Takeaways

• New Bain & Company research shows companies may be talking less about sustainability but are acting more decisively.
• Around 25% of global emissions could be profitably mitigated today through proven decarbonization levers.
• AI is emerging as a key tool in ESG, though its own emissions footprint could become a challenge.

Despite a decline in how much companies talk about their sustainability agendas, new research suggests that businesses are increasingly prioritizing action over words. Bain & Company’s latest study reveals that while executives may be quieter about Environmental, Social, and Governance (ESG) initiatives, they are moving faster to deliver measurable results, a phenomenon the firm calls the “do-say gap.”

The consultancy analyzed more than 35,000 statements from 150 leading companies dating back to 2018. It found that the slowdown in sustainability rhetoric observed in the past two years is now “bottoming out.” Executives are shifting focus from compliance to profitability, incorporating sustainability into core business strategies rather than framing it as an external obligation.

“CEOs might speak less about sustainability, but what they lack in words, they make up in action,” said Jean-Charles van den Branden, Bain’s global sustainability practice leader. “We have identified profitable decarbonization levers ready for companies to power their net-zero journey.”

Read More: ESG Trends: Annual Outlooks, Regulations, and Developments

The research highlights that 25% of global carbon emissions could be reduced profitably today. These “ROI-positive” levers include energy efficiency upgrades, supply chain localization, and circular design principles. A further 32% of emissions reduction opportunities could become profitable in the medium term, depending on advances in policy, technology, and customer preferences.

Bain also surveyed 14,000 consumers across eight countries, finding that 80% continue to care about sustainability, even amid economic uncertainty. On the business-to-business side, a survey of 750 organisations across industries such as automotive, packaging, and construction found that more than half prioritize sourcing from sustainable suppliers, with nearly 70% planning to increase such purchases in the next three years.

Artificial intelligence (AI) is also shaping ESG strategies. Of the 400 executives polled, almost 80% believe AI will make a significant contribution to sustainability efforts, though more than half are still in the pilot stage of adoption. However, the research warned that unchecked AI growth could bring its own emissions problem. Data centres powering AI could account for 2% of global carbon emissions by 2035, or 17% of all industrial emissions.

Also Read: How Systemic Funds Can Drive Decarbonisation Efforts

While large companies are finding profitable ways to act, small and medium-sized enterprises (SMEs) face more hurdles. A money.co.uk survey of over 500 UK SMEs revealed that 44% see financial constraints as the biggest barrier to ESG implementation, followed by up-front costs (38%) and a lack of knowledge (36%). According to the Federation of Small Businesses, only one in four SMEs in the UK expects to reach net zero by 2050.

The findings point to a clear trend: Businesses may be talking less about ESG, but when it comes to action, many are moving forward with strategies that balance sustainability and profitability.

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Source: edie