How Can Organizations Best Establish Sustainability? 

Talk to executives about sustainability, and you will hear the same frustrations repeated across boardrooms worldwide. 

The dedicated team exists, the annual report gets published, and the targets get announced with appropriate fanfare, yet somehow sustainability remains a parallel track to the actual business, a series of initiatives disconnected from how decisions get made and how value gets created. 

The problem is that most organizations approach sustainability as something bolted onto existing operations rather than woven into the fabric of how the company runs. 

What “Establishing” Sustainability Means

EY’s May 2025 Europe Long-Term Value and Corporate Governance Survey found that 55% of European companies keep their sustainability strategy completely separate from their business, while only 5% have achieved full integration. The irony is that companies treating sustainability as a side project are ignoring years of evidence showing that integration pays off. Companies that embed sustainability into their overall business strategy are 40% more confident in their business outlook and have boards that are 1.5 times more effective at achieving sustainability objectives. 

This pattern appears in research going back over a decade. A Harvard Business School study led by Eccles, Ioannou, and Serafeim tracked 180 companies over 18 years and found that organizations embedding sustainability early developed board accountability, incentive links, stakeholder engagement routines, and longer planning horizons. These companies outperformed their counterparts over the long term in both stock market and accounting measures. 

The researchers also identified something that most corporate sustainability programs miss true integration happens across multiple organizational dimensions simultaneously. Building a sustainability department or publishing an annual report does not count. The companies that succeeded built sustainability into strategy, governance, measurement, and decision systems so thoroughly that it became inseparable from ordinary business operations. 

Deloitte’s research reinforces this finding. Their interviews with sustainability experts revealed that organizations move faster on disclosure than on deeper integration into strategy, operations, and culture. In other words, most companies check the reporting box while the actual decision-making machinery remains untouched. 

The Building Blocks That Make Sustainability Stick

Research and practice have converged on several building blocks that separate performative sustainability from the embedded variety. 

Governance with Clear Accountability

Governance with clear accountability stands at the foundation. The Harvard study found that high sustainability companies assign sustainability responsibility at board level, often through dedicated committees, and integrate sustainability into executive oversight. This is not about adding another item to the board agenda. It means sustainability receives the same scrutiny, the same questioning, and the same accountability as financial performance. 

Boards and management teams often see the situation differently. In the EY 2025 survey, 82% of board members said their sustainability strategies are completely standalone, but only 26% of senior leaders agreed. When the people running the company cannot even agree on where they stand, progress becomes nearly impossible. You cannot fix what you cannot agree is broken. Best practice involves creating a cross functional sustainability steering committee that brings together the CFO, COO, CHRO, Chief Procurement Officer, and heads of risk and product. This structure prevents sustainability from becoming siloed in a corner office where it can be safely ignored by the people making consequential decisions. 

Strategy Anchored in Materiality

Strategy anchored in materiality also prevents sustainability from drifting toward whatever sounds impressive in a press release. Academic research warns that sustainability actions can become commoditized through imitation. Differentiation thus comes from actions tied to strategic novelty and real stakeholder value, not from copying what competitors announce. 

Additionally, organizations should run a double materiality process examining both impact and financial risk, then convert findings into a small set of commitments with explicit value drivers. As Yvonne Gillet, Group Vice President Sustainability at Syntegon, puts it: “Double materiality is not just a reporting requirement. It forces you to look at where your business creates risk and where it creates opportunity, and those are not always the same places.” Gillet also stresses the need to stay ahead of the regulatory curve: “You have to build regulatory intelligence into your planning. If you wait until requirements land, you are always reacting. The organizations that look ahead and adjust early are the ones that turn regulation into a business advantage.” A company committing to low carbon portfolios, circular design, or supply chain living wages should articulate exactly how these connect to growth, cost, risk, and talent. 

Incentives That Change Behavior

On the other hand, incentives that change behavior remain perhaps the most underused tool in the sustainability toolkit. BCG analyzed nearly 100 large corporations with ESG incentive schemes and found that many fail due to generic KPIs, qualitative measures, short timelines, low weighting, and coverage limited to top executives. Over 77% of S&P 500 companies currently incorporate ESG performance into executive compensation, yet most are doing it badly. This is checkbox sustainability applied to compensation: companies can claim they link pay to ESG without designing incentives that actually change anyone’s behavior. 

