From Compliance to Competitiveness: Sustainability for Finance Leaders

From Compliance to Competitiveness: Sustainability for Finance Leaders
January 14, 2026 10 mins

From Compliance to Competitiveness: Sustainability for Finance Leaders

Compliance to Advantage: Sustainability for Finance Leaders

Sustainability is no longer reputational. It’s a strategic priority within risk and capital management, powered by robust data, innovation and industry expertise. For finance leaders, embedding sustainability into decision making can be critical to secure long-term value and earn stakeholder trust.

Key Takeaways
  1. Sustainability is increasingly influencing financial decision-making, with 70% defining growth as a blend of financial and non-financial metrics — signaling a shift towards more holistic models of success.
  2. Finance leaders are considering how to balance short-term pressures with long-term investment in sustainability, innovation and resilience, as part of a broader approach to competitive advantage.
  3. Demonstrating credible sustainability performance can contribute to access to capital, investor confidence and borrowing costs.

Sustainability is evolving from a reputational consideration to a meaningful strategic focus across risk and capital management. With the right data, innovation, and industry expertise, it becomes an opportunity for finance leaders to strengthen decision‑making, support long‑term value creation, and build greater trust with stakeholders.

Recent research highlights this shift and the challenges that remain. According to IBM, 72% of CEOs report heightened demands for transparency in sustainability practices1 and 83% expect improved performance from sustainability investments.2 The Morgan Stanley Institute for Sustainable Investing notes that 70% of younger employees now prioritize corporate values in their career decisions3 and regulatory requirements — especially around supply chain due diligence — are making sustainability impact an essential component of financial and risk management.

However, simply complying with these mandates often adds cost without unlocking the full benefits of proactive sustainability management. For finance leaders, the challenge is clear: Embedding sustainability into decision making can help to secure long-term value and strengthen stakeholder trust.

Why Sustainability Matters: The Business Case

Despite broad recognition — 88% of companies see sustainability as a driver of long-term value — only a minority of organizations have fully integrated it into financial decision making. For example, studies by EY4 and IBM5 indicate that between 27% and 31% of companies have integrated sustainability into core business processes or financial strategy to a significant extent. Most organizations remain in the early stages of integration, highlighting a substantial gap between ambition and execution.

This gap is prompting CFOs and finance teams to rethink traditional growth models, with 70% now blending conventional financial metrics with ESG outcomes to better reflect evolving stakeholder priorities.

Sustainability integration is not uniform and regional variations further influence integration. Carbon tax structures and measurement standards differ widely between OECD and non-OECD countries, creating uneven compliance landscapes. Europe has taken the lead with stringent frameworks such as the Corporate Sustainability Reporting Directive (CSRD) and Task Force on Climate-related Financial Disclosures (TCFD). North America often prioritizes the business case amid fragmented regulations, while Asia Pacific is gaining momentum, propelled by the urgency of climate risk and growing investor expectations.

34%

of finance leaders expect environmental and social metrics to play a larger role in decision making in the finance function.

Source: The CFO Roadmap: Better Decisions for Multidimensional Growth

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Climate Risk is Financial Risk

Climate Risk is Financial Risk

Climate change is now a top global financial risk, with severe weather and natural disasters driving up costs through supply chain disruptions and property damage. In the first half of 2025 alone, weather-related losses hit $100 billion — the highest since 2011 — exposing operational vulnerabilities. Despite this, many organizations continue to rely on outdated risk models that fail to anticipate future probabilities. As a result, integrating climate resilience into strategy, investment and operations is emerging as a key consideration for organizations aiming to mitigate risk and protect long-term value.

Investor Influence is Reshaping Capital Decisions

Investor demand for sustainable funds is surging — over 60% of global investors report growing interest in ESG-focused investments6 and nearly 80% say ESG factors are critical to decision making.7 Sustainability performance now directly influences access to capital, cost of borrowing and shareholder value.

Institutional investors are increasingly seeking credible disclosures, transition plans and quantifiable risk modeling to de-risk portfolios and secure long-term returns. Insurers and investors are aligning more closely, rewarding companies that demonstrate progress and imposing stricter terms on those that lag. Some major financial institutions have already withdrawn from certain markets for sustainability reasons — proof that inaction carries financial consequences. As Daniel Butler, Enterprise Client Group Financial Institution, Europe, the Middle East and Africa asks, “Investors face a critical question — should they prioritize higher returns or greater sustainability?”

How to Capitalize on Sustainability Drivers
Strategic Tool Description Risk of Lagging Behind
Feed-in Tariffs Guaranteed payments for renewable energy supplied to the grid Higher capital costs and reduced competitiveness
Tax Credits Financial incentives for investing in clean energy projects Limited investor interest and missed cost-saving benefits
Government Rebates Direct rebates for adopting sustainable technologies Loss of lucrative incentives and slower market positioning

Reputation remains important. “A brand takes years to build but moments to damage,” warns Pete Rutherford, Aon's Global Enterprise Client Group Financial Services Industry Leader. “When evaluating climate transition finance projects, factors like public sentiment and stakeholder expectations matter. Ultimately, the key question is: Is this a safe, value-enhancing use of capital?”

To support these decisions, investors are leveraging increasingly sophisticated tools, including Aon’s proprietary corporate governance and ESG data platforms, enabling precise climate risk modeling based on real-world data.

