Environmental, Social, and Governance (ESG) factors are often treated as something conceptual - broad, abstract, and disconnected from the tangible risks and opportunities a business faces. This one-size-fits-all approach often dilutes the impact of ESG, making it harder for companies to address specific challenges or leverage opportunities effectively. This is particularly true of diverse companies and geographies, which face a variety of risks and opportunities. For example, the most material issues for a Kenyan horticulture business will likely be different to a Canadian AI software business.
Therefore, the need to unbundle E, S, and G is more urgent than ever. Geopolitical tensions, such as the ongoing Iran conflict, are creating ripple effects across global supply chains, energy markets, and social stability. Meanwhile, the rise of AI introduces new governance and social dilemmas—from surveillance concerns to energy consumption and ethical labour practices. Businesses must balance financial sustainability with these evolving ESG priorities. ESG is, at its core, about business resilience and long-term value creation.
"ESG is not a box to check. It’s a lens through which to view the long-term sustainability of your business."
— Paul Polman, Former CEO of Unilever
Why Now?
There is a second benefit to buying local and seasonal. When a café or restaurant puts a simple note on the menu, where the eggs come from, which farm supplies the veg, customers spend more. Research shows average table spend rises 8–12%. Telling an honest food story costs nothing and pays back fast..The world is changing rapidly, for instance via increasing impacts from:
Yet many businesses still treat ESG as an annual compliance exercise, relying on static surveys and interviews. This approach fails to capture the dynamic, interconnected nature of E, S, and G risks.
What it is:
Double materiality assessments evaluate both:
Why it matters:
Traditional materiality assessments often miss the social dimension—e.g., how workforce diversity impacts innovation or how community relations affect license to operate. By integrating financial data (e.g., turnover rates, supply chain disruptions) with event scanning (e.g., social unrest, regulatory shifts), businesses can identify real-time social risks and opportunities.
Example:
A tech company might discover that its AI-driven hiring tools unintentionally exclude certain demographics (a social risk), which could lead to reputational damage and legal costs (financial impact).
What it is:
Scenario analysis involves brainstorming and analysing different potential futures to understand how E, S, and G factors might interact. For example:
Why it works:
Pro tip:
Run workshops with diverse perspectives—include frontline employees, customer facing experts, and external specialists. Their insights often uncover risks that leadership sometimes overlooks.
Static ESG reports are outdated the moment they’re published. Instead:
Use AI tools: Natural language processing can scan news and reports for emerging social risks (e.g., labour strikes, human rights violations in your supply chain).
While E (Environmental) and G (Governance) often steal the spotlight, the S (Social) is the linchpin:
Regulatory resilience: Social issues (e.g., modern slavery) are increasingly tied to legal and compliance risks.
Unbundling ESG isn’t about abandoning the framework—it’s about making it work for your business. Here’s how to start:
Need help?
Organisations like Seawolf Sustainability Consulting and the Global Advisory Alliance specialize in training, workshops, and dynamic materiality assessments to help businesses navigate these complexities. A Double Materiality Assessment Masterclass, from Foundations to Implementation, is available in module form led by an experienced expert.
Rebecca Self is Co-Founder of Seawolf Sustainability Consulting and Senior Advisor, Sustainable Finance, based in the Netherlands. Rebecca brings deep finance experience from HSBC and South Pole. She advises clients on sustainable finance, disclosure, and the integration of ESG into corporate and investment decision-making.
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