Sustainability at a Crossroads: Is the Golden Age Really Over?

Sustainability has long been a driving force behind corporate strategy, shaping regulations, investment flows, and consumer expectations. But in today’s shifting economic and political landscape, a critical question arises: Is the golden age of sustainability coming to an end?

The past decade saw unprecedented progress in corporate sustainability commitments, from ambitious carbon neutrality pledges to the rise of ESG-driven investments. However, recent trends suggest a slowdown. Political backtracking on climate policies, regulatory uncertainty, and short-term economic pressures have led some businesses to scale back their commitments, particularly in industries where sustainability initiatives are perceived as costly or complex to implement.

Yet, the reality is far more nuanced. While some companies retreat, others are doubling down on sustainability, recognizing it as a strategic necessity rather than a regulatory burden. Investors, consumers, and employees continue to demand greater accountability and transparency, pushing organizations to embed sustainability into their core business models.

So, is sustainability truly losing momentum, or are we at an inflection point where corporate leaders must redefine the way forward? During a recent masterclass co-hosted by HEC Paris Executive Education and the Stockholm School of Economics, industry experts and alumni of the Strategizing Sustainable Business Transformation program tackled this pressing question. Their insights reveal a transforming corporate landscape, where sustainability is no longer just about compliance—it is about business resilience, innovation, and long-term growth.

The debate: Is sustainability losing momentum?

While businesses have made significant strides in embedding environmental and social responsibility into their strategies, recent economic and political shifts are raising doubts about the long-term trajectory of sustainable business practices.

The rise and stall of corporate sustainability

For years, regulatory frameworks have evolved to push companies toward greater transparency and accountability, while consumers and employees increasingly demand responsible business practices. However, despite this momentum, recent global challenges have cast a shadow of uncertainty over the future of corporate sustainability.

Geopolitical tensions, economic instability, and regulatory backtracking have led some to question whether the golden age of sustainability is fading. In the United States, the potential rollback of climate commitments – marked by discussions of a U.S. withdrawal from the Paris Agreement – raises concerns about global climate leadership. Meanwhile, in Europe, proposed revisions to the Corporate Sustainability Reporting Directive (CSRD) signal a shift in regulatory priorities, with some policymakers arguing for a simplification of sustainability reporting requirements to reduce the burden on businesses.

These developments highlight a paradox: while the urgency of sustainability challenges (climate change, biodiversity loss, and social inequality) has never been greater, political and economic realities are creating headwinds for corporate action. The question is no longer whether sustainability is necessary, but rather how businesses can maintain their commitments in an increasingly complex landscape.

Business pressure points: A mixed landscape

According to Lin Lerpold, Associate Professor at the Stockholm School of Economics, the challenge lies in reconciling economic growth with environmental and social responsibility. 

'We know that economic growth has historically been linked to rising CO₂ emissions and resource consumption. The question is not whether businesses should pursue sustainability, but how they can do so while maintaining financial viability', she explains.

This tension is particularly evident in industries with high carbon footprints, where short-term profitability pressures often conflict with long-term sustainability goals. Some oil and gas companies, for instance, have backtracked on clean energy investments, citing economic uncertainty and shifting shareholder expectations. Similarly, certain agribusiness giants have resisted regulatory changes aimed at reducing deforestation and improving supply chain transparency.

Yet, despite these challenges, regulatory frameworks continue to evolve, ensuring that sustainability remains an integral part of corporate strategy. The EU’s double materiality approach, for example, requires companies to assess not only how environmental and social factors impact their financial performance but also how their operations affect society at large. This shift, from a purely financial materiality perspective to a broader sustainability lens, is reinforcing the need for businesses to take a more holistic approach.

Moreover, investor expectations are shaping corporate behavior. Institutional investors and asset managers increasingly use ESG criteria to assess risk and opportunity, influencing capital allocation across industries. Companies that proactively integrate sustainability into their strategy are often better positioned to attract investment and secure long-term resilience.

Sustainability in action: Lessons from business leaders

While regulatory shifts and economic uncertainties may create friction, sustainability remains a priority for forward-thinking companies. Organizations that see beyond short-term volatility and invest in sustainability as a strategic asset are positioning themselves for long-term success. Two alumni from the Strategizing Sustainable Business Transformation program at HEC Paris share how they are leading change within their industries.

Joanna Daugaard (DeLaval): Transforming an industry with long-term vision

As a Business Development Manager at DeLaval, Joanna Daugaard operates in an industry where sustainability is both a challenge and an opportunity. DeLaval, a global leader in dairy farming solutions, faces increasing scrutiny from regulators, consumers, and investors who demand more environmentally responsible practices. With growing concerns over carbon emissions, water usage, and biodiversity, dairy farmers must adapt to new sustainability standards, yet many struggle with limited resources and expertise.

Recognizing this challenge, Johanna led the creation of the Milk Sustainability Center, a pioneering initiative developed in partnership with John Deere. This industry-wide data-driven network helps dairy farmers access sustainability insights, measure their environmental impact, and implement best practices. Unlike previous efforts focused solely on individual farms, this initiative leverages collaboration across the dairy supply chain to drive systemic change.

One of the boldest aspects of the project was its financial outlook. Joanna recalls presenting the business case to DeLaval’s board, acknowledging that the initiative would not generate direct profitability for at least 10 years. Despite the absence of short-term returns, DeLaval’s leadership recognized the long-term value of sustainability – not just as a compliance requirement but as a strategic differentiator. Their commitment to the project highlights a growing shift in corporate mindset, where sustainability is seen as essential for resilience and future-proofing.

