The Rise of ESG and Its Impact on Executive Hiring

Environmental, Social, and Governance (ESG) - once a set of corporate buzzwords - has now become a core strategic focus for businesses worldwide. These days, ESG isn’t just influencing business models or stakeholder relations; it’s reshaping who companies hire at the highest levels. If you’re an aspiring or current C-level executive, understanding ESG is no longer optional - it’s critical for career success.

As an executive search partner, I’ve seen how ESG is transforming the job market. Companies are now prioritising leaders who can not only drive financial performance but also embrace sustainability, social impact, and strong governance. Let’s dive into what this shift means for leadership and why ESG skills are now indispensable.

Why ESG is Here to Stay

A 2023 Deloitte survey shows that 79% of investors see ESG factors as integral to their decision-making, and 60% of Millennials and Gen Z would switch jobs for a more sustainable employer. Public companies face growing pressure from both regulatory bodies and investors to integrate ESG into their core strategies. For example, the EU’s Corporate Sustainability Reporting Directive has broadened ESG reporting requirements, making sustainability as essential as financial performance.

For executives, this means that understanding ESG isn’t just about looking good on paper—it’s about meeting the new standards of corporate responsibility, accountability, and long-term growth.

The New C-Suite Profile: What Boards Are Looking For

So, what does this ESG shift mean for you as a C-level candidate? Here’s how it’s changing the game for executive hiring:

1. Sustainability Leadership is Non-Negotiable

Gone are the days when sustainability could be relegated to a small corner of the business. Companies need leaders who can embed environmental considerations into core business strategies. In fact, many large companies, including General Motors, have mandated that their suppliers adhere to strict ESG standards. Investors and boards are no longer impressed by vague statements about environmental care; they want real results, like reductions in carbon emissions and net-zero strategies.

Example: A client in the manufacturing sector hired a CEO not just for their operational expertise, but because they had a track record of implementing sustainability initiatives that reduced environmental impact and improved profitability. It wasn’t just a bonus - it was a key factor in their selection.

Tip: If sustainability isn’t already part of your skill set, start building it now. Take on green initiatives or get involved in sustainability reporting. Having a proven track record in this area is becoming essential.

2. Social Impact and DEI are Must-Haves

Beyond environmental factors, the “S” in ESG - social impact - plays a pivotal role. This encompasses everything from how a company treats its employees to how it engages with the broader community. Diversity, equity, and inclusion are critical parts of this equation, and it’s no longer enough for companies to talk the talk. 74% of consumers say they’ll stop supporting businesses that don’t treat employees well.

For you as an executive, that means being able to show a history of fostering inclusive, equitable work environments and driving meaningful social impact initiatives.

Tip: Highlight any leadership experience you have in DEI or corporate social responsibility (CSR). If you’ve spearheaded programs that improved employee engagement, increased diversity, or supported underrepresented groups, make sure those achievements are front and centre on your CV.

3. Governance is About Accountability, Not Just Compliance

The “G” in ESG stands for governance, and while it might sound dry, governance is essential for driving trust and transparency. With over 90% of S&P 500 companies publishing ESG reports, executives are now accountable for integrating governance into every facet of business operations. Strong governance isn’t just about compliance - it’s about maintaining the company’s ethical foundation and managing risk in a complex, globalised world.

Example: A CFO I recently worked with was hired not only for their financial acumen but because they were able to align financial strategy with the company’s ethical and governance goals, ensuring transparency and accountability at every level.

Tip: If you’ve led corporate governance initiatives, especially in highly regulated industries, now is the time to highlight that experience. Boards are increasingly focused on hiring executives who can balance the complex regulatory landscape while maintaining integrity and trust.

Global Push for ESG Accountability: A Regulatory Shift

As ESG reporting standards tighten across industries, leaders must navigate an increasingly regulated environment. The EU’s CSRD is expanding disclosure requirements, meaning that public companies will now have to report in-depth on their environmental and social impact, similar to how they report on financial performance. The International Sustainability Standards Board (ISSB) is also pushing for global consistency in ESG reporting.

Companies like Apple are even linking executive compensation to ESG performance. In other words, your success as a leader is now directly tied to how well you can meet the company’s sustainability and governance goals.

Tip: Familiarise yourself with the latest ESG regulations, whether it’s the CSRD in Europe or the SEC’s climate disclosure rules in the U.S. Demonstrating that you can lead your company through these regulatory changes will give you a competitive edge.

Why ESG Skills Are Essential for Future Leaders

Whether you’re a current executive or looking to step into a C-suite role, understanding and integrating ESG is no longer a bonus - it’s a business imperative. Leaders who can weave sustainability, social responsibility, and governance into the DNA of their companies will be best positioned for long-term success.

Example: I recently placed a CFO at a global energy company, not just because they had financial expertise but because they understood how to align financial strategy with the company’s sustainability objectives. They were able to drive growth while meeting strict environmental and governance goals—a skill set that’s increasingly in demand.

Tip: There are plenty of online resources, courses, and certifications to help you up-skill in ESG. Start building this knowledge now, so you’re ready for the challenges that lie ahead.

ESG is Redefining Executive Leadership

ESG isn’t just a passing trend, it’s redefining what it means to be a successful leader. As companies face growing pressure from investors, consumers, and regulators, they need executives who can lead with purpose. If you’re looking to advance in today’s executive landscape, the question isn’t just “Are you ready to lead?” It’s “Are you ready to lead with ESG at the core?”