ESG Success Factors: the importance of aligning goals with the strategy and the Board's performance

In recent years, growing awareness of environmental, social, and governance (ESG) issues has driven a profound transformation in corporate strategy. The adoption and integration of ESG goals into operations is now seen as imperative, particularly when sustainability is considered a long-term strategic guide that unlocks access to new markets, green capital, and regulatory compliance, while simultaneously reducing the company’s exposure to risks, losses, and reputational damage.

Recognizing that companies are now far more exposed in the market and that rating agencies develop their own methodologies to assess corporate ESG performance, both public and private investors are increasingly considering a company’s ESG performance when deciding where to allocate capital.

However, when we look at the national reality, according to the “Jornada 2030 Report: Corporate Sustainability Maturity in Portugal – Aggregate Portrait 2021-2023” (*) developed and published by BCSD Portugal in 2025, which evaluated the evolution of companies signatory to the BCSD Principles Charter, although sustainability is a strategic priority, its implementation is still at a very early stage.

Sustainability Strategy as a Key Factor in Corporate Transformation

For most companies, the main obstacles to sustainability remain the lack of financial, technical, and human resources, as well as the specialized knowledge required to initiate and implement a Sustainability Strategy. It is important to emphasize that a sustainability strategy is not limited to a Sustainability Report, a green certification, or generic ESG policies.

On the contrary, it may involve conducting a diagnosis of the organization’s maturity and its positioning relative to peers, trends, and direct competitors; defining and implementing an ESG strategy that creates long-term value and advantage; adapting the governance model; reengineering processes; or incorporating practices oriented toward the circular economy, social impact, and decarbonization, among other initiatives. Everything depends on the level of ambition and commitment the organization seeks to achieve. For this reason, a true transition to sustainability requires openness, commitment, and continuous involvement—especially from the Board.

In more mature organizations, the Board is seen as the main catalyst for integrating ESG factors into business strategy, as it defines the organization’s level of commitment (whether minimal compliance, risk mitigation, or sustainability leadership), sets long-term strategic goals (e.g., carbon neutrality, gender diversity in leadership, ethics across the value chain), and shapes organizational culture, promoting the message with intent at all levels. The Board’s role is crucial for ensuring credibility, resilience, and impact; without active sponsorship, initiatives tend to be fragmented, reactive, and short-term.

Beyond Compliance: A Comprehensive ESG Strategy

A growing trend in more mature countries, which may expand as awareness and ESG maturity consolidate in Portuguese companies, is linking Board compensation to the achievement of ESG objectives. In Portugal, listed companies such as Galp, EDP, Jerónimo Martins, and BCP have already adopted this practice, aligning sustainability strategy with measurable targets and monitoring them regularly.

Aware of the impact of the decisions made and operating within a collective responsibility framework, leaders and employees understand that the company’s success is directly tied to their involvement, and reflecting these objectives in ESG remuneration systems can serve as a true accelerator of corporate transformation. While for some managers sustainability is mere compliance, for some leaders it represents competitiveness and relevance in an increasingly sophisticated and demanding market.

How Can Timestamp Help?

We provide consulting services that combine regulatory, technical, and technological expertise to support our clients from diagnosis and ESG strategy definition, Double Materiality Analysis, Sustainability Reports, to the implementation of digital systems and advanced technological solutions, ensuring successful integration of ESG criteria into their operations and value chains in compliance with current regulations.

Discover how Timestamp can help you achieve your ESG Goals: Sustainability | Timestamp

(*) “Jornada 2030 Report: Corporate Sustainability Maturity in Portugal – Aggregate Portrait 2021-2023”. This study evaluated over three years the evolution of 143 of the 245 Portuguese companies signatory to the BCSD Portugal Principles Charter and Jornada 2030.