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Beyond buzzwords: Turning ESG into real sustainability

Darron Scorgie cuts through ESG confusion, showing how insurers and corporates can turn risk frameworks into real sustainability.
Written by
Darron Scorgie
Published on
October 17, 2025
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Darron Scorgie of Old Mutual Insure used his CGIC Summer Conference slot to cut through confusion and get practical.  

First, he separated two terms that are too often used interchangeably: ESG and Sustainability. ESG, he argued, is a governance framework for assessing non-financial, systemic risks, environmental, social and governance, that become financially material over time. Sustainability is what happens next: the deliberate actions an organisation takes, informed by ESG analysis, to create long-term resilience and value.

Why integrate ESG? Scorgie offered four drivers:

  • It’s financially material: Today’s non-financial issues become tomorrow’s earnings impacts.  
  • Market dynamics are shifting: Customers, investors and insurers are already repricing products and relationships around sustainability performance.
  • Policy signals are rising: Think carbon taxes and Europe’s carbon border adjustment mechanism, and  
  • Regulation is accelerating: South Africa’s financial regulators are moving toward mandatory climate risk disclosures by 2027, while the CIPC will require sustainability reporting for public companies around 2025–26.

He grounded the case with concrete examples. Climate change is already disrupting trade and insurance: New South Wales suffered near-zero crop yields after wildfires; KZN floods forced Toyota to spend billions on repairs and operations; a single hailstorm in Johannesburg in 2023 cost more than R130 million. Social and governance events also bite, mining strikes and logistics disruptions cost hundreds of millions per day, and corporate failures like Steinhoff and EOH demonstrate how governance lapses cascade into losses. Investor and consumer sentiment is aligned with these realities: most global investors expect companies to manage ESG risks even at the expense of short-term profit, and a large share of consumers say they’ll walk away from companies that mistreat people or the environment.

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“Compliance is costly and data-intensive, so starting now, while it’s still voluntary, is far easier than scrambling under mandate.”

Darron Scorgie
Head of Responsible Investment at Old Mutual

For insurers, the loss trend is unmistakable. Climate-related property claims that averaged well below R100 million a decade ago now sit in the R250–R300 million range annually. Scorgie argued the industry must augment backward-looking models with forward-looking climate scenarios, while managing concentration risk in vulnerable geographies and sectors. Transition risks are just as real: policy shifts, technology change and market sentiment can reprice carbon-intensive assets abruptly. The answer, he said, is a paced but purposeful “just transition” that balances decarbonisation with jobs, community resilience and growth.

Scorgie then set out Old Mutual’s response. A group-wide climate change task force coordinates workstreams across investing, operations and reporting. On the investment side, Old Mutual has measured financed emissions across its portfolios, set interim decarbonisation targets (including a 25% reduction in listed-equity intensity by 2030), and uses stewardship, often via alliances like Climate Action 100+ and the Net-Zero Asset Owner Alliance, to push high emitters onto credible transition paths. Operationally, investments in rooftop solar, water and waste initiatives are delivering attractive returns, reinforcing that many sustainability moves are good business as well as good citizenship.

What does this mean for corporates and exporters? Expect rising demands for supply-chain transparency, especially into Europe: disclosure of emissions, labour practices and governance will be checked “at the door.” The International Sustainability Standards Board’s IFRS S1 (general sustainability) and S2 (climate) are becoming the global baseline, with regional rules converging between 2028 and 2030. Compliance is costly and data-intensive, Scorgie warned, so starting now, while it’s still voluntary in places, is far easier than scrambling under mandate.

In the Q&A, he framed unemployment as a systemic sustainability risk that will inevitably become financially material, pointing to Old Mutual’s focus on a just transition, decent work and SME financing. On global north–south inequities, he advocated coordinated industry engagement to shape standards that recognise emerging-market realities, work Old Mutual pursues through international investor coalitions.

His through-line was clear: Treat ESG as disciplined risk management, act decisively to build sustainability, and do it in a way that grows the real economy. The costs of moving are visible, but the costs of waiting are compounding.

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