NextFrontier: The business case for ESG

NextFrontier Podcast: The Business Case for ESG - Episodes 3 & 4

Aine Crossan from Inspired

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In these episodes of NextFrontier, host Alastair Greener confronts a question that continues to divide boardrooms: is ESG a strategic asset or a regulatory burden?

 

For Aine Crossan, ESG director at Inspired, the answer begins with clarity. ESG is not a moral label, she argues, but a framework for identifying the environmental, social and governance factors that materially affect a company’s operations, value chain and resilience. Climate risk, labour conditions, cyber-security or board structure only become ESG issues when they genuinely shape long-term value. Because impacts differ by sector, geography and business model, companies must first understand which topics are relevant – and why.

 

This specificity is also why common ESG standards can be difficult to apply across industries. While some metrics appear universal, meaningful comparison requires sector-level guidance and a detailed picture of how companies operate. Two businesses may look similar in their direct activities yet face entirely different risks once supply chains are considered. For Crossan, this is not a flaw but the point: ESG forces companies to examine the real economic levers that underpin their resilience. In this sense, she sees ESG as an evolution of older ideas of corporate responsibility – moving from philanthropic gestures to measurable, trackable performance indicators tied directly to commercial outcomes.

 

Regulation often complicates this shift. Mandatory reporting can feel like an administrative burden, especially for organisations still building their data capability. Yet Crossan stresses that companies managing ESG well tend to be less risky and more efficient. Returns may not appear in the next quarter, but they accumulate over five to ten years. She points to Net Zero targets as an example: firms that redesign their operations with energy efficiency in mind frequently reduce operating and capital costs. Here, ESG and operational strategy align, revealing commercial benefits that go far beyond compliance.

 

Still, ESG critics make a compelling point when they describe the agenda as overly bureaucratic or misaligned with practical business needs. Crossan accepts that when ESG becomes little more than reporting and data collection, it risks becoming an illusion – signalling intent without delivering change. The difference, she says, lies in intent and integration. Companies that embed ESG into governance, investor communications and culture see the long-term value. Those that treat it as a tick-box exercise do not.

 

Part of the frustration stems from ESG’s public image: framed as a moral obligation, it becomes an ideology rather than a business tool. Reframed as a route to lower costs, reduced risk, stronger talent pipelines and better investment access, its strategic purpose becomes clear.

 

Crossan extends this logic to financial reporting. ESG, she argues, is already present in balance sheets – “you just can’t see it”. Traditional finance looks only a few years ahead, while ESG focuses on the forces that will shape performance over decades. Consider a manufacturer reliant on water-intensive processes. If future water availability or pricing becomes unstable, revenue, costs and asset values may all come under threat. Investors need to understand that exposure, but companies must first identify which among the many potential risks and opportunities are truly material. From hundreds of possibilities, only a handful may significantly influence long-term performance – but those few matter enormously.

 

These tensions become sharpest when short-term profit collides with long-term sustainability goals. Crossan’s advice to executives is disarmingly simple: ask, what is the cost of inaction? Using solar installation as an example, she notes that delaying investment may save money today but leave companies exposed as demand increases and prices rise. ESG decisions, she emphasises, are not about ideology but timing – choosing the horizon that best aligns with corporate strategy. Profit may sometimes come first, but ESG must always “have a seat at the table”, considered alongside other strategic factors rather than sidelined.

 

Episode four closes with a reflection on global regulatory tensions, particularly the divergent approaches emerging between Europe and the United States. Concerns raised by US regulators about European ESG rules highlight broader debates about cost, benefit and the purpose of ESG regulation. Crossan notes that these differences reveal unresolved questions: Is ESG meant to serve public policy goals, protect the public good or maximise shareholder value? For companies operating across multiple jurisdictions, navigating these competing expectations is increasingly complex – yet also a reminder that ESG is now inseparable from strategic decision-making.

 

What emerges from the conversation is neither an idealised vision of ESG nor a dismissal of its challenges, but a practical argument: ESG is most powerful when treated as a long-term commercial discipline. When understood, integrated and executed with intent, it sharpens strategy, enhances resilience and builds value. When reduced to reporting, it becomes exactly what sceptics fear – an illusion.

 

NextFrontier: Rethinking the ESG Investment Case - Episodes 1 & 2

 

NextFrontier: Why geospatial data is becoming the new bedrock of ESG intelligence - Episodes 5 & 6

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NextFrontier is brought to you by Inspired