Businesses tie sustainability to profit: report

Up to 32% of emissions cuts could become profitable as policy, tech, and demand shift.

CEOs and business buyers remain committed to sustainability because of the value it delivers, according to Bain & Company’s report.

The study estimates that a quarter of global carbon dioxide emissions could cut profitably through measures such as energy efficiency upgrades, circular product design, and supply chain localisation.

The report recommends that CEOs make these strategies a routine rather than optional.

An additional 32% emissions reduction could become financially viable in the coming years, depending on policy shifts, technological advances, and customer demand.

Artificial Intelligence (AI) adoption in sustainability has surged, the report finds.

Of the 400 C-suite and sustainability executives surveyed in nine countries, almost 80% say they see high or very high opportunity for AI to contribute to their sustainability agenda.

Yet more than 50% are still in the initial stages of piloting and exploring these AI applications.

The top 20% of leaders, mostly in technology and manufacturing sectors, use AI in sustainability efforts three times more often than laggards and are nearly three times more likely to focus on its long-term value creation.

However, industries need to be mindful of the environmental impact of scaling AI, the report warns.

AI and data centres could emit 810 million metric tonnes of carbon dioxide annually by 2035, or 2% of global emissions and 17% of industrial emissions.

In the US, this translates to the share of AI-driven industrial emissions increasing from 18% in 2022 to more than 50% by 2035.

Business-to-Business (B2B) companies are firmly tying commerciality to sustainability. In a survey of more than 750 global B2B customers across automotive, packaging, chemicals, machinery, metals, and construction companies, half said they already buy more from their more sustainable suppliers, and nearly 70% plan to accelerate those purchases over the next three years.

Nine in 10 leaders, those with greater year-on-year revenue growth compared to peers, expect sustainability to have a positive impact on their business over the next three years.