BCG recommends that sustainability incentives represent more than 20% of the variable compensation element. Function specific KPIs work better than generic corporate measures: procurement leaders measured on supplier emissions, operations leaders on energy intensity, and product leaders on lifecycle footprint. The targets need multiyear horizons, and the incentives must extend beyond the C suite to the decision owners at plant and category level who control actual outcomes. 

Operating Model Integration

Operating model integration also embeds sustainability into the processes where decisions actually happen: annual planning, capital expenditure approval, product roadmaps, procurement sourcing, enterprise risk management, and pricing. 

Scott Childress, Chief Sustainability Officer at UPS, describes what this looks like on the ground: “Operationalizing sustainability is a major focus for my team, and the most effective approach has been embedding it directly into the KPIs and tools our operators already use every day.” His team worked with UPS IT and Engineering to build daily tracking of alternative vehicle deployment. “Now each operating center can look at its fleet and deploy the lowest emission option for any given day. It is built into the workflow, not bolted on as an afterthought,” he explains. 

The Conference Board’s 2025 research found that integration is currently most advanced in legal, procurement, operations, and communications functions but remains limited in finance, HR, investor relations, and R&D. This is exactly backwards. Finance decides how capital gets allocated. HR shapes the workforce. R&D determines what products get built. If sustainability is absent from those conversations, it is absent from the future of the business. Organizations should establish “sustainability by design” gates requiring every major investment or product launch to document lifecycle impacts, compliance requirements, and reduction pathways. Gillet raises a question that too few product teams are asking: “When we develop new products, we always ask: how does this help our clients? Sometimes that means helping them meet their own sustainability targets. Sometimes it means the product is simply better because sustainability shaped how we built it.” 

Measurement and Data That Leaders Trust

Measurement and data that leaders trust determine whether sustainability becomes a managed priority or a public relations exercise. The Harvard research showed that high sustainability companies measure more stakeholder related information and improve credibility through auditing and assurance. However, unfortunately MIT Sloan’s Aggregate Confusion Project also found that ESG ratings from six prominent agencies correlate at only 0.54 on average, compared to 0.92 for credit ratings from Moody’s and S&P. When the same company receives wildly different scores depending on who is measuring, executives lose confidence in the numbers. 

As Childress puts it: “If you cannot track it, you cannot manage it, and if you cannot manage it, you certainly cannot improve it. Getting the measurement right is what turns sustainability from a talking point into an operational discipline.” Thus, the solution involves building a governed ESG data model with clear owners, lineage documentation, and controls comparable to financial data. Start with a few metrics covering scope emissions, energy consumption, waste, injury rates, and supplier compliance before expanding. 

Capability Building and Culture Change

Capability building and culture change addresses what the Cambridge Institute for Sustainability Leadership identifies as the hardest part of the entire endeavor: embedding sustainability into how people work. Many companies believe that hiring a Chief ESG Officer or a Chief Sustainability Officer solves the problem. It does not. If the rest of the organization lacks the vocabulary, frameworks, and skills to think about environmental and social issues, the CESGO or CSO becomes a lonely voice producing reports that nobody acts on. 

Gillet puts it bluntly: “Sustainability needs to become like finance. Nobody questions whether a business leader should understand their P&L. The same should be true for sustainability KPIs. Until every function speaks that language, it will always be someone else’s problem.” 

As a result, leaders need training in systems thinking and trade off management. Organizations benefit from creating sustainability translators who can close the gap between finance, engineering, and procurement to connect technical decisions with business outcomes. Gillet also points to something many organizations miss: “People forget that sustainability includes resilience. We work with our insurers to mitigate risks, and we pay close attention to things like absenteeism, which costs companies enormous amounts of money. When you invest in employee wellbeing as part of your sustainability agenda, the returns show up across the entire business.” 

