Executive Summary: Corporate sustainability in the U.S. is under attack. Most companies have gone quiet, while some have retreated, destroying real value. The sustainability community seems nearly unanimous that maintaining momentum means getting “back to the business case”. But relying on a simple ROI alone falls short. In underestimates the value of sustainability and plays into a false narrative. A better path forward is to broaden the logic for action and connect to purpose.
It’s no secret that it’s been a rough year for corporate sustainability. Just a few years ago, large companies were eager to publicize bold goals around their climate change and equity efforts. Today, most U.S. companies are keeping their heads down and avoiding drawing attention to those topics. While I believe that most companies are still doing the work (to varying degrees), a chill in the space is palpable.
The reasons for the sustainability malaise are clear: aggressive social media campaigns against so-called woke companies, and direct pressure from the U.S. federal government to stop diversity and climate efforts. Aside from rare exceptions, talking about diversity has almost completely stopped. A Gravity Research study found that from 2024 to 2025, use of the term “DEI” in Fortune 100 company reports dropped by 98%.
The fundamental drivers of sustainability have not changed — we face enormous shared challenges. Time is running short and the stakes are too high, for both society and business, for companies to go backward. But it’s not easy to keep moving forward when those working on sustainability are scrambling to justify their work (after some years of strong support from C-suites). Anyone making the case for sustainability faces renewed skepticism and outright fear from their senior executives. And this is not just a problem for sustainability officers; any midlevel leader trying to, say, procure more sustainable materials or source clean energy is facing new questions.
How can we keep momentum going in the face of intense pressure to retreat? PepsiCo recently released “revised” sustainability goals, offering an example of a multinational trying to thread the needle: It is continuing or expanding important efforts on regenerative agriculture and renewable energy while pulling back on innovation around plastics and reusable containers.
The main answer to the momentum question, though — one that I’ve heard in sustainability events, LinkedIn debates, and many conversations with execs — seems to be a nearly universal conclusion that sustainability advocates in companies must “get back to the business case.” This is partly a logical reaction to what’s coming from the other side of the conference room table. From those C-suite execs who need to be convinced, I’m hearing things like, “We’ll still do sustainability, but only if there’s a clear ROI.” (That’s a direct quote.)
There’s nothing wrong with financial rigor — it is, of course, essential. But it’s odd to act as if we ever strayed from it. In 25 years in the field, I’ve never seen a time when sustainability managers did not make the business case. Yes, nongovernmental organizations and activists make moral and existential arguments — as they should — and those deeper reasons will always creep into corporate discussions. But we sustainability advocates have always described the rationale for action largely in financial terms. We’ve often focused on long-term value creation over quick wins, but we’ve always talked about dollars.
So the concern I have is not about “getting back” to the business case per se; we never left it. The real challenge I see is that a narrowing of the discussion to a more basic ROI mindset may do some real harm to our cause. Here are three reasons why I think it’s a problem, followed by five ways that I urge companies to frame the challenge instead.
Three Downsides to Excessive Focus on Sustainability ROI
All the talk about return on investment reminds me of when companies were less bold about their sustainability ambitions. This simpler business case focuses on a few big buckets of value creation: slashing costs, reducing risk, driving innovation and revenues, and maybe building brand value (including, critically, employee attraction and retention).
I’ve spent decades advocating for sustainability in business, so I’m no stranger to this business case. But I’m worried that this narrower argument could hinder progress on our existential challenges and make (primarily U.S.) companies less competitive and resilient.
Here are my three fundamental concerns:
There is a broader, stronger case than just ROI. Tools like ROI, internal rate of return, and net present value are useful, but they’re also flawed; they lean heavily on short-term and easily measured outcomes.
The logic for larger action on sustainability is broader than just what those kinds of metrics tell us. As I argued in an earlier column, there are three main buckets for action on our great environmental and social challenges: Businesses and their leaders should act because we need to, have to, and want to.
We “need to” because climate change, biodiversity loss, and rising inequality are existential threats that risk destabilizing society. Companies still “have to” take action to respond to both increased regulatory demands (like disclosure laws in the European Union and California) and rising stakeholder expectations, especially from younger consumers and employees around the world who are demanding more from companies. And we “want to” act because sustainable strategies, done well, can create value in core ways (cost, risk, revenue, and brand).
When people say “get back to the business case,” they usually mean only this third bucket. But all three parts of the logic for action matter, and they create a more complete, urgent rationale for bigger and bolder actions.
