At our recent Facilitated Workshop on the challenges and opportunities of sustainable finance, our host, Pablo Collazzo, began by surveying the business leaders in attendance. Interestingly, the majority of participants indicated that their organisations are well-prepared for ESG (Environmental, Social, and Governance) reporting and have a solid understanding of sustainable finance. This level of readiness exceeded Pablo’s expectations, as it’s not typically observed. Our IMI Corporate Members seem to be ahead of the curve; while many organisations are aware of sustainable finance, few fully understand its implications. Most companies are still in the capacity-building phase, gradually moving towards full readiness.

But what exactly is sustainable finance? At its core, it’s still traditional finance—focused on profits and returns. The difference lies in how those returns are achieved. Sustainable finance involves making financial decisions that consider their impact on society and the environment. For example, conducting a cost-benefit analysis while recognising that business activities affect both society and the planet. It’s about integrating accountability into financial choices—viewing finance through the lens of sustainability.

Historically, companies have often prioritised stakeholders at the expense of broader societal or environmental concerns, taking advantage of weak regulations. Only recently have people begun to speak out, realising they can influence the impact companies have on people, the planet, and profits. Today, if a company is perceived as harmful to the environment or society, it risks damaging its core business. This makes sustainability a strategic issue.

Our survey results reveal that the key ESG drivers for our member organisations are sustainability, the planet, and customer expectations. This closely aligns with the “triple bottom line” concept, which emphasises the interdependence of people, planet, and profit. While the idea of the triple bottom line has been around for years, it has evolved significantly. Profitability now depends on how companies treat people and the planet. Meeting stakeholder demands is crucial, but if a company harms society or the environment, it risks losing public support.

For these reasons, sustainability cannot be reduced to a box-ticking exercise—it must become an integral part of a company’s strategy. Embracing sustainability leads to more efficient use of resources such as water and human capital, and it also helps manage risks, many of which are related to sustainability. For example, there are risks associated with resource procurement, especially when certain materials are in danger of depletion.

Looking ahead, ESG reporting will soon become mandatory. The European Corporate Sustainability Reporting Directive sets out a clear timeline for this transition. While reporting is currently required only for large companies, businesses of all sizes will soon need to prepare. It’s essential to accelerate capacity-building now to be ready when mandatory reporting becomes applicable.

In conclusion, sustainability should be seen as a shift in mindset, not just a compliance exercise. Only by embracing this change can organisations become truly sustainable.