In recent years, business leaders have navigated a perfect storm: a global pandemic, social upheaval, advances in AI, shifting employee expectations, and growing pressure from investors and customers to act on sustainability. These pressures have accelerated one clear message: Environmental, Social, and Governance (ESG) is no longer a nice-to-have—it’s a strategic imperative.
A decade ago, ESG was primarily about risk mitigation and compliance. Today, it’s about competitive advantage, investor confidence, brand strength, and talent attraction. In short, ESG has become a lens through which business resilience, trust, and long-term value are assessed.
Companies that understand this shift—and act on it—aren’t just protecting their reputation. They’re building long-term value, engaging their workforce, and earning deeper trust from every stakeholder.
What ESG Really Means for Business
ESG encompasses three interconnected pillars:
- Environmental: Energy usage, emissions, waste reduction, commuting impact, climate policies, carbon footprint.
- Social: Employee well-being, equal employment opportunities, inclusive workplace practices, fair pay and living expenses, workplace health and safety, responsible supply chain partnerships, labor laws, human rights.
- Governance: Ethical leadership, corporate governance, risk management, anti-corruption policies, accounting integrity and transparency, board diversity.
The concept isn’t new. But the expectations—and the business case—have evolved.
The Business Case for ESG is Stronger Than Ever
Organizations that invest in ESG are reaping tangible benefits:
- Higher employee engagement and retention: As highlighted by Mckinsey, a strong ESG proposition can help companies attract and retain quality employees, enhance employee motivation by instilling a sense of purpose, and increase productivity overall.
- Greater investor appeal: ESG transparency is now a baseline expectation among institutional investors. According to a KPMG survey cited in Forbes, 70% of U.S. CEOs said their ESG programs improved their companies’ financial performance.
- Operational resilience: ESG-focused firms tend to respond faster and more effectively to crises, thanks to stronger governance and stakeholder trust.
- Brand equity and customer loyalty: Companies perceived as purpose-driven are outperforming peers in customer trust and loyalty metrics. Research by FleishmanHillard found nearly 65% of consumers expect companies to speak up on issues that have a significant impact on the world.
ESG Shouldn’t be an Afterthought
The challenge many organizations face is execution. ESG is often siloed—led by a sustainability officer and often disconnected from the business strategy. In today’s workplace, ESG has become a people issue; and HR and People leaders are ESG architects who have a role to play in integrating ESG into people strategies at every level.
That means:
- Embedding ESG goals into business KPIs
- Building accountability into executive performance
- Investing in data infrastructure to track ESG impact
- Empowering cross-functional collaboration—particularly between sustainability, finance, operations, and people teams
Metrics That Matter: ESG KPIs To Consider
Tracking the right data is key to ESG credibility. According to AIHR, these are some ESG metrics to integrate into your ESG KPIs:
- Employee metrics in representation (level, function) and leadership roles
- Gender and pay equity reporting
- Well-being scores (e.g., how often staff report feeling burnt out or participate in mental health programs)
- Retention rates for underrepresented groups
- Remote work impact and sustainable commuting data
- Training hours related to ethics, inclusivity, unconscious bias, and ESG education
- Participation in employee volunteer programs or ERGs
AIHR recommends these metrics not just for compliance—but to link ESG with people performance and culture health. With the right infrastructure, ESG metrics can be integrated into executive dashboards, investor reports, and even employee performance frameworks—making ESG not just visible, but actionable.
Why ESG Matters to Employees
Employees today want more than perks or pay checks—they also want purpose.
- Attraction & Retention: A study by SHRM found that 64% of HR leaders say ESG efforts enhance recruitment effectiveness, and 60% say they improve retention.
- Values Alignment: According to this article by P&A Grant Thornton, Employees increasingly want to work for companies that stand for something beyond profits. Businesses that embed sustainability, social responsibility, and ethical practices into their operations will attract top talent.
- Engagement & Pride: ESG initiatives help employees feel proud, connected, and committed—especially when they’re involved in shaping those initiatives.
Employees are no longer passive observers—they expect their companies to stand for something and to act accordingly.
- About 70% of potential employees are more likely to apply for and accept an offer from a socially responsible organization, according to a survey by IBM.
- Younger generations—who represent the future workforce and consumer base—are especially driven by sustainability and ethics. “By 2025, Gen Z and Millennials will make up the majority of Southeast Asia’s workforce, with Gen Z alone comprising nearly a third globally, as their demographic advantage peaks by 2045, Gen Zs digital expertise, adaptability, and entrepreneurial mindset will play a pivotal role in driving innovation and economic growth.”
- Employee-led ESG initiatives can become powerful culture builders and brand differentiators (like sustainability councils or volunteer programs).
- In a 2024 Great Place To Work® survey of over 43,000 employees covering typical workplaces in 69 countries around the world, we found that less than 65% of employees in a typical workplace in Asia and Oceania say that their company’s business decisions meaningfully improved society, the environment, and human well-being overall.
The bottom line is this: ESG isn’t a distraction from business performance. It is business performance—just viewed through a broader, more future-focused lens.
Where to Start with ESG
If you’re looking to evolve your ESG approach, here are a few strategic steps to consider:
- Assess your current ESG maturity: Where is ESG integrated—and where is it still considered an afterthought?
- Set bold, measurable goals: Tie ESG outcomes to business objectives and KPIs, not just reporting requirements.
- Empower cross-functional leadership: Break down silos between sustainability, HR, finance, and operations.
- Engage your people: From culture to innovation, employee buy-in is your ESG accelerator. Start with employee surveys such as the Trust Index™ Survey that ask employees if they “feel good about the ways we contribute to the community.”
Over the past few years, we’ve seen many more examples of ESG initiatives among our Best Workplaces™. Here are some of the trending practices you could explore:
- Inclusive Workforce: Review organization’s programs and policies to ensure fairness and equity For All™
- Inclusive Infrastructure: Design workspaces that ensure accessibility, support productivity, and promote well-being for all employees, regardless of ability
- Purposeful Well-being and Care Policies: Adopt a holistic approach to supporting employees care and well-being across different life stages
- Community Partnerships: Support education and job readiness opportunities for underrepresented groups in local communities in which you operate
- Business Sustainability Strategies: Engage employees, as well as clients, stakeholders, and partners beyond the workplace, in sustainability initiatives
- Agency Staffing Agreements: Ensure compliance with corporate social responsibility standards, and ensure that workers’ rights are respected throughout the value chain
- Electric Vehicles and Commuting: Consider virtual meetings where possible, to reduce carbon footprint around work-related transportation and travel
- Digital Sustainability Initiative (DSI) Dashboard: Enhance accountability and transparency in sustainability efforts
The question facing leaders today isn’t “Should we invest in ESG?” but rather “How deeply are we willing to integrate ESG into how we operate, lead, and create value?”
From our work with clients across different markets and industries across ASEAN and ANZ, we’ve seen the difference it makes when ESG is truly owned by leadership—when it’s aligned with core business goals, supported by data, and activated by an engaged workforce.
The call to action is clear. ESG isn’t a trend. It’s the future of responsible, resilient businesses.
Want to know what your employees saying about your organization’s impact on the community? Find out how.
