From ESG Compliance to Capability: How Finance Leaders Build Sustainable Value

As ESG expectations intensify, organisations must move beyond tick-box compliance towards strategic, capability-led sustainability. It is no longer a reporting obligation. It is a strategic capability that defines how organisations lead, govern, and create lasting value. 

In this ESG Podcast, Tina Thomas, Head of ESG at InCorp Singapore, and Eva Loong, Executive Director of Group Commercial at Ascentium, explore how organisations can embed ESG into leadership, governance, and decision-making. Drawing on real-world practice and academic insight, the discussion focuses on building ESG capability, navigating short-term financial pressures, and aligning sustainability with long-term value creation.

This session offers practical insights for finance professionals, auditors, senior leaders, and boards seeking to strengthen ESG literacy and future-proof their organisations in a rapidly evolving regulatory and stakeholder landscape.

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Transcript

SPEAKER_01 0:00

Welcome everyone and thank you for joining us today. I'm Eva Long, Executive Director of Group Commercial at Adsentium Group. Adsentium is a Singapore headquartered global business services platform supporting companies to operate across complex international markets. Our group of companies provide end-to-end solutions from corporate secretarial, accounting, tax, HR, payroll, cross-border compliance to ESG advisory, helping clients turn regulatory change into sustainable value. Today, we support over 60,000 client entities across the 20 plus market worldwide. ESG has evolved. For many organizations, it started as a compliance exercise. Today, leaders are asking how ESG can actually inform decisions, protect value, and support long-term sustainable growth. That's what we'll explore in this session today. How ESG becomes a true organization capability and the role finance leaders play in driving it. I'm delighted to be joined by Tina Thomas from IncOP Singapore, a subsidiary of Asentium Group. Tina leads ESG and sustainability initiatives and brings over 15 years of experience in ESG strategy, sustainability reporting and decarbonization, particularly in complex, carbon-intensive sectors. Tina, it's a great pleasure to have you today. A very good afternoon to you today. Thank you, Eva. It's great to be here. Tina, my first question to you will be ESG started as a compliant exercise, but why isn't that enough today? What goes wrong with the tick box approach?

SPEAKER_00 1:41

Thanks, Eva, for the question. It's a very interesting one. As you can see, over the years, the regulations have actually matured, and so has the scrutiny from the different types of stakeholders, whether it's customers, regulators, banks, activists, you name it. So what this means is that companies cannot just uh produce a report and um and and not follow through the claims that they make in the narrate in the in the reports. So what I've seen actually in some certain instances within the companies I sit through the at the boards, the companies come up with really good uh narratives and and and um they they have really good structurally good presentation, good structures, but um when a board member asks a question, so how does this translate in terms of your financial exposure or your operational risk, there that's that that could be drop in dropped silence. And one of the reasons why I've seen is because it is, I mean, it's taken as more of a compliance exercise, making sure you follow all the regulatory requirements and not really driving it through the organization itself. The other issue of using ESG as more for this tick box exercise is that it doesn't drive the fundamentals within the organization, which is do you have the right governance structure? Do you have the data which is decision grade, or how accountable are you within the organization for ESG matters? So, which all of this translates into you might have a great report, but are you missing the opportunity to make your business resilient and also future-proof your business? So the risk that you end up with this sort of tick box exercise is that you have a story, but you can cannot be defended, and it becomes a bit more problematic when you face assurance questions, which will become mandatory in the next few years, or regulator-style questions, or uh investor due diligence, or even internal audit probing, some of the gaps actually might surface up. So, for example, some of the gaps could be your definitions are not consistent, there's no the data is not really reconcilable or responsibilities are aren't clear. So then this becomes ESG becomes more of a uh leadership and a risk issue rather than just a communications task.

SPEAKER_01 4:18

Right, Tina, thank you. Well, with the board now expect the finance team not just to provide numbers but to deliver ESG insights and guide investment and risk decision. Where do you think, my next question will be where do companies typically get stuck when moving ESG beyond compliance?

