Sustainability is a highly polarizing topic, with passionate supporters and strong detractors. Despite its recent surge in attention, there are emerging cracks in the sustainability narrative.
Bain & Co. recently reported a notable decline in corporate attention and investment in sustainability initiatives, signaling a shift in priorities. A growing number of publications and reports reflect a negative bias toward sustainability, which, despite being a buzzword in recent years, has developed an unfavorable reputation.
Unlike AI, which is often associated with innovation, growth and future potential, sustainability tends to be linked with compliance, regulations and constraints—concepts that many leaders perceive as limiting. This perception contributes to the polarization around sustainability, as it is frequently misunderstood, labeled negatively and associated with burdensome requirements. These narratives, combined with internal organizational challenges, have resulted in sustainability gaining a negative image in some circles. Understanding the reasons behind this shift is crucial to addressing the underlying issues.
One of the primary reasons is the misconception that sustainability is expensive and detrimental to profits. Many organizations view sustainability initiatives as an added cost, rather than recognizing the long-term benefits and cost savings they can bring. Most companies do not conduct a deep analysis of the return on sustainability investments (RoSI).
For example, investing in energy-efficient equipment or renewable energy sources may require an initial outlay, but it can lead to significant reductions in energy costs over time. Similarly, implementing sustainable supply chain practices can reduce waste and improve efficiency, leading to cost savings and improved profitability.
Another reason is a lack of understanding about what sustainability entails. Some organizations may view sustainability as simply environmental protection that is mandated by regulators. Or, they might see it as simply recycling or reducing waste, rather than recognizing its broader implications for business operations. Sustainability encompasses not only environmental considerations but also social and governance factors, such as ethical sourcing, diversity and inclusion, data privacy rights and transparency and accountability. This lack of understanding can lead to skepticism and resistance to implementing sustainable practices, as organizations may not see the value in investing time and resources in something they don't fully comprehend.
Short-term thinking is another significant barrier to sustainability. Many organizations prioritize short-term gains over long-term sustainability, neglecting the potential risks and consequences of unsustainable practices. For example, companies continue to choose cheaper, non-sustainable materials to increase profits in the short-term while other sustainable options are available in the market. They lack the curiosity or will to procure other solutions or simply think that sustainability is just a short-term hype.
Competing priorities can also hinder sustainability efforts. Organizations may have competing priorities, such as productivity and efficiency, which seem to conflict with sustainability goals. For example, a company may prioritize increasing production levels over reducing waste because of the short-term absorption effect. They neglect to make a proper financial analysis, including the cost of managing and disposing of industrial waste or the incremental profit when addressing customers who value green as higher-price premium.
Greenwashing concerns are another reason sustainability gets a bad rap. Some companies exaggerate their sustainability efforts or make false claims about their environmental or social impact. This can lead to cynicism and mistrust among employees, customers, and stakeholders, making it harder for organizations to implement genuine sustainability initiatives. For example, a company may claim to be using sustainable materials using their own understanding of what sustainable means, when, in reality, they are not. This can damage the company's reputation and make it harder to implement sustainable practices in the future.
Resistance to change is another significant barrier to sustainability. Implementing sustainability initiatives may require significant changes to operations and organizational designs, which can be met with resistance from employees and leadership. Some of them view sustainability as a fad which will go away soon. For example, introducing new sustainable and social practices may require changes to employee behavior or processes, which can be difficult to implement and may face resistance from those who prefer the status quo. Resistance is difficult to break when there is not a high sense of urgency to change.
Lack of leadership buy-in is also a significant obstacle to sustainability. Without support and commitment from top leadership, sustainability initiatives may struggle to gain traction and be seen as a low priority. Leaders must set the tone for sustainability efforts and provide resources and support to ensure their success. For example, a CEO who prioritizes embedded sustainability can inspire and motivate employees to embrace sustainable practices and make them a core part of the organization's culture. Other CEOs might consider sustainability as a must-do and a cost of doing business.
Finally, difficulty in measuring impact can make it challenging for organizations to demonstrate the value of sustainability initiatives. It can be hard to quantify the impact of sustainability efforts, making it difficult to demonstrate their value to the organization or to customers. For example, measuring the impact of employee engagement initiatives or supply-chain sustainability efforts can be complex and require significant resources. However, by using tools and frameworks such as the Sustainable Development Goals (SDGs) and the Global Reporting Initiative (GRI), organizations can better measure and report on their sustainability impact.
Compared to AI and other fancy tech trends, sustainability often gets a bad rap inside organizations. The gap between intention and action is a clear demonstration that we have a long way to go. My experience in collaborating with industrial firms is that sustainability teams are under pressure to meet deadlines while being ill-equipped and under-funded.
The reasons listed in this short essay lead to firms missing a huge market opportunity. Future generation of consumers will force a change. How they consume and spend their discretionary budget will create change through the industrial value chain. Recognizing these challenges and addressing them head-on, organizations can overcome the barriers to sustainability and reap the many benefits it has to offer. By prioritizing sustainability, organizations can improve their reputation, reduce costs, increase efficiency, and contribute to a more sustainable future for all.