“Today, we have access to a broader and more sophisticated set of tools — both proprietary and external — to assess risk than ever before,” says Rutherford.

Despite the ESG shift, fundamentals still matter. Rutherford concludes: “Businesses are continually weighing a critical question: Can we leverage our balance sheet to drive meaningful societal impact — and do so in a way that protects our capital?”

The Short-Term Versus Long-Term Value Dilemma

Finance leaders face a delicate balancing act: meeting short-term ROI expectations of investors and public company shareholders, while also committing to sustainability investments that often require significant upfront capital and deliver returns over a longer horizon. This tension is prompting a shift in priorities, moving the conversation from a singular focus on decarbonization to a dual imperative of energy security and affordability. Against this backdrop, CFOs must weigh the urgency of immediate financial results with the need to invest in sustainable policies and practices that support long-term value creation.

“We live in a very short-term investment focused world,” says Bhuma Patel, Financial Institution National Practice Leader for Aon in North America. “So how do you marry investor return expectations with the long-term focus and long-term need for capital in the energy sector?”

Challenges in Integrating Sustainability into the Finance Agenda

Despite its importance, integrating sustainability into finance presents a range of challenges:

  1. Data Quality and Availability: Inconsistent ESG metrics can make accurate reporting more difficult.
  2. Regulatory Complexity: Evolving frameworks like CSRD, TCFD and the Taskforce on Nature-related Financial Disclosures require robust processes; multinationals face added complexity across jurisdictions.
  3. Skills and Culture Gaps: Finance teams can benefit from upskilling in sustainability literacy.
  4. Resource Constraints: Upfront investment often competes with short-term priorities.
  5. Ownership and Accountability: A lack of clear responsibility for ESG reporting can slow progress.

69%

of CFOs recognized environmental sustainability as essential for growth.

Source: The CFO Roadmap: Better Decisions for Multidimensional Growth

Learn More
Quote icon

Sustainability is now on clients’ agendas — they’re setting clear criteria and expect measurable progress. Companies can no longer treat this as optional. There is a growing expectation to act — and to demonstrate results.

Guido Benz
Aon's Global Industry Specialty Leader, Renewables
Lack of Ownership is The Biggest Challenge with Sustainability Reporting

Here are the top challenges finance leaders face in meeting sustainability reporting requirements.

 

Quote icon

If you view a financial institution as fundamentally a professional risk-taking organization, it’s existential. Tying climate-related goals to financial metrics is not just a feel-good exercise — we’re talking about real financial results.

Andrew Brown
Financial Institution National Practice Leader, Canada

The CFO as a Sustainability Champion

The CFO’s unique visibility across the business and responsibility for resource allocation position make this role pivotal to lead sustainability integration. By embedding ESG considerations into budgeting, forecasting and reporting, CFOs can help shift sustainability from a compliance exercise into a strategic lever for growth. 

Momentum appears to be building — 77% of CFOs plan to maintain or increase responsible investments8. The greatest risk now is inaction. While the pace of change varies, companies that integrate sustainability into their DNA will be better positioned to enhance resilience, foster innovation and seize future opportunities.

Take the Next Step

Aon’s proprietary analytics and tools are designed to help finance leaders quantify climate risk, model scenarios and align sustainability with financial performance. From advanced risk modeling to regulatory compliance insights, we provide the data and expertise to support informed decision making.

Ready to move beyond compliance? Connect with Aon’s specialists today and discover how to turn sustainability metrics into actionable strategies for long-term growth.

Aon’s Thought Leaders
Guido Benz
Global Industry Specialty Leader, Renewables

Andrew Brown
Financial Institution National Practice Leader, Canada

Daniel Butler
Enterprise Client Group Financial Institution, Europe, the Middle East and Africa

Bhuma Patel
Financial Institution National Practice Leader, North America

Charles Philpott
Global Natural Resources Leader, Enterprise Client Group

Mark Potter
Power and Renewables Industry Practice Leader, Europe, the Middle East and Africa

Pete Rutherford
Global Enterprise Client Group Financial Services Industry Leader

Paul Young
Natural Resource Specialty Practice Leader, Europe, the Middle East and Africa

1 Beyond Compliance: Embedding Impact through Innovative Finance, World Economic Forum
2 Beyond Compliance: Embedding Impact through Innovative Finance, World Economic Forum
3 Beyond Compliance: Embedding Impact through Innovative Finance, World Economic Forum
4 Sustainability-centric businesses 40% more confident than siloed peers, EY
5 IBM Study: Sustainability Remains a Business Imperative, But Current Approaches are Falling Short, IBM
6 60% of Global Investors Report That ESG Investing Results in Higher Performance Yields: Sustainability Megatrends Report, ESG News
7 PwC’s 2021 Global investor survey, PwC
8 77% of CFO’s Plan to Maintain or Increase their Sustainability Investments this Year: BDO Survey, ESG News

The CFO Roadmap: Better Decisions for Multidimensional Growth, Aon

 

General Disclaimer

This document is not intended to address any specific situation or to provide legal, regulatory, financial, or other advice. While care has been taken in the production of this document, Aon does not warrant, represent or guarantee the accuracy, adequacy, completeness or fitness for any purpose of the document or any part of it and can accept no liability for any loss incurred in any way by any person who may rely on it. Any recipient shall be responsible for the use to which it puts this document. This document has been compiled using information available to us up to its date of publication and is subject to any qualifications made in the document.

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