Beyond Greenwashing: Setareh Heshmat’s Guide to Authentic ESG Leadership

 

The ESG Era Is Here — But Authenticity Is Missing

Over the last decade, ESG — Environmental, Social, and Governance — has transformed from a niche concept into a global financial imperative. From boardrooms to billion-dollar funds, nearly every company now claims to operate with sustainability in mind. But according to Setareh Heshmat, not all ESG is created equal — and much of it isn’t real.

“We’ve entered a phase where saying you're ‘green’ is more valuable than actually being green,” says Heshmat, ESG Investment Director at a major Singapore-based venture capital firm. “We’re drowning in sustainability jargon while the planet continues to heat up.”

As one of Southeast Asia’s most respected ESG strategists, Heshmat is calling for a new phase: authentic ESG leadership. Not marketing. Not reporting theater. But transparent, accountable, data-driven impact — rooted in long-term thinking and moral clarity.

What Greenwashing Looks Like in 2025

Greenwashing has evolved. It’s no longer just false advertising or vague sustainability pledges. Today, it shows up in more subtle — and dangerous — forms:

• ESG scores inflated by self-reported data

• Carbon offsets used to delay real emissions reductions

• Social impact funds with no community consultation

• Board diversity measured in numbers, not influence or equity

• Slick sustainability reports that mask labor violations or extractive supply chains

“You can’t fix climate collapse or systemic inequality with branding,” Heshmat warns. “But many firms are trying exactly that.”

Setareh’s Framework: The Five Principles of Authentic ESG Leadership

After years working across impact investing, ESG due diligence, and corporate sustainability consulting, Setareh developed a framework she now teaches to founders, boards, and fund managers. She calls it ESG-A — short for Ethics, Systems, Ground Truth, Accountability, and Action.

1. Ethics First

“ESG starts with intention,” she says. “If your goal is compliance, you’re already behind.” True ESG begins with ethical clarity: What kind of world is your business helping create?

2. Systems Thinking

Sustainability isn’t a department — it’s a system-level responsibility. From supply chains to product design, executive pay to data privacy, ESG should inform every strategic decision.

3. Ground Truth

She insists on “truth from the ground.” Not just dashboards and spreadsheets — but stories, audits, and community feedback that reflect how a company truly operates.

4. Accountability

Impact goals must be enforceable. Setareh includes ESG KPIs in term sheets, makes founder bonuses conditional on impact delivery, and supports third-party verification. “If it’s not tied to incentives, it’s just PR,” she says.

5. Action Over Optics

Authentic ESG leadership means doing the work before announcing it. “If you have a great headline but no operating plan, you’re not leading — you’re lobbying.”

Case in Point: ESG in Setareh’s Portfolio

In her role as ESG Director, Setareh has worked with over 50 startups in Southeast Asia. Here’s how she applies her framework:

• A Malaysian clean logistics company was required to publish a public carbon ledger — updated monthly — before funding was disbursed.

• An Indonesian agritech platform integrated farmer feedback loops into its impact reporting — turning ESG from a top-down to bottom-up model.

• A Vietnamese AI firm developing flood prediction tech tied its Series A tranche to deploying the tool in two at-risk provinces within 18 months.

These aren’t conditions of distrust — they’re infrastructures of belief, designed to protect both mission and capital.

Why Leaders Struggle With Authentic ESG

According to Heshmat, many founders and executives want to be authentic — but feel constrained by:

• Pressure from investors to meet near-term financial milestones

• Lack of ESG expertise within their teams

• Overwhelm from fragmented standards and frameworks

• Fear of admitting imperfection

Her message is clear: “You don’t have to be perfect — you just have to be honest, and accountable to progress.”

The Cost of Inauthenticity

The financial risk of greenwashing is growing. Regulatory bodies in the EU, U.S., and now Asia-Pacific are beginning to crack down with audits, fines, and investor backlash.

But Heshmat argues the bigger risk is cultural and reputational. “Consumers, employees, and even LPs are smarter now. They can tell when you’re faking it. And they’ll walk away.”

Training the Next Generation of ESG Leaders

Through her blog, mentorship work, and speaking engagements, Setareh is cultivating a new kind of ESG leader — one that’s:

• Data-driven but ethically anchored

• Comfortable with complexity and transparency

• Willing to say “we got it wrong” and course-correct

• Inclusive by design, not posturing

• Systems-aware and action-oriented

She also regularly hosts workshops and roundtables for climate founders, corporate sustainability heads, and fund managers seeking to operationalize authenticity in their ESG journey.

