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Over the past couple of years, the concept of deriving business value from sustainability has entered a new phase. Economic uncertainty, geopolitical instability, regulatory recalibration, and a vocal ESG backlash have led to stalled momentum. Questions that many sustainable business leaders believed were settled have resurfaced with renewed intensity: Does sustainability still make business sense? Is the business case holding up under pressure? Has the business case changed?
Across boardrooms and executive teams, sustainable business leaders are increasingly being asked to justify their work in narrow, short-term, and financial terms to prove the so-called “business case.” In some cases, sustainability commitments are being softened, reframed, or quietly deprioritized. In others, leaders find themselves on the defensive, responding to skepticism which may be shaped by politics and ideology as much as by genuine business concerns. Indeed, at last month’s World Economic Forum in Davos, the most common challenge for sustainable business leaders was, “how does this deliver business value?”
Against this backdrop, our organizations worked with over a dozen leading companies from different sectors and geographies to understand whether and how the business value of sustainability has changed. Our report, Business Value of Sustainability: Trajectory and Strategies, re-examines how sustainability creates value in today’s context, as companies face an operating environment that has changed in profound ways since the dawn of the 2020s, when a flurry of grand statements and ambitious commitments were coming fast and furious.
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Authors
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President and CEO, BSR
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Chris Coulter
CEO, GlobeScan
Topics
The Business Case Remains Strong—The Challenge is to Unlock Business Value for a World Transformed
One of the central insights of the report is that the core principles underpinning the business value of sustainability remain powerful. Decades of research and practice continue to show that sustainability contributes to operational efficiency; supply chain resiliency and risk mitigation; access to financial capital; talent attraction; and alignment with customer, consumer, and other stakeholder demands. Our research shows how foundational these drivers have been and continue to be.
Even as these core tenets remain in place, they need to be understood and applied to meet the needs of a radically changed context. Regulatory landscapes are shifting unevenly across regions. Relying solely on regulatory drivers is less important than it was two years ago. Economic volatility has intensified short-term pressures. Political risk for companies talking about their sustainability strategies has increased, affecting investor and customer engagement. Sustainability has become increasingly entangled in cultural and political debates, particularly in North America and Europe. Civil society’s influence on business has waned, creating an air of uncertainty around reputational risk for companies reducing their sustainable business ambitions.
When companies rethink their strategies to address these complex global dynamics and their accompanying challenges head on, sustainable business delivers significant value. Sustainability teams therefore need to rise to the challenge and prove themselves able to speak the language of finance, growth, and strategy. As Peter Drucker wrote, “Every single social and global issue of our day is a business opportunity in disguise.”
The challenge, then, is not whether sustainability creates value—it is how it creates value. Our research shows that value is created via integration, and this is an underappreciated variable. Companies that have integrated sustainability into core business decisions and functions, identified the tangible and intangible benefits, and defined these as short- and long-term outcomes and the often-overlooked costs of inaction realize the value of sustainability. Communications are key too: to create value from sustainability, companies need to be able to confidently communicate a value proposition to key internal and external stakeholders.
Based on our dialogue with the companies with which we partnered, as well as our joint experience working with hundreds of companies, we found that five core elements are central to maximizing and communicating the business value of sustainability.
1. The fundamentals of sustainability’s business value remain strong.
The benefits that sustainability has delivered for decades—efficiency gains, risk reduction, resilience, innovation, and talent advantages—are as relevant as ever. The question is no longer where value comes from, but how companies unlock it through integration, innovation, and commercialization.
2. The context has changed, and so must the way value is demonstrated.
Rapid shifts in regulatory, geopolitical, and market conditions have created new scrutiny and, in some cases, challenges to sustainability that are more about ideology than facts. Leaders must address this head-on, adapting their narratives, challenging inaccurate assumptions, and engaging skeptics with clarity and conviction rather than defensiveness.
3. Integration and relationships are crucial enablers.
Sustainability creates business value when embedded across core business functions, which is accomplished through strong relationships; aligning sustainability with existing business priorities, metrics, and decision frameworks; and building a collective sense of ownership internally.
4. Value takes many forms—and not all of them can be reduced to traditional models of ROI.
Some sustainability benefits are quantifiable and immediate; many are not. Trust, reputation, employee engagement, strategic flexibility, resilience, avoided costs, and preparedness for future disruption are real sources of value that accrue over time and do not show up neatly in quarterly financials.
5. This is a moment for confidence, not retreat.
Despite backlash and pressure, the evidence for sustainability’s role in long-term business success remains clear. Many of today’s challenges are driven less by business fundamentals than by political and ideological dynamics. Sustainable business leaders are called to lead with conviction—asserting value clearly, creatively, and credibly, even when the environment is noisy.
Moving Forward with Conviction
Sustainability is central to business success, not a discretionary add-on suitable only for stable times. Navigating volatile and changing energy markets; addressing a rapidly diversifying customer base and workforce; creating resilient supply chains; and sustaining a license to operate all deliver business value by navigating uncertainty, managing risk, fostering innovation, and importantly, building enduring value.
As companies continue to navigate volatility and scrutiny, the challenge is not whether sustainability belongs at the core of business strategy, but whether organizations are prepared to fully realize the value it offers. Those that do will realize competitive edge. Those that don’t will miss a golden opportunity.
Our Experts
Our team consists of global experts across multiple focus areas and industries, bringing a depth of experience in developing sustainable business strategies and solutions.
Chris Coulter
CEO, GlobeScan