Value Chain Engagement

Value chain engagement also extends sustainability beyond organizational boundaries. For most companies, the majority of their carbon footprint sits in their supply chain rather than their own operations. Ignoring suppliers means ignoring the bulk of the problem. High sustainability companies establish formal stakeholder engagement processes with reporting and board feedback loops. Supplier programs should combine requirements with enablement through training, tools, co-investment, and preferred status incentives. 

The Business Case Is Settled

The EY 2025 survey quantified what the business case looks like for companies that have already begun integrating sustainability: 69% report better impact on broader society, 68% see improved employee recruitment and retention, 63% enjoy more positive brand perception, and 43% experience better product and service innovation. The talent finding matters more than it might appear. Younger workers increasingly choose employers based on values, and companies that treat sustainability as window dressing are losing candidates to competitors who take it seriously. Additionally, 91% of companies now feel pressure from investors to accelerate sustainable business practices. 

As Kai Andrejewski, former CFO of Sixt, told EY researchers: “The companies that will bridge the gap between what is entrepreneurially possible and what is environmentally needed and responsible will be the companies that are most successful.” 

Avoiding the Common Failure Modes

Organizations stumble repeatedly over the same obstacles. 

• Sustainability remains a side function when it should be embedded in governance and operations. The CSO sits three levels removed from the CEO, reports into communications or legal, and lacks the authority or budget to influence how the business actually runs. 
• Companies track too many KPIs without any being decision grade. Dashboards proliferate with dozens of metrics that nobody uses to make actual choices. When everything is measured, nothing is prioritized. 
• Incentives stay generic when they should be function specific and meaningful in weight. A corporate wide “sustainability modifier” worth 5% of bonus does not change how a plant manager thinks about energy consumption or how a procurement director evaluates suppliers. 
• No one invests in capability building. The assumption persists that sustainability is a specialized function rather than a general management competency. Business unit leaders lack the frameworks to assess trade offs between cost, speed, and environmental impact.
• Reporting takes priority over action, generating impressive disclosures while core operations remain unchanged. The sustainability report becomes the deliverable rather than the byproduct of progress. 

The organizations that avoid these pitfalls treat sustainability not as a program to be managed but as a dimension of how the business operates. They recognize that embedding sustainability requires the same commitment, resources, and leadership attention that any other business priority demands. 

Finding the Leaders Who Can Make It Happen

Embedding sustainability into an organization requires leaders who understand both the technical dimensions of ESG and the operational realities of running a business. Chief Sustainability Officers and ESG Directors need credibility with the board, fluency in financial language, and the political skills to work across functions that have historically operated in silos.

At Stanton Chase, we help organizations identify and assess executive talent with the experience and capabilities to lead sustainability from a position of strategic influence rather than peripheral compliance. Our global offices can connect you with candidates who have delivered measurable results in similar contexts.  

About the Interviewees

Yvonne Gillet is Group Vice President Sustainability at Syntegon, a global technology company serving the pharmaceutical, biotech, and food industries. She oversees the company’s sustainability strategy across environmental stewardship, social responsibility, and governance, including compliance with the German Supply Chain Act and preparation for the EU’s Corporate Sustainability Reporting Directive. Under her leadership, Syntegon earned the EcoVadis Platinum rating in 2025, placing it in the top 1% of over 150,000 companies evaluated worldwide. 

Scott Childress is Chief Sustainability Officer at UPS, where he leads the company’s global sustainability team and strategy across three priorities: decarbonizing UPS’s global networks, building sustainability products that support customers and growth, and managing compliance with climate disclosure requirements worldwide. Before taking on the CSO role in 2023, Childress spent nearly two decades at UPS in senior finance positions including Investor Relations Officer, CFO of the Americas Region, and Operations CFO for Europe. He also serves as CFO of UPS Network of the Future. 

About the Author

Christian Ehl is a Partner at Stanton Chase Düsseldorf and serves as the Global Functional Leader for Sustainability and ESG. Since 2004, he has worked extensively with international corporations and medium-sized businesses, specializing in executive search for sustainability, ESG, and financial leadership roles. His expertise in sustainability began with his thesis on Corporate Social Responsibility, and he has since built extensive knowledge and a strong network in this field. Christian holds a degree in International Business Administration from Accadis Business School and completed his coaching certification in systemic and change coaching in 2008.