Companies’ chief executives’ interest in sustainability is sharply declining, as CEOs increasingly shift their attention towards AI, growth, inflation, and geopolitical uncertainty, according to the latest research from Bain & Company.
The consultancy firm has estimated that a 2-degree Celsius temperature rise could cut $6 trillion from the S&P 500 value, alongside severe environmental and social impacts. Yet, many companies are falling behind on their sustainability commitments. Of those disclosing progress, 30% are lagging on Scope 1 and 2 emissions reduction goals, and nearly half are behind on Scope 3.
“The transition to a sustainable world is following a familiar cycle,” said Jean-Charles van den Branden, Bain’s global Sustainability practice leader.“What began a few years ago as boundless excitement has given way to pragmatic realism.”
A 2-degree Celsius temperature rise could cut $6 trillion from the S&P 500 value.
While chief executives move away from prioritising sustainability, a survey of nearly 19,000 consumers across 10 countries shows that 61% are more concerned about climate change than two years ago, often due to personal experiences with extreme weather. Consumers in Brazil, Indonesia and Italy expressed the highest concerns- 90%, 90% and 84%, respectively- for their environmental footprints.
“As extreme weather events become more frequent and disruptive, consumers are no longer passive observers—they’re feeling the impact firsthand and are demanding that businesses step up,” said Akram Alami, Middle East Head of Utilities, Aviation, and Sustainability & Responsibility practices at Bain & Company Middle East.
“Companies that fail to integrate sustainability into their strategies risk not only their reputations but also their competitive edge in an increasingly eco-conscious marketplace.”
Moreover, Bain’s survey of 500 B2B buyers and sellers shows that sustainability is among the top three purchasing criteria, with 36% willing to leave suppliers that fail to meet sustainability expectations. Nearly 50% of corporate buyers are willing to pay a sustainability premium of 5% or more today, expecting this willingness to increase in the future, the poll found.
Nonetheless, suppliers are not taking advantage of these demands. While 85% of suppliers say they embed some degree of sustainability in their products and services, only 27% consider themselves very knowledgeable about their customers’ sustainability needs.
Instead, companies can integrate AI and new technologies to make their products more sustainable. Eric Guraieb Partner and member of the Energy & Natural Resources and Sustainability practices at Bain & Company in the Middle East, said, “By embedding sustainability from the outset, businesses can take the lead in shaping a greener, tech-driven future.”