Guest post by: Freddie House, Chief Revenue Officer of Sweep
Amidst deregulation, ESG backlash, and heightened cost pressures, there’s logic in assuming organizations will retreat to a compliance-only stance on corporate sustainability. Investing scarce capital on programs that don’t appear to actively contribute to the bottom-line or core P&L is hard to justify.
Yet, this supposed trade-off between compliance and profitability is both outdated and reductionist. Following the regulatory carrot is one approach to mitigating risk, as regulation still matters: the EU’s Corporate Sustainability Reporting Directive (CSRD) alone will pull thousands of companies into mandatory disclosure. But legal minimums are lagging indicators of where the trajectory is headed. Compliance is the floor, not the ceiling, and well-managed sustainability programs can have tangible, near‑mid and long-term returns that far outweigh their costs.
The State of Play in 2026
December 2025 saw the 10th anniversary of the Paris Climate Agreement, when the world’s leaders set themselves stringent targets to reach net zero emissions by 2050. Back at its inception in 2015, this heightened awareness of the climate emergency brought with it bold targets, big spending, and an influx of talent.
As the economic and political tide has turned, budgets are tighter; teams are leaner. Companies are facing a hard truth: sustainability programs need to be built for efficiency without losing impact. Some organizations have buried their heads in the sustainability sand, and, for them, net zero and corporate sustainability has become a compliance-only standpoint.
For forward-looking companies the opposite approach is winning out. Organizations are in fact, doubling down on compliance, with an understanding that sustainability programs can help both the top and bottom line. A recent study by Harvard Business Review found just 13% of companies have retreated at all from sustainability, while 85% have held steady or accelerated their efforts – often under the radar.
The ROI of Compliance
In times of economic uncertainty, the true value of sustainability initiatives lies in the twin benefits of efficiency and risk mitigation. Efficiency ultimately drives down costs, which can also curb emissions, while taking control of your company’s exposure to supply chain risks, potential climate events, and more, protects it for the future.
When sustainability data is embedded in everyday workflows and treated as a form of Business Intelligence, a cost centre can quickly become a value creator. The right data, plus clear visibility and framing, allows organizations to calculate ROI across different initiatives and evidence how they support net profit, efficient resource management, and long-term resilience. A perfect example of this is supplier management; Scope 3 (value chain emissions) is the quiet but significant drain on a company’s footprint, often representing at least 90% of total emissions, depending on the sector. With accurate data on emissions hotspots, teams can prioritize supplier activities and product lines that matter most e.g. de-prioritizing vendors that have huge energy inefficiencies (often a big drag on capital).
This approach also puts companies in a better position to negotiate on procurement – for example by introducing reward schemes for carbon reduction, such as longer contracts or preferred status – ultimately reducing the number of high-risk suppliers and thus making their supply chain more resilient.
As far as investors are concerned, strong non-financial data management is also a sign of financial health – industry research finds 58% of global investors agree that due diligence on ESG increases monetary value, and 88% of global investors continue to show a strong interest in sustainable investing.
Gaining a Competitive Advantage
Despite up-front investment of time and capital, the long-term competitive advantage and resilience gains that organizations can expect from doubling-down on ESG are evident. Climate risk is business risk, whether in the form of drought-affected raw materials or extreme‑weather disruptions to operations and logistics. Extreme weather events linked to climate change are already costing global businesses billions. By reducing exposure to climate-related threats, companies can maintain operational continuity and strengthen their competitive position in a rapidly evolving market.
My advice to fellow C-suites? Get ahead of the low-carbon transition now. It’s already here, and creating new economic opportunities from sustainable finance and attractiveness to investors, to competitive differentiation. The organizations that treat sustainability as more than a regulatory tick-box will capitalize on these benefits, and build the competitive advantage that will lead to sustainable success long into the future.
