A survey from ERM has revealed a number of barriers to progress on corporate sustainability goals, including a lack of financial incentives tied to sustainability performance within companies, a sustainability engagement gap between the C-suite and managers, and low levels of professional involvement reported by employees working in operations and infrastructure, which are crucial business functions for integrating climate, nature and social goals into business operations.    

The ERM Sustainability Transformation Survey canvassed C-suite and operational managers across industry sectors to examine business progress on operationalizing sustainability goals and strategies, with the aim of identifying ways to overcome the most common barriers to success. 

Top 3 barriers: lack of financial incentives, technology, and regulation  

Respondents point to the lack of financial incentives for leadership and employees linked to sustainability performance as the most significant barrier to progress on sustainability. Cited by nearly half (48%) of C-suite leaders and managers, this barrier is followed by technology that is too expensive or unavailable (cited by 43%) and a lack of forceful regulations (cited by 41%).  

C-suite leaders are more optimistic than managers 

Overall, C-suite executives are more positive about the sustainability performance of their organizations versus managers, with 56% reporting that their company is making significant progress compared with 48% of managers. They are also more likely than managers to report high levels of professional involvement in sustainability efforts at their companies (61% vs. 45%). However, managers are more likely to identify the lack of integration of sustainability goals into operational plans as a significant barrier compared with C-suite respondents (37% vs. 28%).  

Critical business functions are not engaged 

Only 42% of respondents working in operations and infrastructure functions reported significant involvement in corporate sustainability efforts and just 44% believe that their company is making significant progress. This makes them the least engaged business functions, despite being among the most important to sustainability integration. Respondents in marketing and communication were a close second, with engagement and progress scores of 44% and 47%.  

Companies see more progress on equity & social issues versus climate and nature  

Executives believe their companies are making the most progress on equity & social issues, with 57% rating their company’s progress in this area as high, while corporate progress on climate (47%) and nature (45%) receive lower scores. Only 42% of finance sector professionals pointed to high progress levels overall across climate, nature and equity & social issues at their companies, while the majority of mining sector respondents (79%) gave their companies high progress scores overall. 

Top 3 solutions: training, financial incentives and operational integration 

Among all respondents, the most highly rated solutions to speed up sustainability progress include better staff training (cited by 72% of respondents), alongside sustainability-linked financial incentives and operational integration of sustainability goals (both cited by 71%). However, respondents also observe that better training and financial incentives are solutions their companies underutilize the most. 

Practical solutions for unlocking progress 

Informed by these findings, ERM recommends that companies introduce financial incentives that make up a substantial portion of total compensation for both C-suite and operational managers and are tied to short-term and long-term sustainability performance. To support training needs, companies should consider bespoke leadership programs that bring in external experts as mentors, based on an assessment of sustainability-related competence and awareness gaps, while operational managers would benefit from continuous training tailored to functional needs that helps to develop both engagement and skills. 

The report also recommends that companies equip managers with the tools they need to embed sustainability goals into business operations by putting in place an ecosystem of specific targets, detailed data and hands-on monitoring solutions. In addition, engagement from managers could be enhanced by cross-functional collaboration and by translating the growing body of sustainability standards and frameworks into clear language that operational managers can understand and implement.  

Sabine Hoefnagel, Global Leader of Sustainability and Risk at ERM said: “The sustainability transformation is accelerating, and companies have responded with ambitious goals and roadmaps. Yet the integration of sustainability goals into business plans and operations is not moving fast enough for companies to effectively navigate this transition and seize its commercial potential.  

“It’s critical that companies tackle some of the barriers to sustainability progress and find ways to bring their employees along on the journey. From setting out clear financial incentives tied to sustainability performance to equipping managers with the tools to embed sustainability goals within their business operations, practical solutions are within reach.  

“In the long term, those companies that embrace the challenge and find ways to accelerate progress on sustainability within their operations will be well-positioned to reap the rewards of enhanced commercial opportunities and business resilience.” 

Notes to editors 

ERM, in collaboration with market research agency Kadence, surveyed 1,475 global respondents, including 390 C-suite and board members and 1,085 managers across functions and company sizes. Respondents were based in five regions: Europe, North America, South America, Asia-Pacific, and Africa/Middle East.  

About ERM 

Sustainability is our business. 

As the world’s largest specialist sustainability consultancy, ERM partners with clients to operationalize sustainability at pace and scale, deploying a unique combination of strategic transformation and technical delivery capabilities. This approach helps clients to accelerate the integration of sustainability at every level of their business. 

With more than 50 years of experience, ERM’s diverse team of 8000+ experts in 40 countries and territories helps clients create innovative solutions to their sustainability challenges, unlocking commercial opportunities that meet the needs of today while preserving opportunity for future generations.  Learn more here.