Governance: The ESG Factor That Holds Everything Together

Many companies treat governance as an afterthought, focusing on sustainability commitments without embedding accountability structures that make them stick. But Rob argues that strong governance is what determines whether ESG is meaningful or just words on a page.

“If you’ve got the right tone from the top, then all sorts of good things can be done in the environmental and social space. If you don’t have that, you’re going to struggle.”​

Too often, governance reacts to pressure instead of driving long-term strategy. Without leadership commitment, sustainability goals become vulnerable to financial or political shifts.

ESG in Emerging Markets: A Higher Standard is Expected

A common excuse for weak ESG performance in emerging markets is that local regulations don’t demand higher standards. But according to Rob, this mindset is no longer acceptable:

“The expectation is that companies will operate to the highest standards they know of—wherever they’re working.”​

This means businesses must take the lead in raising local standards, rather than just meeting minimum legal requirements.

One example is worker welfare. In many markets, wage disparities exist—but that doesn’t justify poor working conditions.

“Just because you’re not paying workers the same salary doesn’t mean they shouldn’t expect dignity, quality accommodation, and a safe environment.”​

Companies that fail to uphold these standards face increasing scrutiny from investors, employees, and civil society—regardless of where they operate.

Decision-Making in Governance: The Three-Question Test

One of the most practical governance frameworks Rob encountered was a three-question test used by senior leadership at Shell:

“For every major decision, we were encouraged to ask: Is it legal? Is it ethical? Is it wise?”​

✔ Legal – The basic compliance check.
✔ Ethical – Requires engaging stakeholders to determine what’s right.
✔ Wise – Considers long-term consequences—how the decision will be judged in years to come.

“Something that is acceptable today might be unacceptable a decade from now.”​

This forward-looking perspective is critical, particularly for companies operating in industries facing high scrutiny, rapid policy changes, or shifting public sentiment.

Why Weak Governance Leads to ESG Failures

Final Thoughts: Governance as a Competitive Advantage