CEOs shift focus from sustainability to AI, inflation, shows survey

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Corporate leaders are increasingly prioritising artificial intelligence (AI), inflation, and geopolitical uncertainty over sustainability, according to new research from Bain & Company.

The study signals a sharp decline in CEOs’ focus on climate commitments, with many companies reassessing or scaling back their sustainability goals.

Despite this shift, the financial risks of ignoring climate change remain substantial. Bain estimates that a global temperature rise of 2°C could wipe $6tn from the S&P 500, in addition to causing severe environmental and social consequences.

Still, many companies are falling behind on emissions reduction targets, with 30 per cent lagging on Scope 1 and 2 commitments, and nearly half behind on Scope 3.

“The transition to a sustainable world is following a familiar cycle,” said Jean-Charles van den Branden, Bain’s global sustainability practice leader. “What started with enthusiasm has now faced pragmatic realism, as the challenges of meeting bold commitments become clear. Yet, slowing progress would be a mistake. Forward-thinking companies will lead the way by harnessing new technologies and smart policy to unlock opportunities.”

Consumers’ concerns still focused on climate change, report shows

Bain’s survey of 19,000 consumers across 10 countries revealed that 61 per cent are more concerned about climate change than two years ago, often due to personal experiences with extreme weather events.

This concern is highest in countries like Brazil, Indonesia, and Italy, which have recently faced severe weather. The study also found that 76 per cent of global consumers believe their actions have a direct impact on sustainability.

“As extreme weather becomes more frequent, consumers are feeling the effects firsthand,” said Akram Alami, head of Bain’s Middle East Sustainability practice. “This shift in awareness is reshaping markets. Sustainability is now a crucial factor for long-term success, and businesses that fail to integrate it into their strategies risk losing their competitive edge.”

When it comes to sustainable shopping, 35 per cent of consumers cite media coverage, and 28 per cent credit brand awareness campaigns for driving their decision to buy eco-friendly products.

Bain advises consumer companies to treat sustainability as a critical factor and build partnerships across the value chain to improve access to sustainable products.

Sustainability is also a top concern for corporate buyers, with 36 per cent of B2B customers stating they would abandon suppliers that fail to meet sustainability standards. This figure is expected to rise to nearly 60 per cent in the next three years, according to Bain’s research. Moreover, half of the surveyed buyers said they would currently pay a premium of at least 5 per cent for sustainable products.

However, a significant gap exists between suppliers and buyers. While 85 per cent of suppliers claim to incorporate some degree of sustainability into their offerings, only 27 per cent said they fully understand their customers’ sustainability needs.

AI’s role in boosting sustainability

Bain suggests that AI could play a key role in bridging the gap between companies and sustainability. AI can enhance companies’ ability to communicate effectively about sustainable products and solutions, while simultaneously helping businesses innovate and drive resilience.

As businesses recalibrate their sustainability efforts, Bain’s findings highlight the importance of balancing emerging technologies with long-term environmental responsibility.