CSOs Optimistic About Global Sustainability Progress
<p>Corporate sustainability leaders expect global progress to continue over the next year, despite a landscape marked by policy uncertainty and geopolitical disruption. The World Economic Forum's first Chief Sustainability Officers' Outlook reveals a shift in how businesses approach environmental performance. Companies are moving from target-setting exercises toward operational integration where sustainability directly influences investment decisions, risk management and competitive positioning.</p><p>The survey gathered responses from 103 senior sustainability leaders across five continents between February and March 2026. Participants came from the Forum's global Chief Sustainability Officers Community. Their responses paint a picture of cautious momentum. Sustainability remains embedded in corporate decision-making, though the pace varies considerably across sectors and markets.</p><p>For UK businesses navigating net-zero commitments, supply chain requirements and procurement criteria, the findings highlight a critical development. Environmental performance is becoming inseparable from commercial resilience. That matters particularly for companies facing public sector tender requirements or working within supply chains where carbon reporting has become standard practice.</p><h2>Corporate leaders expect momentum despite headwinds</h2><p>Sixty-three percent of respondents believe global sustainability progress will either hold steady or accelerate over the coming year. Meanwhile, three-quarters expect corporate investments in the sustainability transition to remain unchanged or increase during the same period.</p><p>However, the optimism comes with significant qualifications. Policy uncertainty emerged as the most frequently cited constraint, with 68% of leaders identifying it as a barrier to progress. Short-term business pressures followed at 61%, while international tensions ranked at 54%.</p><p>These figures suggest that sustainability leaders recognize the challenges ahead. Changing regulations, inconsistent government priorities and uncertainty over future incentives complicate long-term planning. When companies face weak demand or higher financing costs, projects with extended payback periods often face delays, even when they support resilience.</p><p>The gap between overall optimism and specific constraints reveals an important dynamic. Progress may continue globally while slowing in particular regions or sectors. For UK manufacturers and service providers, this creates both risk and opportunity. Companies that can demonstrate commercial value from sustainability measures will likely maintain investment even during economic volatility.</p><h2>The business case drives investment decisions</h2><p>The survey identified the strengthening business case for sustainability as the leading factor that could accelerate progress over the next three years. Sixty-four percent of respondents cited this driver, indicating a fundamental shift in how environmental measures are evaluated.</p><p>Rather than relying solely on regulatory compliance or long-term environmental benefits, businesses increasingly assess initiatives through operational metrics. Cost reduction, resource productivity, supply chain resilience and access to capital now feature prominently in investment decisions. This represents a transition from sustainability as a reporting exercise toward integration with core business strategy.</p><p>Lower costs and greater availability of sustainability technologies ranked as another major accelerator, cited by 56% of respondents. As renewable energy, energy efficiency equipment and monitoring systems become more accessible, the economic case for adoption strengthens. For smaller businesses, this trend matters considerably. Technologies once viable only for large corporations are becoming practical for operations of all sizes.</p><p>The emphasis on commercial credibility reflects mounting pressure on sustainability teams to demonstrate tangible value. Businesses can no longer justify spending purely on environmental grounds when boards demand clear returns. Consequently, successful programs increasingly link environmental performance to competitive advantage, whether through reduced operating costs, improved risk management or enhanced reputation with customers and investors.</p><p>For companies working with public sector clients, this shift aligns with procurement requirements outlined in <a href="https://sbs.eco/net-zero-program/">Procurement Policy Note 06/21</a>, which requires carbon reduction plans from suppliers. The commercial case and compliance requirements now reinforce each other, creating stronger incentives for action.</p><h2>Digital technology creates opportunities and challenges</h2><p>Artificial intelligence emerged as both a potential accelerator and a source of new environmental pressures. Approximately 73% of sustainability officers expect digital technologies to support environmental objectives over the next year, particularly through risk modelling, process efficiency, measurement and monitoring.</p><p>Half of respondents anticipate measurable improvements in corporate sustainability performance within 12 months from AI adoption. Over a three-year horizon, leaders see the greatest potential in environmental risk forecasting, resource and energy efficiency, and measurement of environmental impacts.</p><p>Nevertheless, the technology presents significant trade-offs. Seventy-seven percent identified the energy and resource intensity of AI infrastructure as its most substantial negative impact. Data centres require considerable electricity, often drawing from grids still reliant on fossil fuels. Water consumption for cooling systems adds another environmental burden, particularly in regions facing water scarcity.