The Road to Sustainability: The Role of Leadership in Driving ESG for Private Businesses
Although many private businesses have started their ESG journey, there is still a lack of ESG leadership within the organisation. Business owners need to take ownership of the ESG narrative and lead by example to create a sustainable and responsible business. Meanwhile, CFOs should play a bigger role in implementing and reporting ESG goals.
The need for leadership in private businesses’ ESG journey
Most private businesses in Vietnam have started their ESG journey, with 69% committing or planning to do so. Our survey shows that the next generation of business leaders believes in sustainable values, with 77% of them expecting to increase their family business's focus on sustainability investments in the future.
Forward-thinking business owners should prepare for this shift by implementing ESG initiatives now. Once private businesses know their ESG maturity level and set their future ambitions, they need to plan and navigate their ESG journey. However, many lack clear ESG leadership, with 48% saying there is no leader within their organisation.
So, how can private businesses foster leadership in ESG?
Business owners must own the ESG narrative
Integrate ESG into the overall business plan and align ESG initiatives with long-term sustainability values. ESG initiatives offer a unique business opportunity to make a positive impact beyond traditional philanthropy.
Adopt ESG practices to help identify and mitigate longer term risks. This also encourages innovation and efficiency towards more sustainable and cost-effective ways of operating, ultimately enhancing brand reputation and attracting loyal customers who share similar values.
CFOs to step up in driving ESG strategy to reporting
CFOs should take a lead role in initiating the ESG strategy and transformation discussion. Compliance and reporting requirements are often the first steps in the ESG agenda using relevant key performance indicators (KPIs). As the business moves further up the ESG maturity curve, expand the conversation beyond compliance to include cost efficiencies, and then to changing its business model, products and customer orientation.
Strengthen the finance team. Upskill them, and provide better visibility into the financial implications of their organisation's ESG issues. This gives CFOs and the finance function a significant seat at the table.
