� Strong institutions, transparent processes, and predictable regulations reduce risk, attract investment, and enable environmental and social initiatives to succeed.

� Living wages, labour rights, and community engagement are essential for sustaining public trust and preventing project backlash.

� In emerging economies, environmental goals are achieved more quickly and effectively when Governance and social pillars are firmly in place first.

HOW WE GOT HERE

They would filter out investing in tobacco, weapons, and apartheid-era South Africa. The 1990s broadened the lens: environmental risk( companies that could contribute to oil spills, ozone damage, and the destruction of primary forests) began to be priced as investments that were to be avoided.

But soon after, corporate scandals, such as Enron, reminded markets that weak boards could destroy value faster than any macro-economic trend.

Two milestones in the early 2000s helped codify the idea. First, the UN Global Compact’ s 2004 report,“ Who Cares Wins”, gave the innocuous three-letter acronym its mainstream debut, arguing that environmental, social, and governance factors were not morally based sideshows or extras, but integral drivers of long-term perfor-

mance.

Shortly afterwards, in 2006, the UN issued its“ Principles for Responsible Investment( PRI)”. This guided asset owners and managers in committing capital to ESG integration on a global scale.

Over the next decade, fueled by working groups, a plethora of parties entered the fray- a menu of dishes to suit any corporate or regulatory palate, an alphabet soup of standards.

Enter Global Reporting Initiative( GRI), Sustainability Accounting Standards Board( SASB), Task Force on Climate-related Financial Disclosures( TCFD), and later the International Sustainability Standards Board( ISSB), all squeezing into the curriculum of reputable MBA courses and the product range of corporate consultants.

These groups developed metrics and frameworks( attempting measurement of corporate“ goodness”), disclosures, and dashboards. The result: a movement that migrated from ethical screening to risk-adjusted returns, advocating ESG as a core license-to-operate.

And yet, the framework’ s sequence, an E, then S, followed by a G, discreetly hardwired a Northern worldview based on the conclusion

Founder and managing director of Hibiscus Petroleum.

that carbon emissions and climate change are the dominant systemic risk soon. In many emerging markets, that order feels upside-down!

Where courts are slow, land titles uncertain, procurement opaque, and public services stretched, Governance is not a pillar among equals or to be regarded as an afterthought.

Indeed, it is the foundation slab. Without it,“ E” and“ S” frequently become well-meaning aspirations that leak value, trust, and, ultimately, impact.

FITTING THE REALITIES

Start with first principles. Governance is the capacity to make promises and keep them- in companies, communities, and the State. It is the bedrock of the rule of law, including property rights, contract enforcement, transparent budgeting, beneficial ownership clarity, and predictable regulation.

It is boards that ask hard questions; auditors who can say“ no”; truly competitive procurement; and data that can be verified. When this scaffolding is strong, resources flow at a lower cost of capital, projects are built faster, and social bargains endure.

When it is weak, the best“ E” and“ S” intentions stall at the starting gate.

Consider a typical energy or infrastructure project in an emerging market. The environmental objectives might be high: a gas-to-power