2025 will be a pivotal year for sustainability as the first Corporate Sustainability Reporting Directive (CSRD) reports get published, and more companies begin reporting on their ESG practices. The need for robust and accurate data collection will result in many organisations adopting sustainability-focused AI tools. However, the mounting regulatory pressure alone isn’t why a growing number of companies are committing to net-zero.
The rapid degradation of natural capital underscores the urgency of these commitments. Research also shows products with environmental, social, and governance (ESG) claims outperform their peers in market growth.
With benefits that extend from preserving natural resources to reducing non-compliance risks to increasing profits, organisations have all the reasons they need to start taking sustainability seriously.
Defining sustainability
Sustainability is a guiding principle that focuses on meeting present needs without compromising the ability of future generations to meet theirs. While the concept first gained global attention at the 1972 UN Conference on the Human Environment, the 1987 Brundtland Report, “Our Common Future,” popularised the modern definition of sustainability, highlighting decades of unchecked environmental degradation.
In the business context, sustainability goes beyond environmental protection. It is about creating long-term value by integrating environmental, social, and economic considerations into core strategies. Companies that adopt sustainable practices mitigate risks like climate change and resource scarcity, unlock new market opportunities, and strengthen brand reputation.
The three pillars of sustainability: People, Planet, and Profit
Credit: Plan A
At its core, sustainability in business is built around the triple bottom line framework, which balances People, Planet, and Profit. This holistic approach ensures businesses drive positive social, environmental, and economic outcomes.
- People (social responsibility): This area focuses on promoting equity, social justice, and fair labour practices while supporting community well-being and access to essential resources.
- Planet (environmental responsibility): This approach emphasises reducing carbon footprints, conserving natural resources, protecting ecosystems, and adopting cleaner production methods to minimise environmental impact.
- Profit (economic viability): Encourages businesses to achieve financial success while maintaining ethical practices and long-term value creation rather than focusing solely on short-term gains.
This triple focus allows companies to thrive while contributing positively to society and the environment.
Evolving sustainability frameworks
As sustainability becomes a business imperative, many sustainability frameworks have emerged to guide organisations in implementing responsible practices.
One such model is the 6 Rs of Sustainability, which expands on the traditional “reduce, reuse, recycle” concept by adding:
- Rethink – Evaluate consumption habits and business processes.
- Refuse – Avoid products and practices that harm the environment
- Reduce – Minimise resource usage and waste.
- Reuse – Extend product lifecycles through reuse.
- Repair – Fix products instead of discarding them.
- Recycle – Properly process materials for reuse.
This comprehensive approach encourages businesses and consumers to make more sustainable choices at every stage of a product’s lifecycle, significantly reducing environmental impact.
Benefits of embedding sustainability in corporate strategy
Business leaders have realised that sustainability improves environmental and societal impact and makes good business sense. Here’s why:
Improving profitability
Businesses that perform well in environmental, social, and governance factors consistently outperform the market. While initiatives such as improving digital adoption or switching to cleaner energy may require significant investments in the short term, in the long run, these energy-efficient practices reduce production and overhead costs, thereby increasing profitability.
Building a strong brand image
Consumers want to buy from brands that echo their values, and some are willing to pay nearly a 10% premium for sustainably produced goods. Businesses that position themselves as future-friendly and environmentally responsible can grow a loyal customer base while avoiding public relations disasters that hurt brand reputation.
Navigating regulatory changes
Although regulatory focus and approach vary significantly from country to country, many governments have stepped up their sustainability ambitions since the Paris Climate Agreement. While Sweden and Germany have set strict net-zero targets for 2045, Japan, Canada, and the UK have committed to a 2050 timeline. With a proactive sustainability strategy, organisations can go beyond merely avoiding penalties to leveraging subsidies and tax breaks to create value.
Attracting talent
For Gen Z and millennials, sustainability is front-of-mind when making purchase decisions and career choices. A 2022 survey found that 51% of business students in the US are willing to accept lower pay to work for an environmentally responsible organisation, and research by Deloitte reveals that 69% of employees want their organisations to invest in sustainable initiatives. Sustainability gives employees a sense of purpose and motivation, leading to higher engagement, innovation, and productivity.
Main roadblocks to accelerating sustainability Accenture’s recent “Destination Net Zero” survey found that only 16% of the world’s 2000 largest companies are on track to reach net zero emissions in their operations by 2050. There are several reasons why some companies struggle to convert their sustainability pledges into results.
Lack of commitment from leadership
The current geopolitical developments may downplay sustainability questions, causing CFOs to be more sensitive to the upfront financial implications of ESG efforts. However, with global clean technology investments expected to touch $2 trillion in 2024 (International Energy Agency’s 2024 World Energy Investment report), businesses appear to be still committed to the cause. Organisations whose leaders consider ESG initiatives a short-term cost centre instead of a source of value are less likely to achieve their sustainability goals.
