Sustainability is increasingly central to business strategy, yet misunderstandings persist at the top of the corporate ladder. Too often, complex topics are reduced to soundbites that oversimplify risks, mask opportunities, or stall meaningful progress. Good intentions often collide with bad assumptions, and fatigue sets in.
This is a good time to take a moment to clear the air and bust five of the most common myths about sustainability that we might encounter in boardrooms, classrooms, or news headlines. Instead, let’s consider sustainability as a strategic lever for value creation, resilience, and competitive advantage.
The confusion stems in part from how ESG was marketed.
ESG and sustainability often show up in the same reports, the same slides, and the same conference panels, but they’re not the same thing. They look at the world through very different lenses – and confusing the two is part of what’s holding companies back.
ESG is a framework for assessing outside-in risk. It asks: What environmental, social, or governance issues could impact our financial performance? In other words, what could go wrong that might hurt the company’s economic value? It’s not a moral stance – it’s business hygiene. As a due diligence tool for investors, it’s critical but narrow. Sustainability, by contrast, is inside-out value creation. It starts from a different question: Where do we leave our biggest mark on people and planet? And how can we turn that into long-term value? It’s broader, opportunity-driven, and anchored in strategy, innovation, and purpose. It’s not about avoiding risk – it’s about creating value.
The confusion stems in part from how ESG was marketed. For years, it was framed as “doing good with your money,” a win-win narrative that suggested aligning purpose and profit. But the real engine behind ESG was always financial risk. So, when the backlash hit, ESG found itself in the crossfire. Investors treated it as a spreadsheet exercise, critics treated it like a political agenda – and the mismatch between its image and its intent exploded into a credibility crisis.
Meanwhile, sustainability continued to evolve. The EU’s Corporate Sustainability Reporting Directive pushed companies to apply a double materiality lens. That means looking at risks to the company (ESG) and risks from the company (sustainability). The distinction matters. Take climate: it’s financially material, so it shows up in ESG. But what about deforestation, water stress, or biodiversity loss? These may not always hit short-term cash flow, but they can still represent massive planetary harm and missed strategic opportunities.
You can have a high ESG score and still harm the environment. You can get top marks on governance and still ignore living wages. That’s not a flaw in ESG, it’s a flaw in how we conflate two very different tools. Bottom line: ESG is like getting your cholesterol checked, essential for spotting early warning signs that could threaten the company’s health. Sustainability is the balanced diet, exercise, and good sleep that keeps the whole system performing over the long term. You need both, but we shouldn’t confuse them.
Bottom line: ESG is like getting your cholesterol checked, essential for spotting early warning signs that could threaten the company’s health. Sustainability is the balanced diet, exercise, and good sleep that keeps the whole system performing over the long term. You need both, but we shouldn’t confuse them.
“Cutting carbon is critical. But real sustainability demands a wider lens: planetary health, social equity, and a strategy-level commitment. This isn’t charity – it’s good business.”
Let’s get one thing straight: climate is critical. But it’s only one part of the sustainability equation. Think of the Planetary Boundaries framework as a full health check-up for the planet. Climate is the high fever everyone notices, but doctors – in this case, Johan Rockström and his colleagues – are also waving red flags at biodiversity loss, freshwater depletion, deforestation, and toxic chemicals and pollution (microplastics, PFAS). Of the nine planetary systems, six are already beyond safe limits. Earth is not just having a little fever; it’s facing multiple organ failures.
So why do we get stuck in the carbon tunnel vision?
Because carbon fits neatly into a spreadsheet: one unit (ppm), one price (€/tonne), one KPI (net zero). But focusing only on carbon leaves too much out. Cotton dries up rivers, feedstock drives deforestation, and plastics pollute oceans.
And social issues? They barely make the corporate dashboard.
So, what does this mean in practice?
Bottom line: Cutting carbon is critical. But real sustainability demands a wider lens: planetary health, social equity, and a strategy-level commitment. This isn’t charity – it’s good business.
When it comes to sustainability, the first question I often hear in boardrooms is: “Can we afford it?” But when someone pitches an AI investment, the room leans in with support and praise.
Why such a double standard? Because sustainability payoffs show up on the wrong calendar page. Returns from renewables, circularity, or regenerative agriculture typically accrue over three to 10 years. But in a 90-day results culture, future value is discounted – until it’s too late.
The legacy of “green as PR” doesn’t help. Many initiatives were low-risk, low-return window dressing. For years, “sustainability” was a code for planting a few trees while core operations stayed the same. Fast-forward to today when real sustainability opportunities require investments – and, yes, some deliberate risk-taking! – and the alarm bells still shout “COSTS!” It’s time to retire this reflex.
