Author Andrew Winston, shares his opinion in an article for Fortune, where he delves into the current slowdown in corporate sustainability and why this trend is unlikely to last. Despite what some may believe, the drive towards sustainability in business is not primarily motivated by politics or activism. It is driven by the undeniable realities of climate change—a pressing and expensive existential threat that companies must address.
Corporations are not investing in renewable energy just to improve their image; the cost of these technologies has dramatically decreased. Nor are they embracing diversity merely for appearances; their workforces and customer bases are becoming more diverse. Sustainability, therefore, is poised to make a powerful comeback. The stakes are too high for businesses to ignore, and those that want to thrive will need to contribute to a sustainable future.
In this insightful article, he explores the so-called “sustainability recession” affecting both the U.S. and parts of Europe. One factor he highlights is the impact of regulations such as the Corporate Sustainability Reporting Directive (CSRD). While these regulations have heightened awareness and prompted some companies to start measuring and reporting their sustainability efforts, they have also inadvertently slowed down actual progress. Many firms are now scrambling to meet basic compliance, which sometimes means focusing on paperwork rather than substantive action.
Winston notes a tendency for companies that had previously been proactive to now use compliance as an excuse to shift their focus away from meaningful sustainability efforts. The result is a “rush to the middle,” where firms that had done little before are now making minimal efforts to catch up, while those that were already advanced might only do the bare minimum to satisfy reporting requirements.
Winston states, from my perspective, this ongoing struggle reflects a broader issue: the challenge of securing strong leadership support for ESG initiatives. There is often a lack of internal prioritization and a hesitance to pursue ambitious goals. With the advent of regulations like the CSRD, the role of sustainability managers has increasingly become one of compliance rather than driving real change.
Ultimately, the current “sustainability recession” is a temporary phase. The underlying drivers—economic realities and the urgent need to address climate change—will ensure that sustainability remains a critical focus for businesses. As companies navigate this challenging landscape, those that truly commit to sustainability will be better positioned for long-term success.
(Thanks to John Elkington for coining “sustainability recession” and to Ramez Naam for his smart take on clean energy.)
Read the Forbes article by Andrew Winston