Joanna credits her experience in the HEC Paris Executive Education program with giving her the strategic framework needed to align sustainability initiatives with business imperatives.

 'The program broadened my perspective on sustainable business transformation. It equipped me with the tools to navigate complexity, balance competing priorities, and build a compelling case for sustainability within my organization', she explains.

Guillaume Dubois (Imperial Brands): Investor-driven sustainability in a controversial industry

Sustainability might seem like an unlikely priority in the tobacco and nicotine industry, but for Guillaume Dubois, Sales and Marketing Director at Imperial Brands, it has become a core strategic focus. Traditionally, tobacco companies have faced intense regulatory scrutiny regarding health and environmental impacts, but until recently, sustainability was not at the forefront of corporate decision-making in the sector. That is now changing, driven not by legislation alone, but by investor expectations.

Imperial Brands, one of the world’s leading nicotine product companies, has undergone a significant transformation in its approach to sustainability. Just five years ago, sustainability concerns were peripheral to the company’s strategy. Today, investor pressure has made ESG (Environmental, Social, and Governance) performance a critical business issue. “Our investors (pension funds, banks, and insurance companies) are demanding clear sustainability commitments”, explains Guillaume. “They don’t just expect profitability, they want long-term responsibility and transparency.”

In response, Imperial Brands has developed a comprehensive sustainability strategy, structured around three key pillars:
●    Climate action: Reducing carbon emissions and improving water and resource management across operations.
●    Farmers’ livelihoods: Ensuring ethical sourcing, improving working conditions, and tracking the sustainability of agricultural supply chains.
●    Employee well-being and community impact: Enhancing workplace safety, diversity, and corporate responsibility programs.

One of the most tangible outcomes of this shift has been the creation of a Sustainability Manager role for the African market, a position that Guillaume helped define and secure within the company. This new role focuses on integrating ESG principles into regional operations, ensuring that sustainability is not just a corporate-level discussion but a reality on the ground.

Guillaume credits HEC Paris’ Strategizing Sustainable Business Transformation program with providing him the strategic insight and business case arguments necessary to drive this change. 

'The program helped me frame sustainability as a business opportunity rather than a constraint. It also reinforced the importance of a long-term vision, especially in an industry like ours where change happens gradually', he reflects.

Beyond equipping him with practical frameworks, the program’s academic prestige also played a key role in advancing his career. “The dual recognition of HEC Paris and the Stockholm School of Economics adds credibility. It’s a powerful signal in the business world, demonstrating both expertise and commitment to sustainable leadership.”

The future of corporate sustainability: an inflection point

Despite the uncertainty, leading organizations recognize that sustainability is no longer a choice, it is a business necessity.

Beyond compliance: the need for bold leadership

Sustainability is no longer just about compliance : it is about business resilience, competitive advantage, and long-term viability. As Bénédicte Faivre-Tavignot, Associate Professor at HEC Paris, explains: 

The pressure from civil society, employees, and investors remains strong. The companies that lead today will define the sustainable business models of tomorrow.

This leadership imperative is driving businesses to go beyond regulatory requirements and proactively embed sustainability into their corporate strategy, operations, and value chains.

Case studies from the HEC Paris program illustrate how companies across industries are transforming their approach:

●    Finance: Banks and investment firms are incorporating ESG criteria into risk management, steering capital toward sustainable assets and low-carbon industries.
●    Manufacturing: Companies are integrating circular economy principles, reducing waste, and transitioning to renewable energy sources.
●    Retail and Consumer Goods: Brands are rethinking supply chains, prioritizing ethical sourcing, and adopting regenerative business models.
●    Tech and Digital: AI and data analytics are being leveraged to optimize sustainability efforts, from carbon tracking to energy efficiency.

The shift toward low-carbon, inclusive growth strategies is reshaping corporate decision-making and market expectations.

Building the next generation of sustainability leaders

As sustainability becomes an integral part of corporate strategy, the need for leaders who can drive meaningful change has never been greater. Companies require professionals who not only understand sustainability challenges but can also translate them into actionable business strategies that balance financial performance, regulatory compliance, and societal impact.

The Strategizing Sustainable Business Transformation program, jointly led by HEC Paris and the Stockholm School of Economics, is designed to equip executives and decision-makers with the strategic tools needed to navigate this evolving landscape.

Participants in the program gain a deep understanding of key sustainability levers, including:

●    Sustainable finance: How capital markets, investors, and financial institutions shape corporate sustainability strategies.
●    Corporate governance: The role of boards, leadership teams, and regulatory bodies in embedding sustainability into business decision-making.
●    Circular business models: Rethinking value creation through resource efficiency, waste reduction, and regenerative strategies.
●    Emerging regulatory frameworks: Adapting to evolving policies such as the EU’s Corporate Sustainability Reporting Directive (CSRD) and double materiality assessments.

Unlike traditional executive education programs, this course combines academic excellence with real-world business insights. Participants engage in interactive case studies, expert-led discussions, and industry-specific applications, ensuring that learning is immediately actionable within their organizations.

By fostering a global community of sustainability leaders, HEC Paris and SSE are helping businesses move beyond compliance and toward transformational leadership. Whether in finance, manufacturing, technology, or consumer goods, alumni of the program are proving that sustainability is not just a challenge, but an opportunity to redefine business success.

Join the next generation of sustainability leaders, and discover how the Strategizing Sustainable Business Transformation program can help you drive meaningful change in your organization and beyond.

Next intake: May 2025

Learn more and apply here: Strategizing Sustainable Business Transformation