A narrow ROI case consistently undervalues sustainability. Most investment return tools are blunt instruments. We measure cash into a project and direct value out (such as reduced costs or increased sales). But these tools struggle to include hard-to-measure benefits that sustainability is chock-full of, such as resilience, talent attraction, employee engagement, and reputational risk. How would you price the risk of fossil fuel volatility that you can avoid through decarbonization? Or measure the risk reduction from avoiding human rights issues, or the value of higher employee engagement resulting from increased wages?
These intangibles create very tangible value. For instance, while paying some of the highest wages in retail, Costco has consistently outperformed its peers on a range of key metrics, including employee turnover — which is just 8% per year versus an industry average of 60%. And Costco is one of the very few large U.S. companies that has publicly maintained its commitment to diversity and inclusion.
Companies have also consistently overestimated the cost of action. It’s hard to grasp things moving at exponential speed, like the vast reduction in the cost of clean technologies. Solar and wind are the cheapest energy sources in most regions, and electric vehicles, over their lifetimes, cost less to operate. What other decarbonization tools and technologies are following this curve? (AI-driven efficiencies in grid, buildings, and transportation are good bets.) What savings might your business be missing if you choose not to invest in climate tech?
The societal costs of these blinders can be substantial. When you overestimate the cost of action and underestimate the value, you move more slowly and incrementally. It may be progress, but it’s not nearly enough to meet the moment or what the science demands.
The simple business case reinforces a false story. The most persistent myth I’ve battled in my work is the assumption that everything in sustainability always creates a drag on earnings. This view is taken as gospel, even when plenty of evidence says otherwise. For a large majority of executives, sustainability either equals philanthropy or is seen as a Trojan horse for a liberal agenda.
So when even well-intentioned people say, “We must get back to the business case,” it carries a bit of a self-defeating message — that is, that all the sustainability work that’s been done so far was, as critics said, not good for business (or was just a reaction to pushy stakeholders). It makes it sound like sustainability was never a strategic choice or a path to long-term value creation.
A Better Way Forward
What should leaders do? I have five recommendations.
If you’re under pressure to justify sustainability, then, sure, start with the narrower traditional ROI. But don’t stop there. Broaden the case you’re making, and bring in longer time horizons and categories of value that are harder to quantify.
Remind the senior decision makers of the “have to” and “need to” logic. The problems the world is facing are real and serious. They’re not abstractions, and they affect business directly; extreme weather can seriously disrupt supply chains at enormous expense. Laws are forcing more transparency, and stakeholders are watching. B2B customers still care about environmental footprint, and employees want to work for companies that stand for something.
Resist retreating. Pulling back or hiding can feel safer in the short run, but it can cost you in boycotts, lost business, and lower engagement. Look at those law firms that capitulated to White House demands to drop certain clients and make other concessions. They’re losing some major customers (and the braver firms are gaining them). I’ve talked to friends and family members at these firms. The morale among the younger lawyers is not high.
Ask executives to think about the broader operating environment. The U.S. is big, but the world is much bigger, and outside the U.S., the clean economy and sustainability agendas are still advancing. China is barreling forward into the clean tech future — more than half of the country’s new car sales are electric or hybrid. No matter what the current U.S. administration says, the world needs to decarbonize to ensure a thriving future. Ask yourself, what skills do companies need to keep up? And if society is getting more diverse, what practices and policies will help attract the broadest array of talent? Multinationals can’t ignore where the markets and society are going.
Finally, help leaders connect with purpose. There are moments where you can go beyond the numbers and reach executives as people, calling some assumptions into question. Our short-term profit obsession has greatly contributed to the mess we’re in. With those goals at the center of our collective story, we get what we seek — constant growth, but at the cost of a livable planet where everyone can thrive. Talk about meaning in business and in leaders’ lives. Ask them, “What legacy are you leaving? What do your kids think about your work?” The executives I’ve seen transition into having a real understanding of sustainability have most often cited conversations with their own children as a turning point.
There has rarely, if ever, been a time like this in American business. The fear of missteps or getting the wrong kind of attention is real. But the challenges we face and the pressures to do something about them haven’t changed — the urgency has only grown. This is a time for courage. We need the audacity to do the right thing for the world, and also to position companies for long-term resilience and relevance. Help your company resist the temptation to scale back its sustainability and diversity efforts. Make the full case with courage, clarity, and conviction.
[This article first appeared in MIT Sloan Management Review. See also some good discussion about it on LinkedIn.]
[Image: Generated by Bing AI]
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