Why sustainability is becoming a boardroom priority
Amid geopolitical volatility, companies that embed sustainability into core strategy will build resilience and long term advantage.
By ISB
Last Updated: Feb 18, 2026, 12:34 IST2 min
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The phrase Environment, Social and Governance (ESG) is increasingly being questioned.
Once the vanguard of sustainable investing and corporate responsibility, it is now criticised for becoming watered down, politicised, and vulnerable to greenwashing. Headlines predicting a “post ESG” world are becoming common—but this narrative mistakes backlash for obsolescence. This is not the end of ESG; it is the end of sustainability as a checkbox exercise and the rise of sustainability as a strategic board level imperative shaped by geopolitics, capital flows, material risks, and long term resilience.
Yet, the reason this shift matters for India’s corporate leaders is straightforward: rising geopolitical fragmentation and economic pressures are reshaping perceptions of both risk and opportunity. Firms that treat sustainability as a compliance requirement may struggle amid regulatory swings, investor scrutiny, and supply chain shocks. But those that integrate sustainability across governance, finance, culture, and operations will gain a durable competitive edge.
ESG: Maturation, Not Sunset
The backlash against ESG is real, emerging both politically and through scepticism about standards and credibility. Yet parallel developments tell a different story: mandatory disclosures, investor demands for credible transition plans, and corporate commitments to Scope 3 emissions and circularity. These signal not a retreat, but the evolution of sustainability into a disciplined risk management framework. This shift requires audited disclosures, measurable targets, and clear roadmaps—building trust and long term resilience.
Sustainability as Boardroom Strategy
For decades, sustainability functions were confined to reporting roles. That is changing. Sustainability is gaining ground in the C suite and on boards—Chief Sustainability Officers working with CFOs, executive incentives tied to sustainability KPIs, and dedicated board committees for climate and sustainability. These moves reflect recognition that sustainability influences value creation—from capital access and supply chain continuity to market access and brand strength.
Geopolitics Rewrites the Risk Map
Geopolitical competition, shifting trade blocs, tariff regimes, and regional alliances now shape corporate operations across borders. For emerging economies, the transition to green technologies is challenged by fiscal constraints, volatile commodities, and limited access to critical minerals. Business leaders must plan for varied geopolitical futures—supply chain rerouting, regulatory divergence, or shocks such as sanctions.
How Emerging Economies like India Should Lead?
In countries like India, development priorities and climate goals often compete. Responsible leadership requires emphasising equity, pursuing growth and emissions reduction together, building multilateral coalitions for concessional finance, and investing in domestic industrial capacity for low carbon transitions.
From Frameworks to Decision Making
Frameworks and ratings remain relevant, but must evolve from reporting tools into decision making structures. Integrating sustainability into business decisions requires linking compensation to long term sustainability metrics, embedding sustainability checkpoints across governance layers, and investing in scenario planning and stress testing.
Enter Economics for Sustainability
The idea of a “post ESG” world does not call for abandoning ESG, but for recognising the economic foundations of sustainability. A reframing toward “EESG”—where the first E stands for economics—highlights that financial viability underpins environmental and social impact.
Reinventing Governance for Credibility
Future ready governance requires proactive boards, credible third party validation, digital tools such as real time ESG monitoring, and diverse expertise spanning climate science, geopolitics, and finance.
Capabilities and Mindsets of Leaders Who Will Win
Leadership of the future will prioritise systems thinking, scenario planning, hybrid fluency in finance and climate science, and strong stakeholder management. Organisations that embed sustainability deeply will define future markets and remain resilient amid volatility.
This piece originally appeared in ISB Discover from the Indian School of Business. To receive business ideas and insights from ISB Discover, click here: ISB Discover
First Published: Feb 18, 2026, 12:44
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