In boardrooms from London to Singapore, the language of transition planning has become familiar. Yet too often, climate strategies remain siloed from nature, and both sit at the margins of core business decision-making. A new white paper released this week argues that this separation is no longer commercially viable—and that companies persisting with short-term, fragmented approaches risk eroding long-term value.
The warning comes from the Council on Sustainability Transformation, a high-level group of leaders from business, government, and academia convened by ERM, which has published its latest paper, Aligning Climate, Nature, and Markets. The report makes a blunt case: without integrated climate- and nature-focused transition plans embedded into corporate strategy, companies will miss critical opportunities to build resilience, protect enterprise value, and unlock new sources of growth.
From Sustainability Add-On to Strategic Core
The paper challenges prevailing corporate operating models that treat climate and nature as compliance or reporting exercises rather than strategic variables. It argues that accelerating environmental degradation is already reshaping markets through supply-chain disruption, widening insurance gaps, and rising capital costs—with impacts now visible across sectors from agriculture and mining to manufacturing and financial services.
Against this backdrop, the Council urges business leaders to move beyond incrementalism. Companies that act early to integrate climate and nature considerations into strategic planning, capital allocation, and day-to-day operations, the paper argues, are better positioned not only to mitigate downside risk but to gain competitive advantage.
Making Risks—and Opportunities—Decision-Grade
A central theme of the paper is the need for what it describes as “CFO-grade rigor” in assessing climate and nature impacts. This includes identifying and quantifying material risks and opportunities using tools such as scenario analysis, natural capital accounting, and true cost accounting.
By translating environmental dependencies and impacts into financial terms, the Council argues, companies can make more informed investment decisions and strengthen resilience in the face of volatility. This approach reframes climate and nature not as external pressures, but as core inputs into long-term value creation.
Local Action, Global Ambition
While global frameworks and targets remain essential, the paper emphasizes that effective transition planning must ultimately be grounded in local realities. Businesses are encouraged to align high-level climate and nature ambitions with targeted strategies informed by robust local data.
In the near term, the Council highlights particular pressure points already confronting companies, including water scarcity, land-use constraints, and biodiversity loss. Addressing these challenges at the operational level is presented as a prerequisite for credible transition planning—and for maintaining social license to operate.
Collective Action Beyond the Firm
The paper also stresses that internal action alone will be insufficient. Companies are encouraged to complement their own transition efforts by building external momentum—through partnerships, coalitions, and cross-sector collaboration that can reduce risk and unlock shared value.
This includes engaging investors to build alignment around long-term transition strategies, and working with policymakers to help shape enabling environments that recognize climate and nature as drivers of economic resilience rather than constraints on growth.
Leadership for a Volatile Decade Ahead
Sabine Hoefnagel, ERM’s Global Leader of Sustainability & Risk, framed the stakes in stark terms. “We are now at a point where climate and nature risks are material, accelerating, and already reshaping markets,” she said. “Companies taking action to integrate climate and nature into their core strategies are not only mitigating risk, they are capturing new value while building the foundations for long-term growth.”
She added that leaders who invest in robust transition planning, align global ambition with local action, and collaborate with investors, policymakers, and peers will be far better prepared for the instability ahead. “Delay isn’t a neutral act—it’s a gamble that companies can’t afford to lose,” she said.
A Council Shaping C-Suite Thinking
This is the third white paper released by the Council on Sustainability Transformation. Earlier papers focused on strengthening company–investor engagement as a catalyst for climate action, and on rethinking sustainability strategies amid geopolitical, economic, and societal turbulence.
The Council brings together a group of prominent former executives and policymakers, including Peter Agnefjäll (former CEO of IKEA Group), Mark Cutifani (former CEO of Anglo American), Connie Hedegaard (former EU Commissioner for Climate Action), Naoko Ishii (former CEO and Chair of the Global Environment Facility), Feike Sijbesma (former CEO of Royal DSM and current Chair of Philips), and Johannes Teyssen (former CEO of E.ON).
For policymakers, investors, and corporate leaders alike, the message of the latest paper is clear: the next phase of transition planning will be defined not by ambition statements, but by how deeply climate and nature are woven into the mechanics of business itself.
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