How to make the link between sustainability and business strategy – useful facts and figures for your next presentation to management

Galina Parmenter
4 days ago
4 min read

About the author

Galina Parmenter has 14+ years of experience working with companies, policymakers, and other stakeholders in multiple industries such as fashion, telecommunications and automotive. She was part of the Global Sustainability Team at C&A. Afterwards, she became an ESG Senior Advisor at Yettel.

As sustainability professionals, we are often tempted to frame sustainability as a moral imperative. But as we know, in reality, being ‘morally right’ is not an effective business argument.

Finance speaks in risk and return. Procurement speaks in margins and supply chain security. Marketing speaks in growth and positioning. If sustainability is not articulated in their terms, it is frequently treated as optional.

This disconnect helps explain why, despite growing awareness and ambition, progress on sustainability can stall.

The challenge is not a lack of intent, but a lack of translation.

Drawing on insights from academic literature and industry analysis, this article explores the financial and strategic implications of corporate inaction – highlighting how tangible risks are already appearing in operating margins, supply chains, legal exposure, and market competitiveness.

Future-Proofing Operating Margins

McKinsey has found that top-performing companies that integrate sustainability alongside growth and profitability into their core strategy outgrow their peers and exceed them in shareholder returns by around 7% on average over their four-year study.

At the same time, robust sustainability initiatives can actively contribute to improving companies’ operating margins. McKinsey outlines that corporate initiatives covering resource efficiency, through, for example, reducing energy use, water consumption, and waste generation, can directly lower operating costs. These types of initiatives can be implemented in the short-term and provide measurable benefits, whilst improving long-term resource use efficiency.

As resource scarcity intensifies for many key materials, efficiencies are becoming more of a financial necessity, with market volatility and pricing pressures increasingly impacting costs (Cambridge Institute for Sustainability Leadership).

Therefore, embedding sustainability into financial planning can help to improve cost control and spending forecasts. Companies that fail to act may face reduced margins whilst those who proactively integrate can unlock those long-term cost efficiencies and protect profitability.

Avoiding Legal Risks and Costs

In the near-future, companies with material climate risks are likely to face an increased risk of legal action being taken against them – as illustrated by the Grantham Institute’s annual report tracking climate litigation.

Not only do legal battles impact brand image, but climate-related litigation against major fossil fuel companies has often resulted in a significant drop in share values. This highlights that if a company materially contributes to climate change – they have litigation risks.

Some countries like the UK have begun issuing fines for breaches of climate change-related laws – with 33 companies fined £27 million for either under-reporting or failing to report emissions.

Market Share for More Sustainable Products

Changing to a more sustainable business model is highly likely to drive increased growth and demand for products.

Major research by NYU Stern, has shown that despite sustainable products accounting for 23.8% of the consumer packaged goods sector, they delivered an outsized 41% of the market growth – with market share increasing by 9.2 percentage points between 2013 and 2024.

Anecdotally, IKEA CEO Jesper Brodin said in 2024 that the company’s ‘sustainable living shop’ range is the company’s fastest growing. Contributing to the company’s 24.3% reduction in its climate footprint between 2016 and 2023, whilst simultaneously increasing revenue by 30.9% in the same period (IKEA).

Building Supply Chain Resilience

The Swiss Re Institute estimated a total of USD$318 billion in global economic losses from extreme weather events in 2024. This figure is set to jump over the coming years as extreme weather events are exacerbated by climate change.

As Bruegel outlines in a 2025 report:

Extreme flooding or droughts can disrupt production in manufacturing hotspots, such as Thailand and Taiwan.
Changing weather patterns severely impact agricultural yields, with tangible examples from recent price spikes for coffee, cocoa, and rice.
Shipping routes can be disrupted by changing water levels in waterways, as seen with traffic restrictions through the Panama Canal, back in 2023.

These examples highlight the need for companies to assess their supply chain resilience in the face of increased climate-related impacts, and work with their partners to adopt more sustainable practices.

Attracting Talent and Partnerships

For many professionals, sustainability is an important factor in deciding what career and company they wish to consider.

In an annual Deloitte survey of Millennials and Gen Z:

70% consider a company’s environmental credentials to be important when evaluating a potential employer.
Roughly 40% had either previously left companies or rejected opportunities due to a mismatch of personal ethics or environmental values.
15% had even changed jobs due to sustainability concerns.

Companies with strong sustainability commitments can gain leverage in the competition for talent by aligning with potential candidates’ values.

The Cost of Inaction

In the fashion industry, a 2026 report by Bloomberg highlights that climate inaction could reduce operating margins of companies by 3% and could lead to a 34% average drop in overall profits by the end of the decade. This is linked to higher carbon prices in emission trading schemes, increased raw material costs through supply chain disruptions, and a volatile fossil-dominant energy market.

Across all industries, inaction is set to cost over $500 billion annually in liabilities by 2030 – whereas, if companies invest in decarbonising their supply chains today, they could yield a three to six times ROI through loss aversion to future carbon prices (Boston Consulting Group).

In Summary

Telling others what they want to hear is a winning strategy. Whether reducing the cost of capital, promoting growth, or strengthening supply chains – sustainability is already shaping financial outcomes.

For leading companies, sustainability is no longer secondary – it is a material driver of performance and competitive advantage. In this context, sustainability becomes a language that stakeholders from all departments understand.

If you can make this connection effectively, you can secure buy-in, unlock investment, and deliver sustainable outcomes.