Final Thoughts: ESG as Leadership, Not Optics

For Setareh, ESG is not a buzzword — it’s a reflection of character, of leadership, and of responsibility to future generations.

“Anyone can write a sustainability report,” she says. “But real ESG leadership means doing the hard, slow, unsexy work — especially when no one’s watching.”

As companies continue to navigate ESG commitments under increasing scrutiny, voices like Setareh Heshmat’s are shaping what it truly means to lead with integrity in a time of crisis.

Setareh Heshmat Explores How Women Are Shaping Impact Investing

 As the global finance sector reckons with calls for greater equity, transparency, and sustainability, women are quietly but powerfully transforming the world of impact investing. At the forefront of this shift is Setareh Heshmat, ESG investment director and sustainability thought leader based in Singapore.

In this feature, Setareh explores how female investors, founders, and fund managers are reshaping not just who gets funded — but how capital behaves.

The Gender Investment Gap — and Why It Matters

“For decades, women were largely excluded from major investment decisions,” Heshmat says. “Even today, less than 3% of global venture capital goes to women-led startups. That’s not just unjust — it’s bad economics.”

She points to multiple studies showing that female-led companies tend to outperform their peers on capital efficiency, social impact, and team diversity. Yet, systemic bias continues to restrict access to capital.

“Impact investing gives us a unique opportunity to rewrite the playbook,” she adds.

Women as Catalysts for Sustainable Capital

Setareh highlights a growing body of research that shows female investors are more likely to prioritize environmental and social impact in their portfolios. In her own experience managing ESG investments, women founders are also more likely to embed purpose into business models — not treat it as an afterthought.

“When we invest in a woman-led climate startup, we often find that ESG alignment is baked into their DNA — from supply chains to hiring practices to community engagement.”

In her portfolio, 40% of current investments are women-led — a figure significantly above the industry average.

Rethinking Risk Through a Gender Lens

Heshmat also challenges traditional risk frameworks, which she argues are biased against women and underrepresented founders.

“The term ‘track record’ often disadvantages founders who’ve been shut out of elite institutions or legacy networks. But if you redefine risk to include resilience, lived experience, and stakeholder engagement — suddenly, women-led ventures emerge as extremely investable.”

She’s advocated for changes in due diligence processes, urging VCs and LPs to adopt gender-sensitive evaluation tools, especially when investing in emerging markets.

Mentorship and Ecosystem Building

Beyond capital deployment, Setareh is deeply involved in building a more inclusive investment ecosystem. She mentors women-led startups across ASEAN and is a founding advisor to a regional initiative called Women Impact Asia, which connects female investors, founders, and policymakers.

“Representation isn’t enough,” she says. “We need structural support — accelerators, co-investment networks, public-private partnerships that actively shift power dynamics.”

In 2024, she helped launch a microfund in collaboration with women-led NGOs in Indonesia and Vietnam, offering seed funding to early-stage ventures in climate resilience, ethical fashion, and digital literacy.

A Personal Perspective

For Heshmat, this mission is personal. “Early in my career, I was often the only woman in the room. I had to fight twice as hard to prove my competence — and still got passed over for deals I sourced.”

Rather than leave the system, she decided to change it from within. Now, as a decision-maker herself, she ensures that her investment committee applies a diversity and inclusion lens at every stage.

“I can’t fix all of finance,” she says with a smile. “But I can change how we do things — and inspire others to do the same.”

What’s Next: Building a New Archetype

Setareh believes the future of impact investing will be female-led — but not in the traditional mold.

“We’re not trying to replicate the old models with different faces. We’re building a new archetype of investor — one that balances logic and empathy, ambition and community, performance and purpose.”

She’s currently working on a book that weaves data, stories, and field experiences from across Southeast Asia, aiming to offer a practical guide for women entering the impact finance space.

Key Takeaways from Setareh Heshmat:

• Representation without redistribution is cosmetic. True change needs capital, control, and credit shifting toward women.

• Impact investing isn’t soft — it’s strategic. Women-led businesses are outperformers when given equitable support.

• Mentorship is infrastructure. Networks, role models, and visibility change outcomes as much as capital does.

Final Thought:
“We don’t just want a seat at the table,” Heshmat concludes. “We want to redesign the table — sustainably, equitably, and boldly.”