ESG is no longer a function - it has become a test of leadership

In South Africa, where climate volatility, water scarcity and inequality are enduring operational realities, ESG has shifted from a reporting discipline to a test of judgment. Leadership is now defined by the ability to interpret these frameworks in context, balancing competing priorities and making risk-based decisions under increasing scrutiny.

Senior practitioners, including Dr Urishanie Govender: Chief Sustainability Officer at Harmony Gold Mining Company Limited, Nishi Haripursad: Group Head of Environment at Harmony Gold Mining Company Limited, Jas Govender: Group Head of Shared Value at Sasol, and Jayne Mammatt: ESG, Sustainability and Climate Change Partner at Deloitte South Africa, describe a shift that is still uneven but unmistakable. ESG, once treated as a compliance obligation, now sits at the heart of capital allocation, strategy, and long-term resilience. The challenge has shifted from awareness to effective execution at the leadership level, particularly for sustainability leaders expected to translate ambition into credible decisions.

Evolving from a compliance exercise to a strategic sustainability pressure point

A decade ago, ESG in South Africa was largely defined by reporting cycles and regulatory checklists. That framing has shifted, though not consistently across sectors.

Investor scrutiny, cost of capital, risk and compliance expectations, and physical climate risk have pulled sustainability into the centre of business strategy. Yet in many organisations, legacy approaches persist, with ESG still treated as an external requirement rather than an internal operating constraint.

A shortage of sustainability leaders who can actually do the work

Across sectors a consistent constraint emerges: there are not enough executives with deep ESG and sustainability capability.

The challenge is no longer familiarity with sustainability language. It is the ability to translate environmental, social, and governance considerations into strategic and financial decisions under pressure.

In many organisations, ESG responsibility still sits outside core decision-making, often placed in risk and compliance, legal, or specialist sustainability functions. That separation is beginning to show.

Boards are now asking sharper questions. Who can integrate ESG into strategy without weakening commercial discipline? Who understands both climate data and balance sheet implications? Who can carry stakeholder expectations while still making difficult decisions? Increasingly, these are not only operational questions; they are leadership advisory questions about the judgement, capability and credibility required at the top of the organisation.

What this means for boards and executives

For boards and executive teams, the takeaway is practical: ESG requires leadership choices, not only stronger reporting lines. It means testing whether strategy, capital allocation, governance, risk and compliance, and succession planning are aligned to the organisation’s sustainability commitments and operating realities.

This also changes what boards should look for in current and future leaders. Technical knowledge matters, but so does the ability to apply that knowledge commercially: to weigh trade-offs, challenge assumptions, and turn sustainability risk into decisions that can be explained to investors, employees, regulators and communities.

Where sustainability leadership capability breaks down

The most difficult gap sits between technical ESG knowledge and executive judgement.

Climate risk, biodiversity loss and regulatory change are increasingly measurable. The challenge lies in interpretation and action. Many organisations can now produce ESG data. Far fewer can use it to reshape strategy or test whether their leadership decisions are resilient enough for the future.

This gap is most visible in mining and heavy industry, where climate and resource constraints are immediate rather than theoretical. Water stress, decarbonisation targets and land rehabilitation sit inside current operating decisions, not future planning horizons.

Uneven maturity rather than universal lag

South Africa’s ESG landscape is often described in broad terms, yet the reality is more uneven than weak.

In banking, mining and infrastructure, some organisations are already operating at global standard, in part because they face physical constraints more immediately than many of their international peers. Energy insecurity, water scarcity and social pressure force ESG and sustainability considerations into core decision-making.

Elsewhere progress is slower and more procedural, focused on disclosure rather than integration.

The divide is therefore not simply geographic. It is organisational.

ESG, sustainability and the reshaping of leadership careers

For executives, the implications are becoming harder to ignore.

ESG is no longer a specialist track. It is increasingly a core competency expected of leadership itself. Those who engage with it superficially risk becoming misaligned with how boards and investors now assess performance, while chief sustainability executives and commercially fluent sustainability leaders are becoming more central to strategic conversations.

The shift is subtle but significant. ESG and sustainability fluency are beginning to sit alongside financial literacy and operational discipline as baseline expectations for senior roles.

Mammatt notes that leaders who succeed in this environment tend to approach ESG through commercial logic rather than moral framing. 

A leadership test, not a reporting cycle

What emerges from these conversations is less about ESG as a framework and more about leadership under constraint. For boards and executives, the central test is whether sustainability can be embedded into the way difficult decisions are made, rather than treated as a separate report, committee item or functional responsibility.

The organisations moving ahead are not necessarily those with the most advanced frameworks. They are those where ESG has been absorbed into how decisions are made, how trade-offs are governed, and how future leaders are identified and developed.

As ESG expectations continue to evolve, boards and organisations will need leaders who can combine commercial judgement with sustainability insight, risk awareness and stakeholder credibility. That, increasingly, is what defines executive readiness.

How Odgers can support boards and executives

As ESG becomes a test of leadership, boards and executive teams need more than technical sustainability input. They need confidence that the organisation has leaders who can interpret risk, make difficult trade-offs, and embed sustainability into strategy, governance, succession and performance.

Odgers’ Leadership Advisory team supports C-suite teams, boards and organisations with tailored leadership consulting and advisory services designed to strengthen leadership capability and inform critical talent decisions. This includes leadership assessment and development, CEO and executive succession planning, executive and team coaching, new leader integration, leadership cohort development and board effectiveness.

For organisations reassessing ESG capability, sustainability leadership, risk and compliance accountability, or future-ready succession, our Leadership Advisory work helps identify and develop the leaders, teams and boards needed to deliver sustainable performance and long-term value.

Learn more: Leadership Advisory | Odgers