SPEAKER_00 4:35

It's a very interesting question in terms of where this all of this, what is the main pain point for companies? And it is actually organizational design itself because ESG sits, mostly you'd see ESG sits either in a sustainability team or it could be a communications team or any team that might actually want to adopt it for just the reporting deliverable perspective. It's not really a cross-functional management capability. So, what this actually means is that when one department owns it, the other department feels that they just have to provide the data to that department and doesn't really integrate it into their business decisions. Um so I've seen organizations struggle in terms, especially when the ownership is very unclear. For example, Roosevelt's function thinks that hey, ESG is not my problem, it could be finance problem, or the finance might think it's a sustainability team problem, or even the operations might actually think it's extra work for me. So uh so the accountability, when accountability is fuzzy, then ESG becomes a coordination problem rather than a leadership sort of system. Another issue I've seen is that ESG literacy among the decision makers, even though we are aware of all the terminology that comes with ESG, the frameworks that's available globally, it we're not really comfortable with translating ESG into real business uh levers. So, what how does it impact, for example, budgeting purposes, or how does it impact our procurement criteria? How do we allocate our capital expenditure? Um, how how do we manage our performance scorecards, incentives, or even risk appetite? So in fact, the real shift happens when um ESG Insights is actually used to guide the trade-offs, which is about prioritizing CapEx, tightening supplier requirements, or changing product specifications, addressing targets, or even aligning incentives. So in that case, ESG will stop being just a reporting exercise to more a part of how organization integrates it to make decisions.

SPEAKER_01 6:50

Right, Tina, thank you for that. It looks like ESG is another thing that has to be top-down approach where culture and ownership is everything. I see that when accountability is clear and ESG is connected to real decision, it shall then stop being a report and start shipping priorities. Well, that's my understanding from you. So my next question to you is as ESG moves beyond compliance, how should finance leaders rethink their role in building real capability?

SPEAKER_00 7:20

So, yeah, it's uh it's a very heimly question, especially with the implementation of ISSB from our. So, finance leaders could play the role of integrators because the moment ESG connects with the risk capital allocation and performance, it becomes real. Uh, finance has the credibility, the discipline, and the governance to actually turn ESG from just being something that's a good intention uh to something more decision useful. So, in my experience as a finance team or the finance leaders could start off even just asking hard practical questions in terms of how does this ESG metric, how does it act, how how does it affect our decision? Is it decision useful? How do we reconcile the data? Uh, where can we evidence it and how can we defend it under assurance? So that sort of pressure can actually help to improve the data quality and the governance very quickly because it forces on clarity, definitions, control, ownerships, and even audit trails. The other um aspect where finance leaders can play is about embedding ESG into the existing rhythms or the operating rhythms within the organization, whether it's monthly performance reviews or it could be investment committee templates or enterprise risk reporting, performance governance, and so on. So the goal is not just ESG to be another sort of reporting dashboard, but it's about making it a part of a co-operating system. So when finance takes this sort of role of ESG quite seriously, they can actually help to move ahead from just being a storytelling element to more of a value creation or value protection, which can actually protect or they can safeguard the cost of capital, secure, help secure customer contracts, and reduce operational disruptions, and building resilience into planning. Right, Tina.

SPEAKER_01 9:17

Looks like finance isn't isn't just doing reporting anymore or coordination like you know in the past we see in ESG reporting. Looks like it's now an expectation for the finance team to shape ESG's strategy and support decision making. Is my assumptions correct? Yes, absolutely. Thank you. Now, next, Artina, how can organizations balance short-term financial pressure with long-term sustainability without one undermining the others?

SPEAKER_00 9:46

Again, this is a very, very interesting uh point because uh a lot of the challenges which organizations face now is about that short-term uh financial pressure with that long-term sustainability agenda. And it's actually a question that you hear at every boardroom, and in terms of okay, how do we balance these two? So, if ESG is framed just as a long-term aspiration, then it will lose because the near-term pressures, especially with the current situation, is much more urgent. So, what really works is looking at ESG from a more resilience and a downside protection, not just as a future-looking um sort of ambition. So the moment the leaders start looking at ESG from a risk management and competitiveness perspective, it becomes easier to prioritize even under pressure. For example, I've seen mindships, in fact, uh with the implementation of TCFT, we have seen this happening as well. In terms of we have started quantifying the risk exposure. So, for example, carbon costs, how does it impact the bottom line, regulatory compliance risks, supply chain disruptions, how does it impact the business operations, financing constraints, what is your reputational risk, and how can it actually impact your cost of capital and even customer retention? So when it becomes measurable, it stops being ideological or philosophical. So the most pragmatic approach to connect is to connect sustainability initiatives with near-term outcomes. For example, how do we avoid our future compliance penalties? How do you protect our key customer accounts? How do we strengthen the financial readiness or improve our operational efficiency and reduce the disruption? So, when sustainability is linked to real business risk and resilience, the trade-off between short-term and long-term actually becomes more balanced and rational.

SPEAKER_01 11:49

Right. We often hear about this common phase called building ESG capability. What does it really mean day-to-day for finance and corporate governance?

