Sustainability Governance for Boards: Insights for Transformative Leadership
Leading sustainability from the top
As I prepare for the upcoming SMU-SID Directorship Programme module this May, I found myself reflecting—not just as a facilitator, but as a participant in the learning journey. Reviewing the 2024 cohort’s assessments reminded me that the role of boards in shaping the sustainability transition is not a matter of if, but how.
The course we deliver is intense and unapologetically bold. Developed with professionals who have partnered with boards across sectors and continents, it challenges directors to move beyond rhetoric and into action. It is about integrating sustainability as a strategic imperative—embedding it deep within governance, risk, culture, and purpose.
We’re fortunate to have faculty like Jayanth Bhuvaraghan, who led the Eye Mitra program at Essilor and showed what stakeholder value truly looks like: affordable, quality vision care to hundreds of thousands, while empowering over 3,000 micro-entrepreneurs. Amitava Guharoy and Shai Ganu also bring their rich board experience to shift perspectives: sustainability and ESG are not ‘nice-to-have’ but central to business strategy.
Participants echoed this transformation. Their words encapsulate the journey they’ve undertaken:
“Shift from treating ESG as a regulatory checkbox to using it as a strategic lever for innovation and resilience.”
“Boards must ensure that sustainability is integral to all decisions and reflects a balance between shareholder and societal priorities.”
“Stop being skeptical about sustainability. It is not a zero-sum game but a pathway to long-term success.”
I decided to structure their reflections along the Seven Principles of a Sustainable Company, offering a practical roadmap for governance and action.
Principle 1 – A Purpose Aligned with Positive Impacts
Purpose is not just a corporate slogan—it is the anchor for culture and decision-making. Participants stressed the need to cultivate accountability and stewardship at every level.
“Promote a culture of stewardship where decisions align with sustainability values and purpose.”
“ESG is not a checklist—it’s a driver of everything we do. It must flow from the board to the executive team and beyond.”
Projects that participants decided to implement:
Develop employee-driven innovation platforms for ESG ideas.
Align KPIs with sustainability goals and embed them in performance reviews.
Offer ongoing training to integrate sustainability into decision-making.
Use globally recognized frameworks for transparency and reporting.
Principle 2 – A Growth Strategy Aligned with Purpose
Sustainability must be a strategic lens through which growth is envisioned—not an afterthought. The cohort emphasized moving from siloed compliance to systemic integration.
“Move beyond siloed compliance approaches to integrate ESG into core decision-making processes.”
“Products need to be redesigned, not just recycled, to achieve true sustainability.”
“Sustainability needs to be on the board agenda through a governance structure. It’s about moving from compliance to creating enduring value.”
Projects that participants decided to implement:
Conduct regular double materiality assessments.
Align ESG targets with business strategy and executive incentives.
Position ESG as a catalyst for innovation and competitiveness.
Principle 3 – Aligning with Stakeholders from Materiality to Value Creation
Boards must understand both financial and societal materiality. This is not about trade-offs—it’s about unlocking value through engagement and systems thinking.
“Sustainability is not a zero-sum game. It presents opportunities to create value for stakeholders by leveraging it as a catalyst for innovation.”
“Stop thinking ESG is only for profitable companies or a cost item. Instead, see it as a strategic imperative for long-term value creation.”
Principle 5 – Value Creation Beyond Financial Metrics
Transparency is the currency in the trust economy. The board's role in reporting is to ensure clarity, accountability, and third-party verification.
“Transparency builds trust with stakeholders and strengthens resilience.”
Principle 6 – Resilience and Adaptability
Sustainability governance is the foundation of resilience. It is how organizations weather crises, adapt to change, and emerge stronger.
“Success lies in balancing short-term performance with long-term resilience and societal impact.”
“Directors must address climate risks, comply with laws, and integrate climate considerations into strategic planning.”
Projects that participants decided to implement:
Benchmark ESG performance within the industry.
Anticipate and prepare for regulatory changes.
Build crisis protocols around sustainability risks.
Principle 7 – Truly Impactful
Climate risks must be met with competence and courage. Boards are expected to lead—not just support—this transformation.
“Boards need to develop the climate competence of their leadership teams. Environmental risks are top risks globally for the next 10 years.”
“Effective sustainability governance is not about adding new people but steering existing resources through a sustainability lens.”
