Holding the Line: A Playbook for ESG Leadership in Hostile Terrain
by Prof. Ioannis Ioannou (London Business School)
The July, 2025 edition of the “Hub” highlighting a playbook for top leadership of companies which focus on adversity being created around ESG and sustainable business practices and how to stop value erosion in such hostile climate.
In recent years, ESG (Environmental, Social, and Governance) considerations have transitioned from peripheral to strategic in corporate decision-making. However, this momentum has recently encountered a powerful backlash—marked by politicization, polarization, and retreat from ESG commitments. Amidst this hostile terrain, Prof. Ioannis Ioannou presents a pragmatic and principled guide to navigating this new era with strategic clarity, integrity, and resilience.
The Changing Landscape
ESG is no longer simply a corporate trend; it is now a contested battleground. Sustainability professionals face increasing scrutiny, diminishing institutional support, and rising reputational risks. Despite these headwinds, the fundamental challenges—climate change, inequality, social and regulatory pressures—remain as pressing as ever. The playbook is crafted for leaders who choose to "hold the line" by embedding ESG structurally, not symbolically.
10 Things to Do Now
- Use ESG for Strategic Foresight: ESG should help foresee systemic disruptions, not be a cover for reputation.
- Keep a Long-Term Focus: ESG is about long-term survival, not quarterly optics.
- Educate the Board: Governance bodies must understand sustainability as strategic, not optional.
- Build Internal Coalitions: ESG must be owned across departments—legal, finance, operations—not siloed.
- Link Incentives to ESG: Real integration requires ESG to impact performance reviews, compensation, and capital approval.
- Direct Capital Toward ESG: Strategic priorities are reflected in how capital is allocated.
- Be Transparent About Trade-offs: Acknowledge when sustainability comes at a cost—credibility depends on honesty.
- Watch for Who's Retreating: Identify which companies are upholding ESG and which are quietly withdrawing.
- Stay Grounded in Business Models: ESG must shape the core business strategy, not operate at its margins.
- Say Less, Mean More: Let actions speak louder than announcements in a volatile ESG climate.
10 Things Not to Do
- Don't Equate Communication with Commitment: ESG must be action-based, not just PR-driven.
- Don't Outsource Belief: Ownership of ESG must be distributed, especially at leadership levels.
- Don’t Bolt ESG Onto Old Models: ESG must be embedded in the business engine, not as an external layer.
- Don’t Let Disclosure Replace Strategy: Reporting is not transformation—it’s a tool, not the destination.
- Don’t Avoid Hard Trade-offs: Progress often requires sacrifice and visible decisions.
- Don’t Focus Solely on Risk Avoidance: ESG should be visionary, not just a shield.
- Don’t Rebrand to Escape Criticism: Superficial changes without real commitment erode integrity.
- Don’t Confuse Agreement with Alignment: Consensus under pressure tests true commitment.
- Don’t Centralize Everything: ESG should outlast the individual champions—build systems, not dependencies.
- Don’t Mistake Retreat for Adaptation: Withdrawing may feel safe now but risks irrelevance later.
7 Key Questions for Organizational Reflection
- Who truly holds decision-making power on sustainability?
- How are ESG trade-offs surfaced and resolved?
- Does ESG influence core strategic choices?
- What would the company look like if ESG were fully internalized?
- At what stage does ESG enter capital allocation discussions?
- What remains if ESG communications stop?
- Which ESG values would you keep if external pressure disappeared?
7 Personal Questions for ESG Leaders
- What compromises have I accepted that once felt unacceptable?
- What ESG conversations am I avoiding—and why?
- Am I saying what I believe—or just what people want to hear?
- Which ESG effort relies entirely on me?
- Who do I trust—and who am I just performing for?
- What am I still willing to lose for this cause?
- Am I proud of the version of myself this work is creating?
Final Reflections: What Will Remain?
Prof. Ioannou encourages ESG leaders to sustain courage without illusions. ESG is not about fanfare or headlines—it’s about discipline, persistence, and long-term value creation. Leaders must act now to build resilient institutions that reflect sustainability not only in language but in structure. Ultimately, when the noise fades, what will remain are the quiet but courageous choices made during the most challenging times.
Note: IICA duly acknowledge the authorship / ownership of the document and re-publishing it only for educational purpose of ID Databank members.
