In an era where sustainability and environmental social governance are becoming key drivers of business success, Kate Carr, Policy, and Governance Ambassador at the Institute of Directors (IoD) Cymru, and chair of our Developing an Environmental, Social and Governance (ESG) Strategy Wales Conference, shares her insights on the evolving landscape of Environmental, Social, and Governance (ESG). In this interview, she tells us that authentic ESG practices build trust and connect organisations with customers and communities, fuelling long-term growth and investment. An inauthentic approach to ESG can drive the wrong behaviours and lead to accusations of greenwashing.

In this interview, Kate answers our questions and offers a grounded perspective on how businesses can integrate ESG principles effectively to create long-term value

 

What are the most significant trends shaping the future of sustainability and ESG in the corporate world?

Consumer demand and activism is evolving and we are seeing a stronger focus on regulation and reporting requirements.

The impacts of climate change, social inequity and the consequences of inaction are already being felt by our organisations and our communities, locally and around the world.

There’s never been a brighter spotlight on the need for sustainable development and an understanding of how the choices we make today, shape the world tomorrow.

Successful organisations understand this way of working is good for the planet and for people which makes it good for business.

International agreements and collaborations are crucial but what you do at a local level also matters and makes a difference globally.

Wales was the first country to introduce sustainable development legislation aimed at improving economic, environmental, social and cultural well-being, requiring public bodies to think long-term. And other nations are following where Wales has led with the Well-being of Future Generations Act.

Shaping a more sustainable supply chain through procurement is just one way Wales is leading the charge. The new Social Partnership and Public Procurement Wales Act is aimed at improving public services through fair work and social responsible procurement and will help business delivering to the public sector to play their part.

We’re witnessing exciting innovations and a powerful shift towards a more circular economy—where we truly value our resources and minimise waste.

In an era of misinformation, the drive for inclusion is also more important than ever. Organisations are rightly being held to account for their impact on human rights, on communities, on their work force and that of their supply chain and for well-being in its widest sense.

Planning for the future, whether it’s the next pandemic, severe weather events, impacts of health and other inequities and understanding how you impact over the longer-term is not just sensible, it’s now required. Governments, financial institutions and contract commissioners are all increasingly focused on ESG.

And far from a burden, this should be seen as an exciting opportunity.

 How can organisations effectively integrate ESG principles into their core strategies to drive long-term value?

Start by getting excited about good governance. Good governance involves genuine involvement of the people impacted by decision-making and being clear about your organisation’s purpose. It’s not just what you do, but how you do it that makes a difference.

For ESG and sustainable development to truly make an impact, they must be integrated at every level of the organisation, from the board to the executive leadership. Many organisations have multiple strategies or project plans, but the question is: are these strategies working together seamlessly, or are they operating in silos?

A unified corporate plan is essential, where everything else flows from and back into. The Well-being of Future Generations (Wales) Act requires organisations to work in a joined-up way, integrating across policy areas, collaborating to prevent problems, and involving people in decisions that affect them.

These principles form the solid foundation on which sustainable business is built. Evidence-based decision-making, drawing on robust data analysis, is key. More information is available on long-term trends—how are these likely to impact your business and the people it serves? How can you prevent or mitigate these issues, whether it’s preparing for climate change or ensuring the well-being of your workforce?

Environmental Social Governance

What role do you believe innovation and emerging technologies will play in the evolution of ESG practices?

Innovation is crucial to delivering the change needed for current and future generations to thrive. The key is to ask how ESG can guide the development and application of emerging technologies in a way that is ethical and anti-oppressive, benefiting both people and the planet.

AI and technology play an increasingly significant role in communication and information-sharing. However, communities, customers, and workers need to know that the benefits of these innovations will be equitable. A sense of safety and engagement can only come from genuine involvement and dialogue about how these products are developed and how they impact people’s lives.

 How can organisations balance the demands of sustainability with the need for economic growth and profitability?

We are already seeing the cost of inaction and its impact on growth and profitability. There is a much-needed debate about growth for growth’s sake. Traditional boom-and-bust approaches to the economy are increasingly seen as outdated.

Sustainability means meeting the needs of the present without compromising the ability of future generations to meet their own needs. What are the demands or true costs of relentless economic growth on our people and our planet? Can we sustain this pace, or is it time to rethink how we grow?

Wales is working to balance economic, environmental, social, and cultural well-being—each of these depends on the other. Businesses, communities, and even the planet cannot sustain themselves if all our natural resources are exhausted. A healthy economy is necessary to ensure social and cultural well-being and to support environmental management.

Integrating sustainable approaches into growth strategies means thinking ahead, exploring new markets based on long-term trends, and investing in your business to reduce long-term costs such as energy and waste reduction. Done right, this can support brand awareness and customer loyalty. If ESG is not taken seriously by your organisation, it will feel expensive and time-consuming to make the required changes. But if ESG is properly integrated across your business, it will support good decision-making and serve as an investment in the future of your organisation.

What key metrics and benchmarks should companies focus on to measure the success of their ESG initiatives?

How we view success, what we choose to measure, and how we interpret those measurements drive behaviours within organisations. Metrics are important, but it’s crucial to analyse, understand, and apply the data effectively. Are you just chasing numbers, or are you genuinely making a difference?
Start by asking: What does good look like for your organisation? what needs to change to achieve that? and how will you know you’re on the right track? Larger organisations often have formal reporting requirements. Whatever size your organisation is, be clear about your purpose and focus on the difference you want to mase.
Consider the impact on both the organisations and communities you serve. If you’re part of a supply chain, understand what larger organisations are reporting and how your metrics can align with or support those efforts. Think globally and locally—factors like climate change, anti-slavery practices, health trends, air quality, and cultural and social dynamics all matter.
In summary, focus on what success looks like for your organisation. Prioritise purpose, narrative, and analysis over simply chasing numbers—otherwise, you risk driving the wrong behaviours and creating unintended consequences.

 Looking ahead, what are the biggest challenges and opportunities for advancing global sustainability goals through corporate ESG efforts?

 

The UN Sustainable Development Goals offer global consistency for framing strategies for multinational companies. However, there are currently different ESG regulations and reporting requirements across countries, which can create inconsistencies.

Short-term thinking and pressure to deliver immediate financial results often conflict with the longer-term approaches needed for sustainable growth. A lack of integration or an inauthentic approach to ESG can lead to accusations of greenwashing.

However, the opportunities are significant. Authentic ESG practices build trust and connect organisations with customers and communities. They drive better decision-making around innovation and investment for sustainable growth and help you prepare for future disruptions, whether from pandemics or weather events.

By embracing ESG and leading with innovation, your organisation won’t just survive—you’ll thrive in a future that’s brighter for everyone.

To learn more about the evolving landscape of ESG, join us at our upcoming Developing an Environmental, Social and Governance (ESG) Strategy Wales Conference.

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