SPEAKER_00 11:59

That's uh that's again a question which gets asked quite often. So, what does it mean from a day-to-day? What actually means it's it's about governance, it's about what is do you know how you manage the ownership within your organization, who owns the ESG, what is the board oversight, what sort of decisions are being made, what are the escalation pathways and who's accountable? And this should be made it should be made clear that this should not disappear once the reporting cycle is over. It should be something that should that's enforced throughout the year and it's also continuously used within the organization. So, what does it mean practically? It means having the systems that can produce uh decision grade data, for example, having the right methodologies, controls, documentation, audit trails, rather than just have some spreadsheets with maybe one or two people in the organization understand and use. So if it's a system, it has more buy-in, there's more adoption, and there's more stakeholders involved, and this actually makes it more practical and useful. In my client work, some of the biggest improvements I've seen is with the implementation of TCFT and now with IFR, S1 and S2, is that it forces sort of a discipline from a top-down perspective, consistency and comparability, and the linkage to the financial materiality is really seen as useful because it also integrates with the risk and the governance process. So when capability is real, the organization actually can respond much better to the risk and the risk and opportunities, or even with to scrutiny, such as you know, questions that come from auditors or investor due diligence, regulate risk requests without panic. That's a real difference between ESG as a project versus ESG as a management system.

SPEAKER_01 13:50

Yeah, Tina, looks like we still go back to question number two earlier on, where we mentioned that ownership, culture, and the top-down approach is still the way to go. Having said that, also include proper structures and processes in place so ESG Insight can consistently provide informed decisions and not just reporting exercise. Do I get it right?

SPEAKER_00 14:14

Absolutely.

SPEAKER_01 14:15

Right. Next, I would like to understand what are the most common missteps organizations make when trying to move ESG reporting to real capability.

SPEAKER_00 14:25

Yeah, so some of the challenges I've seen is that sometimes when you become, especially if you're ambitious, it can also lead to over-engineering. So, for example, you think about ESG means building really complex frameworks or fancy scorecards or long list of metrics that you have to actually monitor and measure, measure and monitor, sorry. So, but it's not really about building that complex system, it's about getting your fundamentals right. It's about ownership, understanding what are your key parameters that impact your business, and then how do you get reliable data to manage that? So it's not just about complexity, it's about making sure the foundations are right in the first place. Another issue I've seen is that a lot of companies, when they start off with ESG, especially when they knew, they just copy peers. Uh they look at scramble through the peers sustained report and say, okay, we're going to report under the same same metrics. The challenge with that is that they actually don't really understand if those metrics really impact their business model. Is it really relevant to them? Or how does do these disclosures really link to their strategy, their capital location, and risk? The other uh common point of failure I've seen is ESG is sometimes it sits separate to the finance and operations. So it becomes the data might not be reconciled. Uh, there is a set of ESG data, it's actually sort of remote to financial data, operating data, and so if that linkage between finance and to the operations is not there, then it's very difficult to drive anything that's meaningful, meaningful within the organization. And also you might get different versions of truth as well. And um obviously the most risky moment is when you have a report, it actually goes out and then it gets challenged. And when it gets challenged, when you don't have um valid assumptions or valid evidence against your challenge, it becomes a big gap and problematic for the organizations.

SPEAKER_01 16:27

Right, thank you, Tina. So to add on to what you have to say, so is ownership, culture, tone from the tone from the top, having proper structures and processes. So starting from the basic also matters, just building from foundation from foundations and not to be too ambitious, right, in doing this ESG reporting. So before we wrap up, you know, a lot of us think that ESG is changed the world, you know, and make the world a better life. But what we can see is may not be, it has financial impact, right? So, what is the single most important mindset shift you want participants to take away from today?

SPEAKER_00 17:09

Thanks, Eva, for the question. I think the my one of the most important minds shifts I would um recommend is to look at ESG more as an internal management tool, not just as a reporting product. It it if if done rightly, it could actually help to make better decisions and also help with stronger governance because it will help you understand what is the best way to allocate your capital, you manage your risk, run your operations, and set accountability. Sustainability value comes from capability. Managed not compliance, because compliance might actually get you through the reporting requirements and get you compliant to the current regulations, but it's capability that will get you through scrutiny, assurance, investor questions, and real business disruption.

SPEAKER_01 18:02

Right. Thank you so much, Tina, for your valuable insights. ESG has evolved and is more than compliance. It's about building capability that drives better decisions, strengthen governance, and support long-term sustainability value. Finance leaders play a central role in translating ESG into action and balancing short-term priorities with sustainability growth. Thank you for joining us today, and thank you, Tina, very much.