The sustainability functions generating the most business value are not the ones most focused on regulatory compliance. Compliance has become the floor — the baseline expectation that any serious organisation must meet to maintain access to capital, markets, and regulatory approval. What separates leading sustainability functions from the rest is a set of capabilities that begin where compliance ends: the ability to connect sustainability outcomes to financial performance, build the internal coalition to act on that connection, and navigate the growing tension between short-term investor expectations and long-term value creation.
The evidence is growing. EY’s 2025 Nordic Sustainability Survey found that 94% of respondents cited C-suite commitment or support from other leaders as among the top three most important enablers of integrated sustainability strategy — with 53% identifying it as the single most important factor. At the same time, 50% identified unclear or difficult-to-measure ROI as one of their biggest challenges. These two findings sit alongside each other in a revealing way: leadership commitment is essential, but without a credible framework for demonstrating financial returns, that commitment is difficult to sustain when priorities compete. The organisations navigating this gap most effectively are those that have built a close working relationship between the chief sustainability officer, the chief financial officer, and the head of strategy — what the research describes as an essential trinity.
The structural change this represents is not cosmetic. As CFOs take on greater responsibility for sustainability reporting, steering, and assurance under CSRD and ISSB disclosure requirements, the CSO’s role evolves: from compliance owner to value orchestrator. That shift requires CSOs to develop a different kind of fluency — not just familiarity with ESRS or ISSB standards, but the ability to translate sustainability data into the language of capital allocation, risk-adjusted return, and long-term enterprise value. The 53% of senior sustainability leaders who report directly to the CEO are in a structurally better position to build that fluency; the 44% who are two reporting steps from the CEO face a steeper challenge.
A parallel analysis from Reuters this week points to a deeper structural challenge: a crisis of agency. Across sectors, sustainability leaders are acutely aware of systemic risks and want to act — but many feel constrained by market conditions, investor timelines, and the boundaries of what a single organisation can achieve. The most effective response is not to accept those constraints, but to understand precisely where they sit: whether in market design, regulatory gaps, coalitions that have not yet formed, or business model assumptions that are overdue for disruption. Effective leadership in this context requires building organisational resilience, not just compliance infrastructure.
For companies now operating under CSRD’s mandatory requirements, the compliance moment has arrived. But the strategic question worth asking in parallel is whether the function that produces the sustainability report is also positioned to use that data to inform capital allocation, procurement, product design, and investor narrative. The organisations that manage to do both — meet the regulatory standard and generate business value from the process — are the ones that will find, over time, that sustainability is not a cost centre. That is the ceiling that compliance, on its own, cannot reach.
Sources: How sustainability is shifting from compliance to business value — EY The crisis of agency in sustainability leadership — Reuters