• Top Barriers Identified: Lack of financial incentives, costly technology, and weak regulation hinder sustainability efforts.
• Critical Functions Disengaged: Operations and infrastructure report low involvement, despite being key to integrating sustainability goals.
• Practical Solutions Offered: Training, financial incentives, and operational integration are crucial for progress but underutilized.

Why it matters:

Corporate sustainability efforts are falling short due to internal and external barriers, according to ERM’s Sustainability Transformation Survey. Overcoming these obstacles is vital for achieving ambitious ESG goals and capturing commercial opportunities.

Key findings:

ERM surveyed C-suite executives and operational managers across industries to assess sustainability progress. The top barriers include:

• Lack of financial incentives linked to sustainability performance (48%).
• High costs or unavailability of required technology (43%).
• Weak or insufficient regulatory enforcement (41%).

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Disparity in engagement:

The survey revealed a disconnect between leadership optimism and operational realities:

• C-suite leaders: 56% report significant progress in sustainability efforts.
• Managers: Only 48% echo this optimism, citing poor integration of sustainability goals into operations (37% vs. 28% of C-suite).
• Operations and infrastructure teams: Only 42% feel significantly involved, the lowest among critical business functions.

“The integration of sustainability goals into business plans and operations is not moving fast enough for companies to effectively navigate this transition,” said Sabine Hoefnagel, ERM’s Global Leader of Sustainability and Risk.

Solutions for progress:

The survey identifies actionable steps to bridge gaps and drive engagement:

• Financial incentives: Tied to sustainability performance for leadership and employees.
• Tailored training: Focused on functional needs and sustainability-related skills.
• Operational integration: Clear targets, detailed data, and monitoring tools for embedding sustainability into daily business.

“It’s critical that companies tackle some of the barriers to sustainability progress and find ways to bring their employees along on the journey,” Hoefnagel emphasized.

The bigger picture:

Executives see more progress in equity and social issues (57%) than in climate (47%) and nature (45%). ERM highlights the importance of cross-functional collaboration and simplifying sustainability frameworks for practical implementation.

Bottom line:

To unlock sustainability’s full potential, companies must align incentives, empower managers, and integrate ESG goals across operations. Those that act now will be best positioned to achieve long-term resilience and capitalize on commercial opportunities.

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