The past 12 months have seen an unprecedented number of policies and regulations related to sustainability – from the SEC’s landmark climate risk reporting rule to California’s SB-261 and SB-253, to the EU’s ESRS and CSRD.
But this ambitious agenda has been impeded, as legal challenges have tangled up regulatory proposals in the courts. The result is a stalemate of epic proportions, as corporations hit the pause button on their climate-related reporting and sustainability increasingly becomes perceived as a burdensome compliance exercise.
Sustainability has been moved out of the strategy function and relegated to the lawyers and accountants of compliance. This is not only a new resourcing challenge but a big problem for our overall business landscape, as companies focus more on the “what” of reporting instead of the “why” of innovation. The act of disclosing has become more important than the content of the disclosures themselves.
We need to stop thinking about sustainability as an expense for companies and start focusing on its role in innovation and revenue generation.
Sustainability, at its core, is all about innovation – helping companies achieve competitive advantages, capitalizing on macroeconomic trends and ensuring long-term viability through market disruptions both in terms of cost savings AND revenue growth.
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