Bain & Co: Do CEOs Care about Sustainability?
Research from Bain & Company found that CSOs remain committed to sustainability because of the corporate value it delivers.
The report, titled The Visionary's CEO’s Guide to Sustainability, shows an increase in prioritising sustainability, with 20% more CEOs linking it to business value in 2024 compared to 2018.
Jean-Charles van den Branden, Bain’s Global Sustainability Practice Leader, says: “After the initial years of bold ambitions and target setting, CEOs took a reality on their sustainability agenda last year.
"Today CEO’s might speak less about sustainability, but what they lack in words, they make up for in action.”
He describes this as a "phenomenon we call the ‘do-say’ gap".
Bain says that this gap is defined by forward-looking leaders turning to AI to accelerate that progress and manage its risks.
Finding value in sustainability
Bain's analysed more than 35,000 statements from CEOs of 150 major companies across the years 2018, 2022 and 2024.
The findings suggest a transition from viewing sustainability as a compliance requirement to recognising it as a value-driven initiative.
The report shows that 26% of firms are distancing themselves from suppliers with inadequate sustainability practices and leaders who leverage AI realise double the returns by addressing genuine sustainability challenges.
Despite these advancements, respondents acknowledged that existing progress is not yet enough.
A focus on climate resilience
As companies ramp up decarbonisation efforts, they still face the realities of a warming climate
Climate Action Tracker anticipates an increase in global temperatures of 2.5 to 2.9 degrees Celsius by 2100.
The CEO’s Playbook for Climate Resilience, a segment within the report, indicates that just 25% of corporate Scope 1 and 2 emissions are currently mitigable with positive ROI levers.
A majority of industries remain without a direct pathway to ROI-positive emissions reduction, a condition mirrored by banks integrating climate risk considerations into policies.
Bain advocates for business leaders to adopt a similar approach to avoid the tangible losses from climate change such as disrupted supply chains and loss of productivity due to environmental impacts.
Without adequate climate adaptation strategies, executives could encounter increased material scarcity and labour productivity declines.
Climate adaptation as a business benefit
In its 2024 survey, operations executives ranked ‘increased resilience’ as the second most important priority, with 41% of respondents selecting it as an “extremely important” operations priority in the next three years, just 4% under "reducing cost".
Despite this awareness, the report highlights that only 3% of all climate capital expenditure is directed toward adaptation and resilience according to data from the Climate Policy Initiative.
To mitigate these challenges, Bain offers several suggestions including:
- Focus on what matters most - tools like AI, geospatial analytics, digital twins and resilience scoring can help companies gain focus on climate risk.
- Design for robustness - maintaining efficiency while building flexibility and investing in adaptation where it matters most.
- Build resilience governance that works - COOs focus on efficiency, whilst CFOs see upfront cost with uncertain return, so leaders must ensure the same efficiency is applied to climate risk.
AI for sustainability
Bain says that the role of AI in reducing energy consumption, minimising waste, boosting workplace safety and expediting flexibility could help to achieve sustainability targets.
Among 400 C-Suite and sustainability executives across eight markets, nearly 80% perceive AI as offering substantial prospects for advancing sustainability objectives.
However, it is critical to manage AI's environmental impact as it could contribute 2% of global carbon dioxide emissions annually by 2035 unless efforts for renewable energy adoption are intensified.
The report identifies a "small but impactful group" it calls "shapers", distinguished by:
- Proficiency in scaling AI for sustainability
- Diversity in sustainable AI applications employed
- Value realised from AI-enabled sustainability initiatives
- Overall maturity in sustainability practices.
The emphasis isn’t solely on who leads in sustainability, but rather on leadership in AI integration.
