Sustainability in 2026: From promises to proof

Sustainability has shifted from a CSR concern to a central pillar of corporate strategy. Once treated primarily as a reputational issue, it now shapes how companies compete and create long-term value. Emma Felipe, Senior Associate Professor in the Departments of General Management & Strategy and Society, Politics, & Sustainability at Esade, recently hosted a webinar explaining why sustainability is no longer a “nice to have,” but a strategic imperative. 

“Sustainability is no longer optional. It is a strategic driver for surviving, for being able to compete and to lead in the market,” says Felipe. Companies must now stop questioning whether sustainability matters and instead work quickly to integrate it into their decision-making. 

Intensifying climate risks, together with expanding regulatory expectations, are changing the narrative, as are climate-aware investors and green-minded consumers. These combined forces are moving sustainability from a peripheral initiative to the center of corporate strategy. 

For Felipe, 2026 is a critical turning point. After years of ambitious pledges and high-level commitments, companies are entering what she calls an “era of authenticity.” Execution, not ambition, will define leadership. 

Climate risk meets economic reality 

Felipe presented the data. Recent years have seen record temperatures on land and in the oceans. According to the Copernicus Climate Change Service, 2024 was the hottest year on record globally. Atmospheric CO₂ concentrations have now surpassed 420 parts per million, with the largest one-year increase recorded in 2024, as reported by the National Oceanic and Atmospheric Administration (NOAA). 

Climate change is not just environmental; it has economic impacts on growth, productivity, and well-being

Seven of the nine planetary boundaries have now been crossed, including ocean acidification. Environmental problems are now affecting water systems and biodiversity. Chemical pollution also adds to the strain. 

“Climate change is not only an environmental issue, but it also carries macroeconomic consequences that shape growth, productivity, long-term development, and well-being,” she says. In other words, climate risk is financial risk. 

Economic analysis concurs. A report from insurer Swiss Re suggests that higher warming scenarios could reduce global GDP by 18 per cent by 2050. As temperatures rise, losses accelerate. Businesses would likely face disrupted supply chains, higher insurance costs, volatile commodity prices, heat-related productivity losses, and capital expenditure to protect assets. 

In Southern Europe, for example, hotter-than-average weather has already reduced labor productivity in the construction and agriculture sectors. In tourism, higher temperatures and water scarcity alter seasonal demand. These impacts are already being felt, and businesses must adapt. 

Uneven politics, unstoppable pressure 

Despite clear evidence that a warming climate is already having serious effects, political response has been fragmented across countries. The EU, Japan and India are among those tightening disclosure requirements and carbon pricing mechanisms. Yet countries such as the US, UK and New Zealand have, at times, delayed or softened aspects of their commitments, and the EU has also eased some emissions targets to win over skeptical member states. 

This patchwork of regulation is hard to navigate for global companies. The European Union continues to advance due diligence and product transparency rules, including the Corporate Sustainability Due Diligence Directive and digital product passports. Meanwhile, other jurisdictions aren’t moving at the same pace. 

Felipe urges business leaders not to stall. “Regulatory divergence is now a design constraint. Treat it as an operations and data challenge, not just a legal one,” she says. It’s a complex challenge for companies, but they must endeavor to create systems that comply across multiple regulatory environments and that can align data, reporting standards, and supply chain transparency.  

Despite political fluctuations, the onus is on companies to demonstrate sustainable actions. The good news is that according to the OECD, 91 per cent of companies representing the majority of global market capitalization now report on sustainability, and around 70 per cent have board-level oversight.  

More and more, both investors and customers expect evidence, not promises. The UN Development Programme (UNDP) survey showed that 80 per cent of people globally want stronger climate action. Felipe also cited a survey showing that 69 per cent of people say climate change is impacting big life decisions, and 44 per cent of consumers say that they're willing to pay more for products aligned with environmental protection and sustainability. 

“Climate change is a consumer value,” she says.  

Fortunately, although politics slows momentum in some regions, overall, businesses are striving for greater accountability. 

From net-zero talk to science-based proof 

How can businesses move from commitment to credibility? Net-zero announcements have indeed multiplied, but it takes more than ambition to achieve sustainability goals. 

We shift from net-zero promises to showing clear, validated pathways backed by science

The growth of the Science-Based Targets initiative shows the transition in action. Nearly 11,000 companies have committed to science-based targets, representing roughly 41 per cent of global market capitalization. These targets require externally validated, time-bound pathways aligned with climate science. 

“We move from ‘we aim to be net zero’ to ‘here is our validated pathway’,” explains Felipe. Now, investors don’t rely only on backward-looking ESG scores; they are placing more emphasis on forward-looking transition plans, capital allocation strategies, and measurable milestones. 

Capital markets are already rewarding companies that are advancing on sustainability. The focus is narrowing toward transition-ready companies that demonstrate operational progress. 

Parallel to this, green skills continue to be in demand. The LinkedIn Global Green Skills Report shows that demand for green skills is growing faster than supply in many economies. Companies that invest in workforce capabilities—climate strategy, circular design, sustainable finance—gain a competitive advantage not only in compliance, but in innovation.  

Supply chains, technology and the era of authenticity 

Felipe believes that companies can no longer get away with merely reporting sustainability performance, and they must now prove it across products and supply chains. In the EU, for example, rules on due diligence and deforestation-free supply chains are designed to require companies to identify, prevent, and mitigate environmental and human rights risks. The introduction of digital product passports will further increase transparency. 

Data is central to strategy. As businesses are more closely scrutinized, they must track, measure, and report more. Here, technology, advanced data systems, and AI analytics help manage the burden. 

Sustainability is no longer seen primarily as a cost; it’s now more commonly considered a pathway to profitability. A Morgan Stanley study shows that 88 per cent of companies view sustainability as a driver of long-term value creation. Firms that are geared up for a sustainable transition frequently demonstrate stronger resilience to energy price volatility, regulatory shifts, and physical climate shocks. 

This indicates a new phase. “We are moving past the hype and entering the era of authenticity,” says Felipe. Previously, the rhetoric was always enthusiastic, with expectations and big promises, but now the focus is on execution.  

A strategic opportunity 

Boardroom discussions can now either respond to sustainability requirements as mere compliance under their CSR policy, or they can redesign their business model around resilience, efficiency, and innovation. 

Inaction will be costly. Extreme weather events are increasing, scrutiny from authorities is growing, and capital is flowing towards businesses with actionable transition strategies. Society, too, expects sustainability to be at the core of business. Competitiveness is more frequently defined by sustainability. In an era of authenticity, credibility is currency.