“Don’t let perfection be the enemy. Achieving incremental improvements is better than waiting for perfect solutions.”
“Boards should assume a stewardship perspective—creating value for shareholders, employees, customers, and society alike.”
Projects that participants decided to implement:
Provide ESG training across leadership levels.
Appoint board members with sustainability expertise.
Establish or enhance sustainability governance structures.
Educate suppliers and customers to build shared value ecosystems.
From Insight to Action: The Transformation Starts in the Boardroom
The most transformative moment of the program came not only from what participants learned—but from what they committed to change.
Following two days of intensive discussion and reflection, the "Start, Stop, Continue" framework served as a crystallisation of the board-level shifts required to integrate sustainability meaningfully. This structured reflection captured the practical governance, strategic, and cultural shifts that directors must now lead to align business success with societal and environmental value creation.
Actions to Start Doing
Governance and Oversight
Establish ESG governance frameworks with clear and accountable structures, such as dedicated sustainability committees.
Propose and implement ESG-related key performance indicators (KPIs), aligning them directly with executive compensation.
Ensure ESG responsibilities are distributed across multiple board committees to reinforce integration into all strategic decisions.
Strategy and Risk Integration
Develop a detailed ESG roadmap with specific milestones and assign internal Sustainability Champions.
Align ESG objectives with broader corporate strategy, enterprise risk management frameworks, and operational KPIs.
Incorporate ESG into long-term financial planning and drive innovation in business models.
Reporting and Assurance
Implement third-party assurance for ESG disclosures to strengthen credibility and stakeholder trust.
Ensure ESG disclosures are aligned with international reporting standards such as the CSRD, TCFD, and GRI.
Stakeholder and Ecosystem Engagement
Foster regional and cross-industry collaboration to adopt and share best practices.
Launch green finance initiatives, including the development of sustainable financial instruments and impact-linked bonds.
Culture and Innovation
Leverage ESG as a catalyst for reimagining products, services, and operational models.
Promote purpose-driven leadership at the board level and institutionalise ESG training for directors and executives.
Actions to Continue or Improve
Stakeholder Engagement
Strengthen collaboration with non-governmental organisations, local communities, and public institutions to align actions with societal expectations.
Governance and Risk
Reinforce board-level ESG oversight by embedding it within the mandates of relevant committees.
Integrate ESG more tightly with enterprise risk management to enhance resilience and foresight.
Capacity Building
Provide regular, updated ESG and sustainability training to close knowledge gaps at the board and executive levels.
Transparency
Continuously improve the quality and clarity of ESG reporting for greater comparability, accountability, and insight.
Actions to Stop Doing
Greenwashing and Superficial Initiatives
Eliminate overstated sustainability claims or symbolic initiatives that lack meaningful impact.
Discontinue ESG practices that serve compliance rather than strategic value creation.
Governance Weaknesses
Address core governance shortcomings, particularly around board diversity, anti-corruption, and transparency.
Short-termism
Refrain from prioritising short-term profitability at the expense of long-term stakeholder trust, environmental health, and social progress.
These actions represent a shift from passive oversight to proactive stewardship. They challenge boards to move from intent to implementation, from reacting to external pressures to driving internal alignment, and from incremental change to structural transformation.
But where should boards begin?
Sustainability is no longer a specialised concern confined to a committee—it is a boardroom-wide imperative. It demands courageous leadership, strategic foresight, and a fundamental redefinition of corporate performance through the lens of long-term impact.
Yet each of these actions is not simply a task—it is a strategic project in its own right, requiring investment, time, and governance. Prioritising them is often the hardest part. What should come first? The answer depends on the company’s strategy, geopolitical exposure, purpose, and growth trajectory.
Without a clear understanding of the interdependencies between sustainability targets and business objectives, boards risk acting in silos—or not acting at all. This is precisely why I have been developing an AI-based Sustainability Compass—a tool designed to help directors and executives navigate these decisions with clarity, by aligning impact with value creation.
Sustainability is becoming the new language of governance. It is up to us—at the board level—to speak it fluently, act on it boldly, and lead the transformation our stakeholders, economies, and ecosystems now demand.
The essential question is: what tools and skills do board members need to frame sustainability as a driver of long-term value? And how can we communicate this clearly enough for capital markets to reward it?
