Sustainability is facing increasing resistance. In the United States, President Donald Trump and other political figures have criticised environmental, social and governance (ESG) standards as distractions from economic growth. Similar pushback is surfacing elsewhere, as firms face scrutiny over greenwashing, shifting regulations and the perceived costs of ESG compliance.
Despite this climate, many companies are proving that sustainability can drive – instead of dilute – business value. Take the case studies I’ve published on Brazilian pulp manufacturer Suzano, Swiss cement giant Holcim and Italian energy group Enel, which show how firms can turn sustainability into a source of long-term advantage.
Alongside Ivanka Visnjic (Esade Business School) and Michael L. Tushman (Harvard Business School), I examined over a dozen companies navigating this shift. Their stories demonstrate that it is possible to embed sustainability into the core of how a business operates.
Doing so requires managing three fundamental tensions. First, companies must balance long-term sustainability goals with short-term financial targets. Second, they need to encourage system-wide change while keeping people engaged locally. Third, they must open up to outside collaboration without losing internal cohesion. Each of these steps requires deliberate action to manage trade-offs.
1. Strategy: Balancing long-term goals with short-term delivery
Plenty of CEOs talk about sustainability. But the companies we studied went further. They defined specific, measurable goals and allocated resources accordingly.
Holcim, for example, exited markets where sustainability would not pay off. It then used the capital to invest in four key areas: climate, circularity, water and nature, and communities. It also set medium-term targets, such as joining the Science Based Targets initiative’s Business Ambition for 1.5°C campaign.
To deliver results, the companies we studied built innovation portfolios across three types of initiatives:
Scale proven ideas: These are projects with manageable risk and ROI timelines. When Enel committed to clean energy in 2014, neither solar nor any other green-energy technology was economically viable at scale. But by investing early, Enel helped bring solar – already proven in the lab and on a small scale – to maturity.
Holcim is doing the same with carbon capture technologies, backed by the European Union Innovation Fund. According to Wright’s Law, the cost of a technology tends to fall by a consistent percentage with every doubling of cumulative production. Solar panel costs, for instance, dropped by 20 percent every time global capacity doubled. By accelerating deployment, Holcim is not only making carbon capture viable sooner, but also positioning itself at the forefront of sustainable construction.
Enter new markets: Some firms invested in new businesses that support their sustainability agenda in the medium term. Enel launched Enel X and Enel Way to tap into smart homes and electric mobility. Likewise, Morocco’s phosphate-based fertiliser giant OCP Group expanded into green hydrogen and sustainable agriculture through Innovx. France’s Schneider Electric and Norwegian chemicals group Yara created digital platforms that help other companies manage production and thus meet their own sustainability goals.
Undertake transformative projects: These long-term bets test unproven technologies. Enel has moved from decarbonisation to full circularity, including solar panels made of recycled plastic. Holcim committed 2 billion Swiss francs to breakthrough technologies, such as a 3D-printed bridge made from recycled materials.
2. People: Driving system-wide change locally
Unsustainable practices can emerge anywhere in an organisation. Purchasing teams may work with suppliers that ignore sustainability standards. Standard production methods may emit excessive carbon. R&D departments might overlook environmental factors when developing new products and services.
But the reverse is also true. Opportunities to advance sustainability can come from any part of the business. Local marketing or R&D teams, for example, may spot ethical consumer segments or identify unmet needs in lower-income markets.
Sustainability challenges and opportunities can exist across departments. But change must happen in a way that respects local conditions. The firms we studied tackled this by:
Decoupling problems from solutions: Employees often hesitate to raise sustainability issues if they also feel pressured to solve them. Companies like Holcim and Enel encouraged people to flag issues, even if they had no answers, and supported them with expert teams.
Holcim’s Plants of Tomorrow programme is a good example. It helps plant managers apply technologies like AI and digital twins (virtual models of real-world systems) to reduce emissions and energy use. So far, it has completed more than 2,000 deployments. The rollout of new technologies is fast – within 100 days – and includes audits to verify actual impact. Successful cases are shared internally.
Building dual reporting structures: At Suzano, the innovation and sustainability divisions were merged under a single leader, with two directors – one for innovation and one for sustainability – reporting to them. This ensured new products meet both commercial and environmental goals from day one. The company’s sustainability strategy also includes a broader social vision, such as lifting 200,000 people out of poverty by 2030.
Creating entry points: Holcim’s Maqer Garage gives local leaders the tools to work with start-ups. Modules in London, Cologne and Paris taught participants how to use data, build prototypes and manage change quickly. The programme introduced concepts like “fail fast, learn fast” to encourage rapid testing. Meanwhile, Suzano’s “small projects, big returns” initiative gives teams the budget and autonomy to run local projects with environmental or social impact.
Fostering experimentation: Enel launched initiatives like “My Best Failure” to normalise risk and reward creativity. OCP Group’s Le Mouvement (a company-wide initiative promoting grassroots innovation) empowers hybrid teams to develop ideas linked to core goals, ranging from virtual mining simulations to community engagement.
As a capital-intensive business, Suzano encourages operators to test efficiency ideas directly and supports small-scale trials to manage financial risk. Employees can also develop projects that support nearby communities. Ideas with potential are scaled quickly across the company.
3. Collaboration: Opening up while staying aligned
No company can meet its sustainability targets alone. Most benefit from innovations by start-ups, universities or new ventures. At the same time, they face growing pressure to reduce Scope 3 emissions – those caused by suppliers and customers.
The United Nations’ greenhouse gas protocol and other standards now require companies to report these indirect emissions. For many firms, Scope 3 accounts for the majority. For Schneider Electric, for example, Scope 3 makes up more than 99 percent of its total emissions.
To tackle this, firms need to engage external partners. Many now follow a “venture client” model, offering start-ups real-world environments to test solutions. Enel did this with Nozomi Networks, a cybersecurity start-up that went on to become a global leader.
But partnerships often remain siloed. Holcim and Yara had strong pilots but struggled to scale them across the business. To overcome this, some companies set up dedicated units for external innovation.
OCP developed new fertiliser products in a separate unit linked to its core operations. Enel created Enel X as a separate entity that reports to the CEO. It later built innovation hubs and toolkits that connect its business lines with start-up ideas. These tools help business unit leaders and innovation teams identify external collaborations and manage them together.
Moving forward
Sustainability can’t be bolted on. It has to be embedded. The most successful companies treat sustainability as a strategic transformation, invest in scalable innovations and get every part of the business involved. They set up structures that empower local teams to act while keeping broader goals in view. They also understand that sustainability is a team sport – with players both within and beyond the organisation.
Companies that thrive in this new landscape see sustainability not as a constraint but as a catalyst for innovation and purpose-driven growth. Few embody this better than Suzano, whose guiding principle is, “It’s only good for us if it’s good for the world”. This ethos offers a clear reminder: When sustainability is built into the business model, both companies and society stand to benefit.
This is an adaptation an article originally published in Harvard Business Review.
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