“This ESG discussion is beginning to feel like decoration.” The Board chairman leaned back in his chair, head tilted to look up the ceiling, fingers interlocked across his stomach, watching the final slide of a glossy sustainability presentation fade from the screen. Around the table sat experienced directors who had spent decades building businesses in difficult environments where infrastructure falters, supply chains stretch across fragile economies, and family ownership sometimes complicates governance.
The CEO nodded politely. “We believe the report positions us well with stakeholders.” A director on the audit committee shifted in his seat. He was not taking it anymore. “Forgive me,” the chairman continued slowly, “but after forty minutes of charts and pledges, I still cannot see where ESG actually changes how we run this company.”
The room fell quiet. One director leaned toward another and whispered just loud enough for the table to hear. “It sounds good, but I cannot tell what decision this affects.”
I smiled quietly because the chairman had just said what many boards privately think but rarely express so directly to management. You have probably heard of the office coffee machine problem story. I often tell it to my audience at retreats.
I call this story the office coffee machine problem.
In one corporate office I visited about 12 years ago, the staff kitchen had a coffee machine that leaked water every morning. The floor became slippery, cups piled up beside it, and people complained daily.
Instead of repairing the machine, management did something interesting. They sent emails encouraging “a culture of responsibility around shared resources.” They placed a colourful poster near the machine promoting teamwork. They even launched a committee to discuss workplace experience.
Yet the machine kept leaking. One employee said to his colleague while mopping the floor with paper towels, “If they fixed the machine, the culture problem of talking too much without action would disappear.”
Now imagine me standing before a boardroom audience and pausing after that story. Then I ask a question. “Is your ESG program fixing the coffee machine, or writing posters about the coffee machine?”
The directors usually laugh because they recognise the pattern instantly. Many organisations approach ESG as a reporting exercise instead of a strategic discipline.
- The board reviews sustainability disclosures.
- Management hires consultants to improve ratings.
- A new ESG committee appears on the governance chart.
But when the board evaluates strategy, investment decisions, operational risk, or supply chain resilience, ESG rarely enters the conversation in a meaningful way.
I witnessed this during a strategy retreat with a manufacturing company operating in Somalia where water scarcity, power instability, and labour migration constantly affect operations. During the presentation, the sustainability officer proudly explained the company’s community programs and environmental commitments.
A director interrupted. “Interesting work,” he said calmly, “but where in our capital investment decisions do we analyse environmental exposure?” The CFO responded carefully. “That is not currently included in the investment model.”
Another director leaned forward. “So we publish ESG commitments but do not integrate them into strategy?” The CEO remained thoughtful
That moment marked the turning point of the discussion.
The real purpose of esg
The real value of ESG is not reputation. The real value is foresight. In many emerging economies, the first signs of strategic risk appear through environmental and social pressures long before they appear in financial statements.
- Factories shut down when water becomes scarce.
- Transport networks fail when infrastructure collapses.
- Community tensions stop projects overnight.
- Supply chains break when informal vendors collapse under economic pressure.
These are not abstract concepts. They are operational shocks. Yet boards sometimes treat ESG as if it were separate from strategy rather than a lens that reveals hidden risks shaping the future of the business. “ESG is not about public relations. It is about strategic survival.”
Here is a simple exercise to test your ESG strategy, I often use during retreats. “Write down the three environmental, social, or governance forces that could disrupt this company within the next five years.”
Directors who had previously listened politely now lean forward and start writing. After a few minutes I ask them to read their answers aloud.
- Water shortages affecting manufacturing plants.
- Political instability disrupting logistics.
- Youth unemployment increasing labour volatility.
- Supplier corruption contaminating procurement networks.
These insights rarely appear in ESG reports. Yet they shape the strategic future of the organisation. Once the board recognises this, the conversation changes completely.The discussion moves from disclosure to strategy.
Boards that treat ESG seriously embed it in three places.
- First, strategy development. Every strategic plan must test its assumptions against environmental and social shifts that could reshape the market.
- Second, capital allocation. Investments should consider long term exposure to environmental constraints and social expectations.
- Third, enterprise risk oversight. ESG risks must be integrated into the company’s risk register and operational resilience planning.
When these elements align, ESG stops being a fashionable acronym and becomes a strategic instrument.
If you are the board chairman, ask your directors:
- Which environmental or social forces could undermine our business model within five years?
- Where in our strategy do ESG risks influence capital investment decisions?
- Are we measuring ESG impact on operations or merely reporting it to outsiders?
If you are a director, ask the CEO:
- Which ESG risk could interrupt our operations tomorrow morning?
- How does ESG analysis influence our strategic planning process?
- Are we fixing the coffee machine or writing posters about it?
Because boards that treat ESG as decoration eventually discover that strategy ignored the signals already visible in plain sight.
