Sustainability takes a hit as CEOs prioritise AI and inflation

About 30% of companies are struggling to meet their existing sustainability commitments.

CEOs are prioritising AI, growth, inflation, and geopolitical concerns over sustainability, Bain & Co reported.

Bain estimates that a 2-degree Celsius rise in temperature could erase $6t from the S&P 500's value, alongside devastating global impacts.

The report said that many companies are struggling to meet their sustainability goals. Amongst firms reporting progress through CDP, 30% are behind on reducing Scope 1 and 2 emissions, and nearly half are behind on Scope 3. Some companies are now reconsidering or even retracting their climate commitments.

“The transition to a sustainable world is following a familiar cycle,” said Jean-Charles van den Branden, Bain’s global Sustainability practice leader. “What began a few years ago as boundless excitement has given way to pragmatic realism.”

Despite shifting corporate priorities, consumer concern about climate change is growing. Bain’s survey of nearly 19,000 people across 10 countries found that 61% are more worried about climate change than two years ago, driven by personal experiences with extreme weather. 

Countries like Brazil, Indonesia, and Italy, which have been hit hard by weather events, show the highest levels of concern.

Consumers are also holding themselves accountable. Globally, 76% believe living sustainably is important, with even higher numbers in Brazil and Indonesia (90%) and Italy (84%).

Meanwhile, Bain highlighted the potential for AI to enhance sustainability. Consumers prioritise sustainability but often lack clarity on what makes a product truly sustainable. It suggests AI can help companies communicate sustainability more effectively.

“We encourage companies to embed AI within sustainability initiatives to fuel innovation and resilience,” said van den Branden. 

“But it’s critical they understand and address the potential impact of AI on their company’s carbon emissions from the outset. By embedding sustainability from the start, businesses can lead the charge toward a greener, tech-driven future,” he said.