ESG FORUM

CREATING A MEANINGFUL IMPACT 

Maya Karunaratne explains how businesses can achieve ESG compliance

ESG is not about introducing entirely new systems or imposing additional layers of complexity on business operations. Rather, it’s about identifying existing practices and aligning them through a structured approach that enables consistency, measurement and transparency.

When ESG is considered to be an externally driven requirement, it’s often met with resistance or reduced to a mere exercise that is usually shaped by consumer pressure, evolving investor requirements or regulatory compliance.

While these factors are important, ESG risks becoming performative.

As businesses increasingly engage with sustainability, it’s not uncommon to see efforts that prioritise visibility over substance. This is where practices such as greenwashing or whitewashing begin to emerge unintentionally.

In this context, it’s important to note that sustainability isn’t bound to only environmental accountability but social and economic responsibility as well. In essence, it’s about the sustainability of a business, and its ability to remain resilient and competitive over time.

Furthermore, the now theoretically obsolete concept of corporate social responsibility (CSR) was often misunderstood to be peripheral to an enterprise’s main objectives, and driven by philanthropic motives and public relations efforts.

The evolution of CSR into ESG reflects a broader understanding of corporate purpose. This shift embodies a more integrated approach that embeds sustainability and ethical practices into the core of business operations.

True and meaningful ESG moves beyond visibility and compliance by systematising sustainability, and embedding it into the core business strategy. Overall, it represents a set of standards that companies use to operate in ways that consider their environmental impact, social responsibilities and governance practices.

When perceived correctly, ESG becomes an extension of sound corporate governance. In practice, many companies are inherently engaging in related activities by improving their operational efficiencies, managing energy use, recycling materials, investing in people and communities, and adhering to relevant certifications and standards.

These aren’t new initiatives but part of how businesses operate and sustain themselves over time. However, without recognising and formalising them within a structured framework, they remain largely invisible. As a result, companies undervalue their own contributions while missing opportunities to strengthen their credibility with stakeholders.

Central to this approach is the concept of materiality – i.e. identifying ESG issues that are most likely to impact business performance and stakeholder value. Not all issues are equally relevant to every organisation. Meaningful ESG requires companies to identify the factors that are most significant to their operations and stakeholders, and to prioritise those areas accordingly. This ensures that ESG efforts are focussed, strategic and aligned with business objectives.

Accountability is key and remains the defining feature of meaningful ESG – because without measurement, it’s simply anecdotal.

Monitoring and evaluation (M&E) play a critical role in tracking progress. By having the right systems in place, businesses can understand what’s working, where gaps exist and how to strengthen efforts. This doesn’t call for substantial new investments. And in many cases, it’s possible to build on existing processes, use available data and introduce simple tracking mechanisms that can be scaled over time.

Accountability can begin with a small number of clear and measurable indicators such as energy usage, employee retention, gender diversity, safety performance and governance practices among others.

As organisations mature, these indicators can evolve into more comprehensive reporting frameworks.

Alignment with global frameworks such as GRI, IFRS and the UN SDGs can provide useful guidance in this process. However, organisations don’t need to report on every metric; they must focus on what’s relevant, and build their ESG approach in a way that’s proportionate to their size, sector and strategic priorities.

Businesses should leverage what they already do well and position themselves competitively in a rapidly changing global market. Investors, partners and customers are increasingly expecting transparency and responsible business practices. ESG provides a framework through which to communicate this effectively.

Perhaps, the issue isn’t that businesses are failing to uphold ESG principles; it is that they’re failing to recognise and articulate them. This isn’t a new agenda but an existing process that must be structured, measured and made accountable.

Therefore, meaningful ESG begins with a clear understanding of how business operations affect both society and the environment – and how their impact is actively managed.

Corporate purpose is reinforced not simply as a statement of intent but a reflection of how a business creates value across its stakeholder base. It’s this value that drives lasting impact within communities and across the broader economy, ultimately building a resilient and competitive business.