Media reports have been speculating that Joe Biden’s first presidential veto might be used to counter Republican-led opposition to a White House rule that allows fund managers to consider environmental, social, and governance (ESG) factors in their investment decisions.

This political tension in one of the world’s most powerful countries shows how important ESG issues have become in the public and private sectors. New challenges call for new styles of leadership. If the court changes, so must the game. Effective ESG leaders will be at the forefront of this transition.

I have spent the better part of 30 years as an equity partner at KPMG Risk & Regulatory. I also hold a full professorship at Rotterdam School of Management, Erasmus University, and I am a speaker at the ESG Innovation Institute, launched by KPMG in partnership with Nyenrode Business University.

Across these various roles, I have identified seven key qualities that separate leaders who are capable of steering organisations through an ESG transition from those who aren’t.

1. They have a moral compass

At the most fundamental level, effective and successful ESG leaders are willing to put in the work for the right reasons. Their moral compass points true north, allowing them to be compassionate for individuals and communities that will bear the impact of their actions. They are passionate about maximising their positive footprint on the world.

Leaders who try to push ESG agendas through purely to be more attractive to certain investor groups are guilty of ‘window-dressing’. It is only a matter of time before their insincerity is seen, at which point they lose all credibility. Change must come from a strong personal belief that ESG transitions are ethical.

2. They are curious

Before a problem can be solved, it must be measured. Quick fixes, without understanding all the factors at play, are like cutting the head off a weed. It will come back worse further down the line. So, leaders must be curious. They should want to see the statistics so they know which issues can be fixed now, which will require a long-term effort and which should be prioritised. A plan of action that is devoid of detail is no plan at all.

3. They are committed

The ESG battle will not be finished by Christmas. The scale of the challenges is massive, meaning entire organisations need to be transformed. A solid plan provides a roadmap to positive change, but a leader still has to be able to walk the whole way, carrying the company with them. Successful leaders draw stamina and commitment from their personal beliefs, allowing them to keep driving forwards. They do not look for opportunities to offload their responsibilities on ESG officials or middle-managers.

4. They are creative

A leader whose commitment to ESG is half-hearted and based on attracting investment is ‘greenwashing’ and ultimately bad for long-term growth. A leader who suspends all carbon-emitting operations at once is on a path straight to bankruptcy. Successful ESG transitions are overseen by leaders who can use sustainable practices to open new revenue streams and harness innovations in technology, for instance by trading carbon credits.

5. They are courageous

Corporate culture can be harsh on failure, but it is a vital learning experience. It is unrealistic to expect leaders to push through large-scale organisational changes without breaking a few eggs. Courage, resolve and boldness are required. Successful ESG leaders are not swayed by CEO-bashing, wokeism, or cancel culture. They take calculated risks and learn from their mistakes. They are, to co-opt a phrase from former US President Theodore Roosevelt, the “people in the arena”.

6. They know how to cooperate

How does one ant build an anthill? The answer is, it doesn’t: many do. Similarly, when leaders are pushing for organisation-wide changes, no matter how curious, committed, courageous and so on they are, they cannot achieve their goals alone. Effective leaders know this. But, because their leadership is built on being brave, informed and true to their moral values, they are able to rely on the support of talented people around them. They keep communication channels open, forming networks and launching new projects in collaboration with others.

7. They are consistent

This does not mean doing the same thing all the time. Situations will change and leaders must adapt and evolve. Consistency is about walking the talk. If leaders demand high standards of their employees, they should apply those same standards to their own actions. Not to do so is hypocritical, which is almost guaranteed to alienate people. On the other hand, small but concrete actions, like flying less and taking the train more, reinforce to your employees that you are all in it together.

When combined, these qualities all feed into each other, strengthening a leader’s overall ability to implement changes successfully. Of course, in explaining these qualities, I have painted a picture of the perfect leader – and no leader will ever be perfect. However, we can all strive for perfection. Through reflecting on these traits, leaders can recognise their own self-development needs and become more effective agents for change.

Dr Muel Kaptein is a partner at KPMG Risk & Regulatory, and a professor of business ethics at Rotterdam School of Management, Erasmus University.