Why is Sustainability Essential for Visionary CEOs?

Bain & Company’s new research finds that CEOs remain committed to sustainability because of the significant value it delivers to their companies.

The report, titled The Visionary's CEO’s Guide to Sustainability, shows an increase in prioritising sustainability, with 20% more CEOs linking it to business value in 2024 compared to 2018.

Jean-Charles van den Branden, Bain’s Global Sustainability Practice Leader, says: “After the initial years of bold ambitions and target setting, CEOs took a reality on their sustainability agenda last year. Today CEO’s might speak less about sustainability, but what they lack in words, they make up for in action.”

He describes this as a "phenomenon we call the ‘do-say’ gap.” 

Bain highlights that this gap is defined by forward-looking leaders turning to AI to accelerate that progress and manage its risks.

Finding value in sustainability 

Bain analysed over 35,000 statements made by 150 leading companies’ CEOs in 2018, 2022 and 2024.

It found that CEOs are moving away from viewing sustainability as something that they should do for compliance and instead viewing it as a value adder.

Key insights in the report include that 26% of companies are leaving suppliers that fall short on sustainability and that leaders capture double the value using AI to solve real sustainability challenges.

Respondents said that today’s progress is not enough, and that businesses must do more to pull the world back within planetary boundaries.

Why focus on climate resilience?

Despite increased decarbonisation, companies still face the consequences of a warming world, predicted by the Climate Action Tracker to increase by 2.5 to 2.9 degrees Celsius warmer by 2100.

A section within the report, The CEO’s Playbook for Climate Resilience, states that only 25% of corporate scope 1 and 2 emissions can be mitigated through levers that are ROI positive today, according to 14 industries in its proprietary Decarbonisation Lever Library.

Over half of the remaining industries have no current pathway to ROI positivity.

Banks already consider climate risk into their policies, and the report recommends that business leaders start doing the same thing.

The impact of not doing so is already visible in rising losses through broken supply chains, straining global trade routes, degrading infrastructure and lost productivity.

By not adapting to climate change, senior leaders also face increased scarcity. Rising temperatures lead to heat-stressed regions losing over 20% in labour productivity, and make it harder to source and price the raw materials vital to industrial growth.

Making climate adaption a business advantage

Bain suggests that executives aren’t blind to these risks.

In its 2024 survey, operations executives ranked ‘increased resilience’ as the second most important priority, with 41% of respondents selecting it as an “extremely important” operations priority in the next three years, just 4% under ‘reducing cost’.

Despite this awareness, the report highlights that only 3% of all climate capital expenditure is directed toward adaptation and resilience, according to data from the Climate Policy Initiative.

To mitigate these challenges, Bain offers several suggestions including:

• Focus on what matters most - tools like AI, geospatial analytics, digital twins and resilience scoring can help companies gain focus on climate risk.
• Design for robustness - maintaining efficiency while building flexibility and investing in adaptation where it matters most.
• Build resilience governance that works - COOs focus on efficiency, whilst CFOs see upfront cost with uncertain return, so leaders must ensure the same efficiency is applied to climate risk.

AI: a vital tool for CEOs

AI can be a vital tool in CEO’s control of sustainability. Bain says that companies use AI to cut energy use, reduce waste, enhance workplace safety, and accelerate toward their sustainability goals.

Of the 400 C-suite and sustainability executives surveyed in eight markets, almost 80% say they see high or very high opportunity for AI to contribute to their sustainability agendas.

This is recognised as good news, but the report also highlights how AI will also bring true environmental costs that should be carefully managed.

For example, AI and data centres could emit 2% of global emissions of carbon dioxide annually by 2035, likely to be the case for the near future before hyperscalers and large data centre operators continue their urgency towards renewable energy.

To translate this into a scenario, the emissions added between 2025 and 2035 would cancel out three years’ worth of emissions cuts by the world’s 500 largest disclosing companies.

Whilst companies are still establishing the role of AI within their companies, Bain names a “small but powerful group” of individuals as “shapers”.

Based on the following four criteria: 

• Their maturity in scaling AI for sustainability
• The breadth of sustainable AI use cases adopted
• The value they report from using AI to advance sustainability
• Their overall maturity in sustainability.

The report explains that it isn’t important who leads in sustainability; it’s who leads in AI.

How important is sustainability in distinguishing tomorrow’s CEOs?

The Visionary CEO’s Guide to Sustainability 2025 states that “with the right visibility, structures, and mindset, CEOs can turn climate adaptation from a cost into a business advantage”.

Jean-Charles says: “Those who act sustainably do so because there are tangible returns.

“The message from this year’s report is clear - sustainability and business ambitions can grow in tandem. And the leaders are those who can cut through the noise, stay focused on their agenda and act consistently.”