Goals without tools or accountability
Well-defined sustainability goals aren’t enough. These must also be accompanied by ESG-linked compensation incentives, transparent communication, and upskilling opportunities to generate the momentum necessary to deliver on the sustainability agenda. Without ESG metrics built into incentive plans, companies will find it challenging to get their employees to prioritise sustainability goals over short-term financial performance. The use of artificial intelligence might (in theory) accelerate decarbonisation remarkably through real-time energy management and operational efficiency. However, only 20% of European companies use it to reduce carbon emissions.
Appointing sustainability managers without a plan
A Chief Sustainability Officer (CSO) can act as a catalyst for an organisation’s sustainability agenda. However, their role, responsibilities, and place in the organisational structure are often left vague. These must be clearly defined and established before the appointment.
The role of corporate sustainability reporting frameworks
Every business has the power to make a meaningful impact in the fight against climate change, plastic pollution, human rights violations, racial injustice, and gender inequalities. However, many organisations do not know how or where to begin. Corporate sustainability reporting frameworks provide a structured way to tackle environmental, social, and economic challenges and disclose performance in a transparent, verifiable, and comparable manner.
From Science Based Target Initiatives (STBi) to the Global Reporting Initiative (GRI), each reporting framework has a unique focus and benefits. Each one forces you to confront the issues that impact your operations and take action, such as identifying materialities affecting the business or implementing a solid data layer to improve the company itself rather than reporting just for the sake of it.
Best practices and strategies for improved sustainability
Companies should aim for a comprehensive transformation to make a meaningful societal impact and drive business value. Value chain collaborations and the adoption of emerging technologies can embed sustainability into the core of the business.
Reimagining the supply chain
The supply chain often accounts for more than 90% of a company’s emissions, making it a key focus area for reduction initiatives. Studies show that better raw material procurement practices can reduce supply chain emissions by 10% or more. A supply chain audit can help companies locate gaps and opportunities to reduce their natural resource consumption, rethink packaging to reduce waste and drive resource efficiency.
However, today’s supply chains are highly complex and international. The emissions within them are the hardest to measure, creating uncertainty about the risk companies bear due to their suppliers’ ESG performance. A carbon management platform like Plan A can help companies gather data across their supply chains, accurately measure emissions, and plan targeted reduction actions.
Reducing emissions
A company’s carbon footprint can be calculated by considering emissions across three scopes. Scope 1 represents direct emissions from company-owned or controlled sources, while Scope 2 encompasses indirect emissions related to electricity, heating, steam, and cooling. Scope 3, often the largest of all, relates to all other indirect emissions across a company’s value chain.
Accurate carbon emissions data and frequent measurement are crucial for setting reduction targets, identifying improvement areas, and assessing progress. Despite this, many companies rely on spreadsheets to record and report emissions data manually. Sustainability software like Plan A can significantly help streamline carbon accounting and reporting, set science-based targets, and develop strategies to achieve net zero goals.
Adopting a data-driven approach
Data is at the heart of an organisation's (sustainability) strategy, whether setting clear goals, taking strategic decisions, or measuring and disclosing performance. Sustainability software is critical in automating ESG data collection and quality, making it more accessible across the organisation. This enables businesses to focus on critical practices like sustainable procurement, accurately and frequently measuring emissions, reducing emissions, and addressing non-carbon-related impacts.
Future trends in sustainability
Organisations increasingly recognise that achieving climate goals depends as much on their supply chain partners as on their operations. A strong ESG strategy can falter if suppliers fail to align with decarbonisation plans or engage in unethical labour practices, risking your brand reputation. More companies are adopting sustainability management platforms to efficiently monitor, manage, and report supply chain performance to mitigate these risks. AI-powered tools are transforming the space by streamlining data collection and analysis, enabling companies to optimise processes, refine consumption patterns, and efficiently assess climate-related risks.
Consistent, reliable climate data is the foundation of any successful sustainability endeavour. Plan A’s all-in-one sustainability management platform can help your business measure emissions, plan reduction initiatives across all scopes, and achieve climate goals. Schedule a call with our climate expert today to learn more.
Plan A’s carbon management platform takes this one step further by prioritising decarbonisation-first. It equips companies with automated carbon accounting, CSRD-aligned reporting, and personalised expert support, ensuring they move beyond compliance towards meaningful emissions reduction. By integrating real-time insights, target setting, and actionable decarbonisation plans, businesses can proactively cut emissions, optimise resource use, and future-proof their operations.
With investors, customers, and regulators demanding greater transparency, businesses that embrace science-backed, automation-driven sustainability software gain a competitive edge. The shift from reporting to actionable decarbonisation not only strengthens compliance but also enhances operational efficiency, brand reputation, and long-term resilience in the net-zero economy.
Each of these topics offers important insights and strategies for organisations aiming to embed sustainability into their core operations. By leveraging these practices and tools, businesses can play a pivotal role in fostering a sustainable future for all.
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