As South African pension funds continually refine their approaches to long term sustainability, the role of ESG considerations is increasingly in the spotlight. Globally, ESG frameworks are evolving, from more stringent disclosure rules in the EU to ideological backlash in parts of the United States. Locally, trustees are navigating a landscape shaped by the evolving interpretation of Regulation 28 and the FSCA’s latest guidance on sustainability. Against this backdrop, Harvard Business Review’s 2024 release, ESG: The Insights You Need, offers a timely and practical contribution to the ESG conversation.
The core message is that ESG is no longer a peripheral concern – it is central to managing risk, sustaining performance, and aligning with stakeholder expectations. As HBR stated, ‘Companies can’t sit on the sidelines anymore because, well, there are no sidelines. In a transparent world, your silence will speak volumes.’ For pension funds and their stewards, this is particularly salient.
Trustees are under pressure not only to deliver strong financial returns but also to meet the growing expectations around sustainability and responsible investment. Roughly 70% to 90% of respondents in the 2023 Edelman Trust Barometer said they “expect CEOs to take a public stand on issues such as climate change, discrimination, and the wealth gap. These are choppy waters to navigate. But for your stakeholders, your consistency becomes valuable.”
ESG as an endurance strategy
One of the most valuable themes in the review is the idea that ESG is a long game – more of a marathon than a sprint. In volatile and noisy markets, investors can lose sight of the long term. But HBR reinforces that strong ESG integration, done consistently over time, is what differentiates short term compliance from long term value generation.
The review is divided into three key sections: “Building an ESG strategy”, “Living into ESG” and “Managing social responsibility”. These sections and themes are reminders of what good, basic ESG strategies and components for businesses can look like. Chapters within these three sections are short, digestible reads referencing case studies of businesses facing common ESG challenges today. Each chapter is a short article by a different author, including insights from leading thinkers, professors and business leaders across different industries.
Practical examples with broader applications
Some lesser-discussed opportunities for businesses are explored, such as the importance of aligning joint ventures with ESG goals and exploring how ESG partnerships with non-profits can meaningfully benefit corporates. Other standout chapters delve into the risks and responsibilities associated with rapidly evolving technologies like artificial intelligence.
OpenAI’s governance model is examined, which uniquely frames its fiduciary duty as being to humanity—not shareholders. The structure allowed its board to be easily overruled when attempting to oust one of the organisation’s co-founders and CEO.
Another section explains ESG principles in responsible computing, coding efficiency, and ethical data practices—highlighting emerging risks that are not yet widely understood but are highly relevant for long term investors. While these topics may feel removed from traditional pension investing, the themes of transparency, governance, and systemic risk apply directly to any fund serious about ESG stewardship.
Sharing ESG knowledge is beneficial for all stakeholders
One of the strengths of this HBR publication lies in the practical takeaways provided at the end of each chapter. These summaries distil complex issues into clear, actionable points, which are helpful for those who want to apply the insights at an operational level. Whether you’re a sustainability veteran or just starting to integrate ESG more meaningfully into investment processes, these “nuggets” are relevant to modern ESG challenges and helpful tools for driving internal change.
As South African pension funds respond to rising ESG expectations and the broader transition to a sustainable economy, knowledge sharing is more important than ever. HBR reinforces that ESG excellence isn’t about trend-following, it’s about consistent, thoughtful execution.
For trustees and asset managers seeking to build portfolios that are resilient, responsible, and future-fit, ESG: The Insights You Need is a worthy addition to your reading list.