were redefining consumption patterns and building brand loyalty through values. Today, they remain privately held, but in 2022, founder Yvon Chouinard legally transferred ownership of the company to a trust that directs all profits to climate causes, a bold move that proves ESG was never a bolt-on.
When ESG is strategic, it shows up not in how companies talk, but in what they do when it’s hard. And this conviction drives their ultimate commercial success.
Read more: Red Havas’ Matt Thomas on meaningful brand frameworks
Why is a reward-and-punishment model not enough to drive long-term ESG behaviour?
Because behaviour driven by extrinsic factors is fragile. True transformation comes from intrinsic motivation.
Steward leaders are just as ambitious for performance and results as any other leaders, but they choose to earn their returns by directly addressing environmental or social challenges. This is a conscious, values-driven choice rooted in intrinsic motivation, not external pressure or compliance.
A reward-and-punishment model can help set direction but it can’t sustain commitment. The moment the reward is unclear or the punishment unlikely, behaviour regresses. What we need is values-aligned leadership, where people act not because they have to, but because they believe in the mission.
This is why Steward Leadership matters. It is not about moral idealism, but about tapping into the deeply human desire to build something meaningful, and then giving people the compass to do so within complex systems.
Long-term ESG behaviour can’t be policed. It has to be lived through consistent values, courageous action, and visible alignment between talk and walk.
What framing helps leaders understand ESG as a performance driver—not just a moral obligation?
We must stop talking about ESG as a trade-off and start talking about it as a transformation driver. The right framing is simple but powerful: “Profit by purpose – not despite it.” When ESG is embedded well, it unlocks competitive advantage: lower capital costs, stronger brand equity, higher talent retention, and better risk management.
What happens when the G is used to patch over weak or vague E and S efforts?
You end up with elegant governance structures that do nothing – governance theatre.
Strong governance (G) is meaningless if it’s not connected to meaningful environmental (E) and social (S) action. It creates the illusion of accountability while allowing companies to dodge the hard work of transformation.
A good example is greenwashing scandals, like when firms tout net-zero pledges without changing energy mix, or use ESG indices to market portfolios full of fossil fuels. In many of these cases, governance exists on paper (with ESG committees, third-party audits, etc.), but there is no genuine intent to drive change.
Governance must not be a fig leaf. It should be the operating system that ensures E and S are treated as material strategic levers, not PR categories. Otherwise, it becomes risk camouflage.
Real G is about ethical leadership, decision integrity, and values-aligned accountability. Without those, even the best governance frameworks will collapse under public scrutiny or internal inconsistency.
For Rajeev Peshawaria, the ESG debate needs to move beyond surface-level ambition. As climate risks grow and social expectations rise, the cost of inaction will be far greater than the investment in doing things differently.
The challenge isn’t just one of policy or process—it’s a matter of mindset. Leadership grounded in stewardship, purpose and courage is what will bridge the gap between ESG rhetoric and lasting impact. And for Rajeev, that shift must begin now.
Adrianne Saplagio is a Content Producer at Comms Room, where she combines her passion for storytelling with her expertise in multimedia content creation. With a keen eye for detail and a knack for engaging audiences, Adrianne has been instrumental in crafting compelling narratives that resonate across various digital platforms.
