How industrial companies can reignite sustainability performance

As progress on sustainability slows, industrial companies need a redesigned model that empowers teams to drive impact, not just compliance.

In brief

• Industrial sustainability has stalled as focus on compliance-driven reporting disrupts purpose and progress.
• Restoring momentum requires a new operating model built on strategic placement, shared ownership, strong leadership and broader technical capabilities.

For most of its history, corporate sustainability was anchored in purpose.

It brought leaders together to confront social and environmental challenges and to pursue solutions with meaningful impact and enterprise value. By the late 2010s, that purpose translated into real momentum: investor enthusiasm rose as investors saw new solutions to old problems using sustainability, advocacy from sustainability leaders reshaped expectations across industries, annual sustainability reporting became standard practice, and frameworks such as the Global Reporting Initiative (GRI) and the Sustainability Accounting Standards Board (SASB) spread quickly. For a moment, it appeared that a blueprint for system‑level change had taken shape.

Positioning sustainability for maximum impact

Integrate sustainability with strategic decision‑makers

Leaders should start by reassessing whether sustainability is positioned to influence the company’s most business‑critical strategic issues. In industrial organizations, many of those issues lie in operations and downstream — in how products are used by customers and across the broader value chain. When sustainability is placed too far upstream or buried in compliance‑oriented functions, it loses the ability to shape the company’s direction and strategic decisions. Positioning the sustainability organization closer to commercial leadership, such as the chief innovation officer or head of corporate strategy, gives it meaningful influence over operations, innovation and long‑term competitiveness. The extent to which sustainability is elevated in the organization often reflects strategic clarity among leaders regarding the manner and extent to which sustainability brings value to key stakeholders, such as investors or customers. Last, recognize that the function in which sustainability resides brings bias: an innovation officer owning sustainability will likely result in less focus on sustainability in operations, for example.

Build enterprise‑wide ownership for sustainability

Sustainability achieves its greatest impact when ownership is shared across the organization. In industrial companies, where impact often comes from operations and product use, progress can stall when finance, HR, procurement, commercial teams and other functions are left out. For example, achieving sustainability targets often requires significant capital expenditures, making the finance organization, particularly financial planning and analysis, a critical partner. Across many organizations, the informal “dotted‑line” relationships that once linked sustainability to these functions have eroded as reporting demands intensified. Without those cross‑business ties, sustainability teams are left isolated and unable to influence the operational, commercial and financial decisions that ultimately determine outcomes. Reversing this trend requires rebuilding shared ownership across the business and re‑establishing clear responsibilities for each team that contributes to sustainability outcomes. As outlined in the EY Sustainable Operating Blueprint, the dual facets of establishing strategic clarity on sustainability within the organization as well as embedding sustainability in operations are key to making companies sustainable.

Elevate sustainability oversight and leadership

The same reset is needed at the leadership and governance level. High‑performing sustainability organizations benefit from active sponsorship by influential executives and clear accountability across senior leadership. In many companies, the sustainability governance structures originally established by senior executives or cross‑functional committees were created with strong intent, but gradually weakened as reporting demands grew. Over time, these groups became procedural rather than strategic — meeting out of obligation rather than purpose and lacking the authority needed to guide decisions. Reinvigorating sustainability governance requires strategic clarity: why are we here and what is our purpose? Companies should clarify the specific decisions these groups are responsible for, review existing governance structures, refresh charters and define expectations for executive participation. For example, one company’s steering committee meets two to three times a year to make strategic decisions, approve annual plans, review progress toward goals and provide feedback and support for next steps.

Expand sustainability capabilities

Even with the right structure and governance, organizations cannot deliver meaningful impact if their sustainability capabilities remain concentrated solely in regulatory reporting. Years of disclosure requirements have shaped hiring and training around compliance, leaving many teams strong on reporting but lacking the technical and commercial skills needed to drive performance. This gap is especially limiting for industrial companies, where progress relies on skills such as financial modeling, decarbonization planning, climate risk, operational excellence, sustainable supply chain and green‑finance tools, as well as expertise in product innovation and manufacturing technology — areas that shape sustainability outcomes across design, materials, operations and downstream use.

Industrial companies should take a two‑pronged approach to build these capabilities:

1. Invest in continuous learning beyond reporting.
   Partner with talent development to provide high‑quality external training across finance, engineering‑adjacent topics, climate science, supply chain and product innovation for sustainability teams. For many industrial organizations that cannot hire specialist talent, upskilling existing staff is essential to broadening contribution and accelerating results.
2. Hire for diverse skill sets, not only reporting knowledge
   Avoid narrowing job requirements to compliance and reporting. Seek candidates with backgrounds in engineering, product design, operations, supply chain or corporate finance and integrate these skills into the sustainability model to expand problem‑solving capacity and avoid reinforcing a reporting‑centric profile.

Expanding skill sets and diversifying talent shifts sustainability from a reporting obligation to a performance‑driving capability, one positioned to shape products, operations investments, customer outcomes and long‑term competitiveness.

Putting it into practice

• Position sustainability within commercially oriented leadership (for example, strategy, innovation, product) so it can influence operations, resiliency and customer value creation.
• Rebuild shared ownership across finance, HR, procurement, operations and commercial teams, verifying sustainability is embedded in the decisions and investments that determine outcomes.
• Strengthen governance by clarifying decision rights, refreshing charters and confirming influential executives actively sponsor sustainability and hold the organization accountable.
• Invest in upskilling and hire for diverse technical and commercial knowledge so sustainability teams have the skills required to drive performance.

Done together, these steps reconnect sustainability’s purpose to performance and restore momentum where it matters most for industrial companies.

Emmett Burns also contributed to this article.