When I run the numbers, the scariest line item isn’t the money we spend today, it’s the massive bill we inherit by postponing action. Skip the low-carbon retrofit and stay exposed to surging carbon prices. Ignore dematerializing your products and stay exposed to raw-material shocks (lithium, copper, etc.). One storm can idle a plant for months and push an insurer close to insolvency.
The Nordic financial services group Nordea said it best: “The cost of transition to a low-carbon economy for the fund may indeed be modest given the falling costs of green technologies. However, we believe the effects of physical climate risk on the fund may be severely underestimated.”
Futureproofing is the cheapest insurance on offer, and its premium goes up for each year we delay.
Now, change lenses and look at sustainability as capital, not charity: energy efficiency that cuts your costs, circular supply loops that address raw-material shocks and supply-chain dependencies, and low-impact products that win new customers.
My favorite part? Circular business models. Closing loops turns waste fees into feedstock revenue, keeps assets in play longer, and delights customers with subscription models competitors can’t copy with their linear thinking.
Bottom line: Sustainability isn’t a feel-good cost center. It’s the smartest, most strategic play in 2025. Every bit as strategic as AI, and quicker to pay back than doing nothing.
We launched a sustainable product, but no one is buying it.
“We launched a sustainable product, but no one is buying it.”
This is one of the most recurring discussions. Let’s unpack this, because in most cases, sustainability isn’t the problem.
One of the biggest mistakes is designing a “sustainable” product and forgetting about the customer. A green product that underperforms or overcharges consumers won’t win. Nike’s Trash Talk shoe, the first performance basketball shoe made from manufacturing waste that promised to turn “garbage into trash talk,” flopped because it looked bad and felt even worse to wear.
Fast forward to Nike Flyknit, which had the same ambition but far better execution. Engineered from 60% less waste, lightweight, durable, and high performing. It didn’t just meet the bar for a performance shoe, it raised it. And it became one of Nike’s best-selling shoes.
The lesson here? Sustainability is a feature, not an excuse. The best sustainability products elevate the customer experience; they don’t reduce it.
Here’s another hard truth: many sustainable products are simply overpriced. True, they are often more expensive to produce. But is it fair to expect the consumer to absorb all the extra cost? A Kearney study found that most green products are nearly twice the cost of conventional ones. They also found that a simple shift from a relative to a fixed margin pricing could solve the issue.
Fair Milk, for example, was introduced by the European Milk Board so farmers could make a decent living. Instead of applying the typical relative margin across brand owners, wholesalers,
and retailers (which would have brought the cost of a liter of milk to well over €1), they added a fixed 10¢ premium that the majority of customers accepted right away.
The lesson? If you add your sustainability premium to the production cost, all the other profit margins stack up quickly.
Bottom line: If your sustainable product isn’t selling, chances are it’s not the sustainability that’s broken. It’s the pricing, the performance, or your internal incentives. Sustainability doesn’t excuse bad business logic – it demands doing better.
Climate targets are being dropped, ESG funds are losing assets, and AI is stealing all the headlines. Maybe the sustainability party is over? It can certainly feel like it sometimes, as sustainability faces a combination of backlash, burnout, and boredom.
But change rarely moves in a straight line. Media hype and real transformation follow different curves. We’re actually hitting multiple S-curves of rapid progress right now: renewables are cheaper than fossil fuels, EVs have gone from niche to mainstream in Europe and China, and heat pumps, alternative proteins, regenerative agriculture, and circular business models are scaling fast. Circular business models in particular are starting to revolutionize how we produce and consume, from repair and reuse to product-as-a-service. This isn’t theory – it’s quietly becoming the new operating model.
The companies that thrive will be those reading S-curves, investing in innovation, and placing smart bets on future markets. If you’re walking away from climate targets in 2025, your problem isn’t sustainability, it’s futureproofing.
Bottom line: The party may be over, but the game isn’t. Sustainability doesn’t move in hype cycles – it moves in system cycles. Now is the time for stamina, bold investments, and leaders who look beyond the quarter.
Each of these five myths skews how we talk about value, risk, and leadership. They shrink the scope of what sustainability really is and what it can do. Sustainability isn’t charity, it’s not a compliance checklist, and it’s definitely not just about doing a little less harm.
Done right, sustainability is business at its best: long-term, opportunity-focused, grounded in purpose, and aligned with how markets are changing. It’s about building companies that are resilient enough to weather shocks, sharp enough to spot emerging demand, and bold enough to shape the future rather than react to it.
This isn’t a feel-good add-on. It’s a serious lever for performance. As strategic as AI, as measurable as risk, as essential as your next customer. Ignore the noise, challenge the myths, and start treating sustainability for what it really is – good business.
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