Key Impact Points:
- Companies with fully integrated sustainability strategies are 40% more confident in their 12-month business outlook
- Only 18% of businesses link sustainability to long-term strategy; 57% would cut sustainability initiatives first during downturns
- Boards and C-suites remain misaligned: 82% of board members see sustainability as standalone, versus 25% of senior leaders
Companies Keeping Sustainability Separate Risk Falling Behind
EY’s latest Long-Term Value and Corporate Governance survey reveals a persistent disconnect: while the business case for sustainability is clear, most companies still treat it as an isolated function. The survey, which includes 200 senior business leaders across the EU, UK, Norway, and Switzerland, identifies a critical gap in leadership alignment and strategic integration.
“Investors increasingly recognize the value that can be realized through integrating sustainability into decision-making,” said Fiona Watson, Vice President, Corporate Performance & Accountability at the World Business Council for Sustainable Development.
Pressure Mounts on European Boards to Act
The research shows 91% of businesses feel investor pressure to accelerate sustainability, and 78% feel pressure from activists. Yet just 18% of firms focus on long-term sustainability and only 19% align it with overall business purpose.
Gill Lofts, EY’s Global Financial Services Sustainability Leader, noted: “Financial institutions are taking a much more commercial approach to sustainability. The focus is on managing risks, business resilience and maximizing revenues.”
Integration Drives Performance and Confidence
Companies identified as Sustainability Integrators—just 27% of the sample—outperform their peers:
- 40% more confident in future performance
- Boards are 1.5 times more effective in achieving sustainability objectives
- Only 6% of them faced public backlash over sustainability—compared to 39% of non-integrators
“Sustainability cannot remain a siloed initiative; it must be recognized as a critical pathway for thriving businesses,” said Gerard Gallagher, EY Global Sustainability Leader – Clients & Industries.
Boards and Management Aren’t Aligned
The report underscores a significant divide: 82% of board members see sustainability as separate, but 75% of senior executives believe it’s embedded.
Boards also believe they perform well in this area—yet C-suites disagree. This misalignment hinders progress. It may explain why 80% of investors believe companies fail to justify long-term sustainability investments.
Lessons from the Leaders: How to Integrate Sustainability
EY identifies five key actions from leading companies:
1. Align Boards and Management
A structured “value bridge” framework helps align leadership on risks, financial impact, and long-term goals.
2. Make Everyone Accountable
“Sustainability is built into engineering, procurement, M&A and more,” said Karin Hoeing, Group ESG Director at BAE Systems. Only 8% of non-integrators share responsibility across the board, compared to 50% of integrators.
3. Build Company-Wide Skills
83% of integrators report strong sustainability capabilities throughout their teams. Hoeing added: “We have awareness training internally and a global Supplier Code of Conduct for our suppliers.”
4. Fund Sustainability Like Core Business
James Murnieks, CFO of Siemens GB&I, emphasized: “We approach investments by asking, ‘Is it moving us forward in terms of our financial performance goals and our sustainability goals?’”
90% of integrators are supported by adequate financing.
5. Leverage Technology to Deliver Results
Dr. Velislava Ivanova, EY Americas CSO, said: “Technology enables companies to collect more reliable data, manage performance, and support innovation across value chains.”
Conclusion: Full Integration Is No Longer Optional
Sustainability is no longer a niche concern—it’s a business imperative. Yet only an aligned leadership team can unlock its value.
“Only an aligned leadership team can make this happen,” the report concludes. Boards and C-suites must act now to integrate sustainability into the core of business strategy or risk missing financial, reputational, and operational upside.
Questions for Boards to Consider
- How well are we integrating sustainability into our core business strategy?
- How aligned are we, as a board, with senior management on sustainability priorities?
- Do we view sustainability and commercial goals as complementary or separate?
- Are all levels of management and staff engaged with the sustainability strategy?
- Do we fund and evaluate sustainability initiatives as rigorously as other investments?
- Are we adapting our sustainability strategy to evolving global dynamics and expectations?
Read EY Long-Term Value and Corporate Governance Survey 2025
