Finance Monthly. 28 Business Michael, how has your journey in executive coaching intertwined with the increasing emphasis on ESG principles in today’s corporate landscape? My motivation for training as an executive and leadership coach came out of my recognition that organisational transformation is heavily premised on the CEO’s and leadership team’s perspectives, values and beliefs. If the head of the organisation is looking in one direction while the organisation is trying to move in another, then progress is unlikely. In my experience, the vast majority of senior leadership and board members are significantly ill-prepared and ignorant of the consequences that global warming, climate change and the resulting environmental and social changes are going to have on their businesses. For example, during a recent training session with board members, 20% of them thought that coal was a renewable resource. Coaching creates a safe space for discussion of difficult topics, including environmental, social and governance (ESG) issues. A coaching session that focuses on ESG may initially be more of a mentoring session that lays the foundation for the executive to deepen their understanding and enable more sustainable options and decisions Are ESG and sustainability one and the same concepts, as they are often used interchangeably? ESG and sustainability are two distinct concepts and should not be used synonymously. ESG has its origins in a United Nations’ Principles for Responsible Investment (PRI) publication from 2005 that used ESG as the basis for a risk management and due diligence process to assess the ESG risks faced by an organisation that could materially impact its value. Sustainability first emerged in the 1980s and addresses the impacts of an organisation on the external environmental, economic and social dimensions. Sustainability is often summarised as the triple bottom line of people, planet and profit. Counterintuitively, an organisation could meet ESG risk criteria while still being unsustainable, while the reverse is unlikely. How do you perceive the role of ESG in change management and transformation? All organisations, and I mean all, are going to be impacted by climate change and the resulting changes in economic markets and global society. Organisations that actively engage with these risks and opportunities will be better prepared to survive and thrive in the years to come. By way of an example, the younger generation Z entering the labour market are giving preference to organisations that can demonstrate their sustainability credentials. This younger cohort understand that climate change is existential and do not want to work for misaligned organisations, so the fight for talent is becoming linked to your ESG credentials. Organisations that choose to ignore ESG considerations as part of a transformation programme will face greater challenges and performance headwinds. Can you describe a pivotal moment in your coaching career where ESG principles significantly influenced the direction or outcome of a transformative process? Part of the social dimension of ESG is diversity, equity and inclusion (DEI). During a recent project initiation meeting, I noticed that the team lacked diversity. Understanding “All organisations, and I mean all, are going to be impacted by climate change and the resulting changes in economic markets and global society.”
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