Corporate sustainability needs a broader narrative

For more than two decades, corporate sustainability has been anchored in a compelling promise: that companies could “do well by doing good”. The logic of “green growth” suggested that long-term investments in decarbonisation and clean technologies would address environmental challenges while unlocking new markets and efficiencies. Greater social responsibility, in turn, would align with evolving norms and supportive policy frameworks.

This narrative has been powerful, but it is now under strain.

The policy frameworks that have supported corporate sustainability for much of this period have changed markedly. The US has stepped back from the rules-based system, prioritising fossil fuel development over environmental stewardship. Wars in Ukraine and the Middle East have shifted political attention towards defence and security, often at the expense of longer-term priorities. As strategic rivalry between and social polarization within countries have replaced the rules-based system, the logic of global market integration that puts a premium on good environmental, social
and governance performance has been hollowed out.

In this more volatile setting, policy support for climate action and social inclusion has also weakened in Europe. Short-term responses to external shocks, including fossil fuel subsidies and diluted carbon pricing, have made it harder to sustain the link between sustainability and profitability. A recent study of 688 companies reflects this shift: only 17 per cent report that sustainability benefits outweigh costs. After all, the business case for sustainability is not as straightforward as often assumed.

Balancing short-term adaptation and long-term transformation

It is time to broaden the narrative on corporate sustainability – one that encompasses not only long-term transformation but also short-term adaptation. While the green growth narrative remains relevant over the long run, it does not, on its own, provide a sufficient rationale for immediate action. Too often, businesses default to short-term thinking, and without a clear business case, sustainability falls by the wayside.

In a volatile and uncertain environment, the short-term imperative of corporate sustainability does not hinge on win–win scenarios; it depends on resilience. Resilience better reflects current political and economic realities. It underscores firms’ capacity to withstand shocks, reduce dependencies, and operate under uncertainty. It also offers a clearer bridge between short-term decision-making and long-term strategic positioning.

Consider energy. The volatility of fossil fuel supplies and prices has shown that the transition away from fossil fuels is not simply a question of marginal cost. It is about reducing exposure to external shocks and geopolitical pressures. Investments in decarbonisation, electrification, smart grids and storage not only reduce emissions; they enhance energy security and strategic autonomy.

A similar logic applies to agriculture. Regenerative practices that reduce reliance on synthetic fertilisers improve soil health, product quality and biodiversity. At the same time, they lower exposure to supply disruptions, thereby strengthening resilience in food systems. 

Circular economy models offer further illustration. By reducing dependence on virgin raw materials and shortening supply chains, companies can mitigate risks linked to resource scarcity and geopolitical tensions. Already, more than 95 per cent of the raw materials used in electric vehicle batteries can be reused. What was once framed primarily as an environmental imperative is increasingly also a matter of strategic autonomy.

On the social side, there is also a case for reframing. In more polarised societies, corporate commitments to human rights, inclusion and non-discrimination do more than shape internal culture. They can support social cohesion and enable more constructive dialogue. In this sense, social responsibility contributes to the resilience of both firms and the societies in which they operate.

Business resilience and long-term value creation

A broader narrative for corporate sustainability captures both the imperative of short-term resilience and the pursuit of long-term regenerative growth. Corporate sustainability’s narrative must be expanded, not replaced, as structural forces continue to reinforce the long-term business case for sustainable practices.

The physical impacts of climate change, droughts, wildfires, flooding, sea level rise and
biodiversity loss, are already reshaping operating environments. For companies, sustainability is increasingly about managing risk, ensuring continuity and securing future growth.Markets are beginning to reflect these changes. Rising insurance costs and volatile agricultural commodity prices suggest that climate-related risks are being priced in. These developments point to a shifting balance between risk and opportunity.

Technological progress continues apace. Advances in green technologies, combined with the expanding use of artificial intelligence, are improving efficiency and accelerating adoption. Competitive dynamics are shifting accordingly. As The Economist has noted: “China is now making more money from exporting green technology than America makes from exporting fossil fuel.”

The weakening of policy frameworks therefore sits uneasily alongside a growing imperative to invest in resilience. Many companies, constrained by short-term performance pressures, struggle to reconcile these opposing dynamics, particularly when their sustainability narrative rests on the assumption of immediate “win-win” outcomes.

Updating the Narrative…

The story of corporate sustainability has always evolved alongside broader political, social and environmental trends. Today, those conditions have changed significantly. Updating the narrative is therefore not optional.

For European companies in particular, there is a strong case for positioning sustainability as a driver of resilience, underpinning strategic independence in energy, materials and promoting social stability. Such a reframing can help explain to investors why sustainability investments remain essential, even in the absence of consistent policy support. It may also encourage policymakers to move beyond short-term, populist measures towards frameworks that support a more stable, competitive and less vulnerable economy.

The original promise of “doing well by doing good” has not completely disappeared. But in a more fragmented and uncertain world, it needs to be complemented by the insight that sustainability enables companies to endure, adapt and ultimately prosper.