ESG Leadership in a Changing World: Key Insights from Our Business Breakfast
By Change & Transformation, Finance

ESG is evolving, with shifting policies, investor demands, and business challenges reshaping the landscape. In February, we hosted a breakfast event where industry leaders explored key trends—from the UK’s changing role in ESG leadership to the growing need for transparency in investment decisions. Here are the key takeaways from the discussion.

  1. Shifts in ESG Policy & Leadership

  • ESG has evolved significantly in recent years, with major policy shifts and varying levels of commitment from UK governments.
  • Under Liz Truss, Rishi Sunak, and Kwasi Kwarteng, ESG was deprioritised, whereas Theresa May advocated for legal commitments to Net Zero.
  • The UK was once a global ESG leader, meeting key deadlines, but its position has since weakened, allowing room for new leadership.
  • The introduction of sovereign green bonds and TCFD (Task Force on Climate-related Financial Disclosures) were notable ESG milestones.

  1. Global ESG Landscape

  • The US has requested extensions on ESG commitments, with strategic plans focused on transition frameworks.
  • While Trump was largely opposed to ESG, California and Texas have continued to push forward with policies.
  • The EU faces internal uncertainty, raising concerns about its future ESG leadership.
  • A potential opportunity exists for the UK to regain ESG leadership, especially if the EU and US fail to take the lead.
  • Speculation about political influence: Keir Starmer’s second term could drive more ESG progress, while Trump’s return might hinder global initiatives.

  1. ESG in UK Business & Investment

  • Investors are increasingly demanding ESG transparency, making it a critical factor in financial decision-making.
  • ESG’s role within businesses remains unclear—there’s a need for clearer integration into finance, operations, and board-level strategy.
  • Treasury’s control over budgets (with some departments facing 30% cuts) has constrained ESG initiatives.
  • The UK’s energy transition is progressing but remains slow, particularly with limited funding for nuclear power.
  • ESG is recognised as a tool for long-term value preservation, but businesses struggle with its practical implementation.
  • HR and environmental (“E”) factors align well but are underutilised in ESG strategies.

  1. Key Questions & Considerations

  • Could ESG impact lending policies, and should it?
  • How can businesses move beyond surface-level ESG commitments to meaningful, integrated strategies?
  • Will stronger financial incentives replace the current ‘dangled carrot’ approach to ESG?

Summary of Takeaways

  • UK & Global Leadership: The UK has an opportunity to reclaim ESG leadership as the EU’s influence declines and US policies remain uncertain.
  • Policy & Funding Challenges: Budget constraints and slow energy transitions limit ESG progress in the UK.
  • Business & Investment Focus: Investor demand for ESG transparency is increasing, requiring stronger board-level commitment and integration across departments.

If you have any questions or want to explore how we can help you achieve your goals, don’t hesitate to get in touch with Nathan Hotchkiss or Piers Rennie. They’re always happy to chat and provide guidance. Reach out today, and let’s start a conversation!