</p><p>Only 37% of respondents believe AI's sustainability benefits will outweigh its environmental costs. Thirty-five percent remained neutral, while 28% disagreed. This skepticism reflects genuine uncertainty about whether efficiency gains will offset the resource demands of expanding digital infrastructure.</p><p>Skills shortages compound these challenges. Sixty-eight percent of leaders identified workforce capabilities as a major obstacle to using AI effectively. Companies need staff who can interpret model outputs, integrate insights into operational decisions and assess whether claimed benefits materialize in practice. For many UK SMEs, building this expertise presents a significant barrier.</p><p>The tension between AI's potential and its costs will likely intensify as businesses expand their use of data-intensive systems. Companies that pursue digital transformation will need robust governance frameworks to ensure that efficiency improvements actually reduce environmental impact rather than simply enabling increased consumption.</p><h2>Adaptation moves from peripheral concern to strategic priority</h2><p>Climate adaptation is rising rapidly on the corporate agenda. Eighty-five percent of respondents expect adaptation to climate and nature-related physical impacts to receive greater global attention. Seventy-seven percent believe private sector investment will prove decisive in scaling adaptation efforts.</p><p>This shift extends sustainability priorities beyond emissions reduction toward preparing operations, infrastructure and supply chains for physical impacts. Businesses increasingly recognize that transition planning alone cannot address the risks they face. Extreme weather, water scarcity, supply chain disruption and infrastructure damage require direct investment in resilience.</p><p>Potential areas of spending include resilient infrastructure, climate risk analytics, water security, supply chain redesign and protection against extreme weather events. For UK businesses, adaptation considerations might include flood defenses for facilities, diversification of supply sources, or contingency planning for transport disruptions.</p><p>Funding these investments remains difficult. Sixty-two percent of respondents said uncertainty about costs and benefits could impede financial commitment. Unlike efficiency projects that reduce operating costs, adaptation investments often prevent future losses rather than generating immediate returns. This makes conventional financial analysis more complex.</p><p>The value of adaptation lies in avoiding costs that might never materialize, which complicates business case development. How should a company value flood protection if the severity and frequency of future flooding events remain uncertain? Traditional financial models struggle with these questions, potentially leading to underinvestment in resilience.</p><p>Mobilizing private capital for adaptation will require clearer revenue structures, risk-sharing mechanisms and stronger public-private cooperation. Governments and financial institutions have a supporting role, even as companies lead much of the implementation. For SMEs, access to <a href="https://sbs.eco/compliance/">adaptation finance and risk assessment support</a> will likely prove critical.</p><h2>Survey findings at a glance</h2><ul><li>Sixty-three percent of sustainability leaders expect global progress to remain stable or accelerate over the next year, despite policy uncertainty and geopolitical tensions.</li><li>Three-quarters anticipate corporate sustainability investments will remain unchanged or increase during the same period, suggesting continued commitment despite economic pressures.</li><li>Sixty-four percent identify a stronger business case as the leading factor that could accelerate progress, reflecting a shift toward commercial integration of environmental measures.</li><li>Sixty-eight percent cite policy uncertainty as the primary constraint on progress, followed by short-term business pressures and international tensions.</li><li>Eighty-five percent expect climate adaptation to become a greater global focus, with seventy-seven percent viewing private sector investment as decisive for scaling resilience efforts.</li><li>Seventy-three percent believe artificial intelligence will support sustainability objectives, though seventy-seven percent identify the energy intensity of AI infrastructure as its most significant negative impact.</li><li>Only thirty-seven percent believe AI's sustainability benefits will outweigh its environmental costs, highlighting genuine uncertainty about digital technology's net impact.</li></ul><h2>Commercial credibility determines which programs survive volatility</h2><p>The survey findings carry practical implications for UK businesses navigating the sustainability transition. First, economic credibility increasingly shapes corporate ambition. Programs that reduce costs, protect assets, improve productivity or strengthen supply chains are more likely to survive economic and political uncertainty than those justified purely on environmental grounds.</p><p>For smaller businesses, this means prioritizing measures with clear financial returns. Energy efficiency improvements, waste reduction, resource productivity and supply chain resilience offer tangible benefits that justify investment regardless of regulatory requirements. These measures also strengthen responses to tender requirements and customer expectations around environmental performance.</p><p>Second, digital tools require careful governance. AI and related technologies can improve measurement, forecasting and risk management. However, companies must account for energy consumption, resource use, data quality and workforce readiness. The possibility that efficiency gains simply enable increased consumption rather than reducing environmental impact demands ongoing monitoring.