Fundamentals of ESG

Many business leaders focus on the short term because they are under constant pressure from shareholders, capital markets, and investors to generate immediate profits. So are quarterly reports, bonuses tied to annual performance, and fierce competition. This incentivizes decision-making that prioritizes results today over the full weight of potential consequences tomorrow. It fosters a mindset where many companies ignore or underinvest in critical areas—talent development, employee well-being, social responsibility, or sustainable infrastructure, among others—because more often than not, they are negative in ROI and if they generate results, they do so over a sustained period of time, or are so insignificant as to be invisible.

Consequently, at the societal level, surplus, or—to put it more bluntly—purpose and well-being, neglect employee loyalty, shifting the focus toward diminished motivation, reputational losses among more responsible consumers, and the negative social effects brought about by policies of discrimination, inequality gaps, underemployment, or deteriorating environmental geopolitics, among others. Such losses are also, in the long term, likely to become counterproductive to financial results; this is paradoxically because purpose-driven and long-term-oriented companies enjoy better community relations, improved talent, and greater innovative and systemic resilience to sustained crises.

In many modern organizations, leaders tend to prioritize short-term profits over long-term well-being—for employees, society, and even the business itself. This short-termism is not simply a matter of personal preference; it is shaped by structural, cultural, and economic pressures that reward immediate results and punish slower, more sustainable progress.

Company leaders could often focus on short-term goals to show quick results and control costs. For these companies, owners/board should set long-term priorities and governance that support sustainable growth. For micro/small businesses, limited manpower, financial constraints, and lack of time or understanding may make it harder to adopt ESG practices.

Understandably, businesses from the get go, focus on achieving faster ROI, thus setting aside impact to environment, society or community. However, as they progress, it is imperative that they shift focus on more sustainable practices to make their businesses more purposeful, creating long term impact not only on their marketability but also on their impact to stakeholders (workers, existing and future investors/suppliers, community, environment and customers). As they say, one business' change of mindset creates ripple effect to competitors and partner industries alike.