Bridging the Gap: How Strategy-aligned Sustainability Drives Shareholder Value

In today’s volatile market, sustainability is no longer just a compliance requirement—it is a strategic lever for driving growth and building resilience. To maximise the value of sustainability actions and investments, organisations must embed sustainability into their core business processes, going beyond mere reporting exercises. So, how does being a sustainable business create value, and what steps can you take to integrate sustainability into your business strategy?

Embedded sustainability as a key driver to unlock strategic value factors

Value factors to which sustainability can relate can be broken down into three categories: value erosion, value retention and value creation.

Value erosion: The hidden cost of inaction and how it threatens your bottom line

In the past, value erosion was often connected to reputational damage or regulatory penalties, however, the real cost runs much deeper. Over time, organisations that do not act, face rising input costs, supply chain disruptions and physical risks from extreme weather. Based on a report made by Bloomberg, the US spending related to climate disasters, insurance premiums, power outages, recovery, uninsured damage, totalled nearly US$1 trillion during Q2 2024 to Q2 2025.

Many organisations already recognise that climate risk is a business risk. Performing climate risk analysis and identifying climate change adaptation strategies is a means for business to gain an edge, specifically improving the resiliency of its supply chain.  A supplier of plants, equipment and production systems found that some of its sites could lose €75 million per year due to asset damage and interruptions from climate hazards over the coming five years. The losses—caused mainly by floods, rising sea levels and tropical cyclones—would increase in the years after. The results led managers to update their adaptation plans and evaluate climate risks when selecting future sites.

Value retention: Sustainability drives efficiency and business relevance

Beyond avoiding costs, sustainable actions and investments could help in retaining your business value through operational efficiency and keeping business relevance. A good example of this would be energy efficiency, waste reduction and employee retention.

Beyond Europe, governments worldwide, including China, Japan, India, and the US, are investing trillions in clean energy initiatives, offering tax credits and incentives that lower technology costs and de-risk capital projects. 

Market participants have begun capturing the opportunity - a global food and beverage organisation recovered about 60% of its current energy costs, nearly US$300 million a year, by upgrading energy-intensive building systems and vehicles, installing onsite solar, using battery systems to help balance the flow of grid power and taking other steps to manage its energy demand.

Value creation: How sustainability elevates strategy  

Each organisation has a unique set of sustainability factors that influence its ability to create value. Determining which sustainability actions or investments carry the most weight involves deliberate study, but the result could lead to new markets, products and services, stronger customer loyalty, and a wider shareholder pool.

Despite regulatory uncertainty, organisations are discovering that sustainability reporting is a strategic advantage: IKEA leverages product lifecycle and material traceability data to power its buyback and resell program, allowing customers to return eligible items for refurbishment in exchange for gift cards. By analysing durability metrics and usage patterns, IKEA selects products that fit the program, promoting circular economy principles while encouraging repeat purchases from customers. PwC’s Global Sustainability Reporting Survey also reveals that most organisations recognise the value of sustainability data and insights derived from CSRD and ISSB reporting, with only 5% of respondents indicating they see no value.

The message is clear: those who dig deeper into their data aren't just meeting requirements; they're unlocking insights that drive smarter decisions. Private equity for instance is increasingly looking for ‘clean’ assets and investors increasingly expect solid sustainability performance. Most, if not all, investors take a critical look at how an organisation deals with sustainability in various dimensions, including regulation, compliance, strategy, impact and operations. Based on our analysis, more than 80% of private equity firms consider sustainability performance is ‘in line with the pursuit of returns’ mainly through market positioning and risk mitigation.

Embedding sustainability into the business strategy

PwC's analysis on CSRD reports revealed that most organisations maintain a sustainability strategy that operates separately from their core business strategy. This causes them to miss out on the growth opportunities and competitive advantages that an integrated approach can deliver. To unlock the three key value factors as described above, organisations must create a direct link between their sustainability ambitions and their business planning and strategy development. Below are actionable steps to help achieve this alignment.

Align strategy with value drivers

The first and most critical step in integrating sustainability into your strategy is identifying the aspects that will deliver the greatest return on investment for your organisation. A practical way to achieve this is by engaging key stakeholders, such as customers, shareholders, and employees—to understand their priorities. By aligning your efforts with these needs, you can focus on areas that create the most value and strengthen both sustainability and business outcomes. 

For instance, a bank might list topics like green products, community investment, biodiversity, and employee well-being in its report. While each holds significance, some topics would have greater contribution to the bank’s competitive edge and value creation. If the bank’s strategy focuses on digital innovation and leadership in products, prioritising data privacy, climate risk in lending portfolios, and financial inclusion could be more aligned with its strategic goals. 

Establish or improve a sustainability governance structure to create accountability at every level

Ensure robust governance structures are in place to support sustainability objectives. Clearly define who is responsible for each sustainability topic or actions at every level of the organisation. Monitor progress continuously through regular management processes such as internal reporting and performance reviews to keep sustainability embedded in business oversight.

Engage your leadership team to establish the necessary level of ambition. Showcase what investment is needed per ambition level and the expected outcomes; this is a critical step for strategic alignment of sustainability and business, as well as helps in creating a buy-in across the organisation.

Develop robust data

Strengthening reporting governance, technology, processes, and controls will prepare you for any reporting and assurance needs, however it is also essential for data-driven insights for performance improvement.

This content was produced by PwC, a member of the Euronext Sustainable Network. Euronext is not responsible for content produced by third parties, including members of the Euronext Sustainable Network, and published on this webpage.