</p><p>Businesses should assess whether digital investments actually deliver claimed sustainability benefits. This requires clear metrics, regular reviews and willingness to adjust course when systems fail to perform as expected. Training staff to interpret and apply digital insights represents another essential investment, particularly for companies without established data science capabilities.</p><p>Third, adaptation finance must become more investable. The growing focus on resilience requires new approaches to valuing avoided losses, pooling risks and combining public funding with private capital. Businesses need frameworks that allow them to justify adaptation spending through conventional financial governance while recognizing that benefits may be indirect or long-term.</p><p>For UK companies, particularly those in sectors exposed to physical climate risks, developing adaptation strategies should begin now. Supply chain diversification, infrastructure resilience, water security and contingency planning all require time and investment. Waiting until disruptions materialize leaves businesses reactive rather than prepared.</p><p>The connection between sustainability and commercial decision-making will likely strengthen further. Consequently, businesses that integrate environmental performance into operations, investment decisions and risk management will gain advantages over those treating it as a compliance exercise. The <a href="https://sbs.eco/net-zero-hub/">transition from target-setting to implementation</a> demands this operational integration.</p><h2>What businesses should consider</h2><p>Companies should evaluate their sustainability programs through a commercial lens. Which measures reduce operating costs, improve resilience or strengthen competitive positioning? Which rely solely on regulatory compliance or reputational benefits? The former will likely attract continued investment even during economic downturns, while the latter face greater risk of delay or cancellation.</p><p>Businesses should also assess their exposure to policy uncertainty. Diversifying across multiple drivers reduces vulnerability to changes in government priorities or incentive schemes. For example, energy efficiency projects justified by cost savings remain viable even if carbon pricing or renewable subsidies change. Similarly, supply chain resilience investments protect against both climate impacts and geopolitical disruption.</p><p>Digital technology adoption requires realistic assessment of benefits and costs. Companies should quantify energy consumption and resource use associated with new systems, not just assume efficiency gains translate to reduced environmental impact. Building workforce capabilities to use these tools effectively represents another critical step, potentially through external training programs or partnerships with technical specialists.</p><p>Adaptation planning should begin with risk assessment. Which physical climate impacts pose the greatest threats to operations, supply chains or infrastructure? What investments could reduce vulnerability? How should the company value avoided losses when building business cases? Engaging with industry peers, insurers and technical advisors can help develop credible approaches to these questions.</p><p>For businesses working with public sector clients or within supply chains requiring carbon reporting, maintaining momentum on net-zero commitments remains essential. Procurement requirements will likely persist regardless of broader policy uncertainty. Companies that establish robust measurement, reporting and reduction programs now will be better positioned when requirements tighten further.</p><p>The World Economic Forum findings present neither unqualified optimism nor pessimism. Instead, they describe a transition entering a more complex phase. Early enthusiasm driven by target-setting has given way to the harder work of implementation, where commercial viability, technical feasibility and policy stability determine outcomes.</p><p>UK businesses should recognize that sustainability progress will increasingly depend on whether environmental measures contribute to operational performance and resilience. The companies that succeed will be those that treat sustainability not as a separate workstream but as integral to how they operate, invest and manage risk. That integration requires sustained effort, but it also creates advantages that extend well beyond environmental reporting.</p><h2>Where to find additional guidance</h2><p>The <a href="https://www.weforum.org/">World Economic Forum</a> published the full Chief Sustainability Officers' Outlook, which provides detailed findings from the survey and analysis of emerging trends in corporate sustainability.</p><p>The <a href="https://www.gov.uk/government/organisations/department-for-energy-security-and-net-zero">Department for Energy Security and Net Zero</a> offers guidance on UK climate policy, net-zero targets and support schemes for businesses pursuing emissions reductions.</p><p>The <a href="https://www.gov.uk/government/publications/procurement-policy-note-0621-taking-account-of-carbon-reduction-plans-in-the-procurement-of-major-government-contracts">Procurement Policy Note 06/21</a> sets out requirements for carbon reduction plans from suppliers bidding on central government contracts above £5 million annually.</p><p>The <a href="https://www.cisl.cam.ac.uk/">Cambridge Institute for Sustainability Leadership</a> provides research and resources on climate adaptation, including frameworks for assessing physical risks and developing resilience strategies.</p><p>The <a href="https://www.bankofengland.co.uk/climate-change">Bank of England</a> publishes guidance on climate-related financial risks, including physical and transition risks that affect business operations and investment decisions.</p>
