Sustainability vs. business growth: dispelling the myth of trade-offs

The corporate world often views sustainability and business growth as opposing forces, where one must be sacrificed for the other. However, this perspective is increasingly outdated. For example, Unilever has recorded 69% faster growth in its sustainable brands. Real-world examples like this, and research, demonstrate that sustainability and growth can, and should, go hand-in-hand.  Here is why and how.

Breaking the traditional paradigm

The concept of green growth challenges the assumption that economic progress will inevitably come at an environmental cost. At a country level, the United Nations Environment Programme (UNEP) shows how nations can expand their economies while reducing resource consumption and pollution through what’s generally referred to as decoupling: doing more with less. By adopting decoupling strategies, companies can unlock new markets, improve efficiency, and drive product innovation, turning sustainability into a growth engine.

Prominent examples of what this can look like in practice come from the Alliance of CEO Climate Leaders — a CEO-led community committed to net-zero emissions, representing a combined USD 4 trillion in revenue. Its members reported a collective reduction in emissions of about 10% from 2019 to 2022 while growing their revenues by 18%.

Sustainability as an investment with positive return

The conventional view on sustainability as a cost center actually negatively impacts an organization’s bottom line. It leads to underinvestments in one of the biggest value-generating opportunities for their business. Leading firms, as highlighted by Deloitte, are recognizing the benefits of fully embedding sustainability into their business strategy, such as risk mitigation, product innovation, enhanced brand loyalty, and resilience in volatile markets. Deloitte’s study shows that sustainable brands drive growth, as shown by the fact that buyers are 2.3 times more likely to prioritize suppliers seen as socially responsible. In addition, companies with clear, credible transition plans gain stakeholder trust, reducing risks of greenwashing accusations and regulatory penalties, as outlined in a recent EY report. This strengthens their financial position and competitiveness in markets with growing regulatory demands. Thus, while it is true that investments are required to adopt a sustainable business model, these will show positive returns and unlock long-term business growth.

Sustainability fatigue – the context for businesses

While the above should spur real excitement for the opportunities that the transition to a net-zero economy holds, we clearly see severe pushback against sustainable businesses in these early weeks of 2025. The geopolitical environment is increasingly shifting out of global collaboration on the most pressing issues of our times and towards the emphasis of national interests. This trend has led to setbacks in corporate climate commitments and delays to renewed national climate targets.

In addition, sustainability fatigue also arises amidst the perception of increasing reporting burdens from regulations like the EU’s Corporate Sustainability Reporting Directive (CSRD). This directive imposes a rigorous framework on companies, significantly elevating their reporting burdens and costs associated with gathering and presenting compliant data. Often, businesses are left scrambling to report using incomplete or imperfect data, further complicating their sustainability narratives. Coupled with greenhushing—where companies underreport their sustainability efforts due to fear of scrutiny—this can stifle transparent communication of their achievements.

How net-zero policy can help businesses

Despite the pushback observed against sustainability and related regulation, as evident by the several calls for less ambitious disclosure requirements in the EU Omnibus package, the adequate response to sustainability fatigue is not less policy, but better. We need consistent, equitable net-zero policies that establish clear guidelines and targets for emissions reductions, creating an environment where businesses can strategize their transition to sustainable practices with less uncertainty. The market incentives need to shift in a fundamental way, where governments offer incentives for companies that adopt net-zero initiatives, such as tax breaks, grants, or subsidies for renewable energy projects, enabling businesses to lower their operational costs while contributing to climate action.

In the meantime, rather than viewing current disclosure requirements as mere burdens, businesses themselves should embrace them as significant opportunities. The rigorous reporting process encourages a thorough examination of operations, allowing businesses to identify climate-related risks and develop comprehensive strategies. By reframing these reporting demands as a chance for genuine introspection and improvement, firms can not only enhance their sustainability narratives but also revive stakeholder interest through authentic commitments and measurable progress. With this, sustainability can become a key differentiator for a company.

Changing the narrative of sustainability and business growth

The traditional view of sustainability and business growth as opposing forces is no longer valid. Companies should embrace sustainability as a core element of their growth strategy. While there is an urgent need for much clearer and aligned net-zero policies and a profound shift in market incentives, by integrating sustainability into their operations, businesses can already drive crucial innovation, build resilience, and lead in a world that increasingly values sustainable practices.

Sustainability doesn’t merely coexist with growth; it enhances it. It’s time for businesses to recognize and leverage the synergy between these two objectives. The future of commerce isn’t just about being sustainable; it’s about thriving sustainably. Sustainability will literally be the ability of a company to sustain itself in the future.