SE Advisory Services: Sustainability Execution Matters

Sustainability strategy now sits at the centre of long-term enterprise value creation, according to the 2026 Executive Report produced by SE Advisory Services and IESE Business School. Most large organisations hold high ambition and access to vast quantities of data.

Despite this, a large portion of potential financial value remains uncaptured because of a gap in organisational capability. The joint analysis states that building a precise financial case for sustainability requires embedding practices across core business functions such as operations, risk and financing.

Insights from the Chief Sustainability Officer (CSO) Circle, convened by IESE's Institute for Sustainability Leadership, point to a need for linking data directly to decision-grade financial insight in order to close this execution gap.

Energy efficiency in manufacturing

Industrial energy use could offer the most immediate financial return when assessed through a holistic strategic approach, according to the report. Energy efficiency functions as a margin and resilience strategy, protecting operations against volatile input costs.

Studies cited in the report show wide variation in energy consumption across manufacturing sites producing identical goods. This includes a five-fold gap in plastic bag manufacturing and a seven-fold gap in brick production.

When companies factor in operational benefits such as reduced downtime and lower maintenance alongside raw energy savings, the total value of an efficiency project increases by 40% to 250%. Within industrial energy projects, targeted efficiency optimisation initiatives typically deliver 15% to 20% in energy savings with payback periods of three to four years.

"One idea from this research stayed with me. Yes, sustainability creates value. But this value capture doesn't happen automatically," writes Steve Wilhite, Executive Vice President at SE Advisory Services, on LinkedIn.

Supply chains and procurement

The largest concentration of environmental exposure and value-creation potential sits outside a company's immediate footprint, within its supply chain, according to the report. Scope 3 emissions account for more than 70% of total corporate emissions on average, which makes supply chain traceability a central operational focus.

By 2035, the World Economic Forum estimates that up to 7% of annual corporate earnings could be lost to climate hazards. This makes climate-related asset exposure a determinant of asset valuation, earnings volatility and long-term enterprise value.

Sustainable procurement programmes could help mitigate these risks. According to SE Advisory Services and IESE Business School, approximately one-third of companies report that such initiatives have prevented supply-chain disruptions.

For the world's largest companies, the report states that the projected annual financial impact of climate physical risk could reach up to US$1.2tn in the coming decades. This figure does not account for second-order impacts on revenue, demand or supply chain disruption.

According to the report, only 35% of companies have context-specific climate adaptation plans in place, and only 30% report on them. Circular procurement and the reintegration of secondary raw materials could reduce energy intensity and input costs while supporting supply security.

"Companies with this level of financial discipline report up to 20% lower energy use in the first year and up to 30% less unplanned downtime," writes Steve on LinkedIn. "The upside can extend well beyond operational savings. In one industrial company's shift to a circular business model, the opportunity was modelled to generate €1bn (US$1.14bn) in incremental revenue."

The report states that digital traceability platforms allow organisations to move from estimated supplier data to verified figures, which could capture new commercial opportunities and strengthen margin resilience.

Capital access and valuation

Sustainability performance has moved from a reputational signal to a direct input for credit risk assessment and capital allocation, according to SE Advisory Services and IESE Business School. Companies with credible, integrated sustainability strategies could benefit from improved risk perceptions, stronger investor confidence and lower borrowing costs, the report states.

Across European capital markets, more than 75% of investors report that sustainability performance shapes their allocation decisions, according to the report. Integrated decarbonisation roadmaps could unlock capital directly, as shown by an SE Advisory Services engagement in which verified Environmental, Social and Governance (ESG) credentials enabled a global manufacturer to secure up to €100m (US$113m) in sustainability-linked financing.

Private markets and equity investors increasingly reward businesses with embedded sustainability models through higher valuation multiples, the report finds. Treating sustainability as a measurable performance lever could allow companies to protect earnings stability while improving access to competitive financing.

Capturing the full upside of sustainability depends on what SE Advisory Services and IESE Business School term the Capability Multiplier. Under this framework, value is only realised when measurement, governance and digital execution work together.

The report draws on insights from the CSO Circle, convened by IESE's Institute for Sustainability Leadership with leaders from AltamarCAM Partners, Barceló Hotel Group, BBVA, CaixaBank, Gestamp, MANGO, Roca Group and Suma Capital. These insights point to a need for organisations to move from basic reporting toward active data-driven management.

Effective governance requires connecting sustainability metrics directly to capital allocation, board oversight and executive incentives. At the same time, SE Advisory Services and IESE Business School identify integrated digital capability as the core technological infrastructure needed for this shift, one that can reduce the time required to collect and validate ESG data by 25% to 40%.

Deploying digital monitoring tools alongside strong governance controls could help companies achieve up to 20% lower energy use in their first year and up to 30% less unplanned downtime.