• Sustainability slips: CEOs are prioritizing AI and inflation over sustainability, risking long-term financial and environmental damage.
• Consumer pressure rises: 61% of consumers are more concerned about climate change due to personal experiences with extreme weather.
• B2B buyers demand action: 36% of B2B buyers are prepared to leave suppliers that fail to meet sustainability expectations.

CEOs’ Priorities Shift Away From Sustainability

New research from Bain & Company reveals a sharp decline in CEOs’ focus on sustainability as artificial intelligence, inflation, and geopolitical uncertainties rise to the top of their agendas. Bain warns this shift could have significant financial consequences, estimating that a 2-degree Celsius increase in global temperatures could slash $6 trillion from the S&P 500’s value.

Jean-Charles van den Branden, Bain’s global Sustainability practice leader, remarked, “What began as boundless excitement has turned into pragmatic realism. Companies are rethinking what is achievable. But slowing progress would be a mistake. Our research shows many sustainable technologies will reach their tipping point sooner than expected.“

Consumers Are Demanding Action

In Bain’s survey of nearly 19,000 consumers across 10 countries, 61% reported increased concerns about climate change, often due to personal experiences with extreme weather. Countries like Brazil, Indonesia, and Italy showed the highest levels of concern.

Notably, 76% of consumers globally believe living sustainably is crucial because their actions have an impact. Consumers are increasingly factoring sustainability into their shopping decisions, with 35% influenced by media coverage and 28% by brand campaigns. Bain’s research suggests companies should focus on targeted customer engagement and prioritize eco-friendly packaging to stay competitive.

Sustainability Remains a Top Priority for B2B Buyers

For B2B buyers, sustainability is now a critical factor in purchasing decisions. Bain’s survey of 500 B2B buyers found 36% are willing to leave suppliers that don’t meet their sustainability standards. Nearly half of these buyers are also prepared to pay a premium for sustainable products.

Despite this, only 27% of suppliers report having a clear understanding of their customers’ sustainability needs. Bain advises suppliers to focus on customer engagement, value creation, and smarter sustainability strategies to maintain their competitive edge.

Related Article: Mercedes-Benz Expands Sustainability Efforts in India with New Centers for Climate Innovation and Charging Infrastructure

AI’s Role in Sustainability

AI offers opportunities to bridge the gap between consumer expectations and sustainable business practices. By embedding AI into sustainability initiatives, companies can drive innovation while reducing their carbon footprints.

“We encourage companies to embed AI within sustainability initiatives to fuel innovation and resilience,” added van den Branden. “Businesses can lead the charge toward a greener, tech-driven future by making sustainability a core part of their strategy.“