Sustainability governance for hard times
27 November, 2025. Alyssa Jade McDonald-Baertl
Across my work this year, in boards, governance reviews, supply-chain due-diligence and CSRD preparations, we know that sustainability matters because regulation demands it and (business) customers (increasingly) expect it. Yet we also know that margins are being squeezed by forces we don’t control, freight surges, geopolitical tariffs, supply bottlenecks, and the inevitable cost of maintaining resilience in the global economy.
And so 2025 became the year of the double tension
- How do we build credible sustainability capabilities without over-investing ahead of value?
- How do we stay compliant, trusted, and competitive while protecting the P&L?
I’ve been living inside this question within my boards, where our reality, and that of many of your organisations, is not the shiny future painted at conferences. It’s the real world of legacy systems that groan under new reporting expectations, sales teams who want to help but can’t carry 120 pages of product life cycle assessment theory into a tender, procurement teams who see risk coming before anyone else, and suppliers who can’t (won’t??) always give you the data you need in the timeframe regulators expect. The Belém COP called for climate action that delivers real outcomes for people and nature. In the work I do with boards, that means one thing, sustainability budgets must be shaped by impact, not optics.
In that spirit, let me pull from three very different German companies I’ve worked with via our advisory work, unnamed for confidentiality, yet representative of three distinct sectors … because their struggles and choices mirror much of what I see inside the organisations we support.
Case Study One
This organisation sits in a sector defined by velocity, fast logistics, fast returns, fast product flows. But when freight costs and tariffs surged, they felt it first and hardest. Their board (and finance committee) wanted sustainability data, particularly digital product passport readiness and supply-chain traceability, but their CFO made it clear that there would be no dedicated sustainability tech budget. Sustainability had to “ride on” existing IT investment, not become its own capital request. What they did well was simple and courageous, they chose focus over breadth. Instead of trying to analyse their entire catalogue, they prioritised the product categories their customers were most likely to ask questions about. They put their limited investment where it would create immediate commercial credibility.
The lesson >> focus beats ambition when money is tight … and often when it’s not.
Case Study Two
An automotive supplier with global exposure found themselves caught between tight unit margins and increasingly sophisticated OEM sustainability requirements. Their customers were asking for component-level LCAs and precise Scope 3 transparency, even as geopolitical uncertainty caused tariff whiplash and raw-material volatility. Their board made a strategic decision, five product families would receive deep LCA work this year. Those five represented significant revenue and potential contract renewal risk. Everything else would need to wait. They also introduced a supplier transparency index, which offered a realistic assessment of where their regulatory exposure was concentrated.
The lesson >> data quality should follow contract risk and revenue concentration, not internal enthusiasm.
Case Study Three
This organisation found itself under mounting pressure from new EU circularity and packaging regulations. Input costs for packaging and materials had risen sharply since 2022, and freight instability added more stress. Their board supported sustainability, but not without scrutiny of every euro leaving the balance sheet. Their solution shifted from SKU-level LCAs to material-level LCAs, freeing staff capacity while positioning the company ahead of recyclability and take-back requirements. They didn’t reduce ambition, they reduced noise.
The lesson >> sometimes the smartest sustainability move is to reduce scope, not expand it.
The Shared Pattern >> Sustainability Is Not Optional, But Investment Must Be Sequenced
Across these companies, and across my organisations, I see the same restrictive freedom >> We must act and we must act selectively.
This is not about doing less. This is about making sure every euro, every hour, every dataset actually delivers outcomes for planet, people, and profit.
Prioritisation is not an escape hatch, it is a discipline. And in my humble opinion, it is what prevents sustainability from becoming either a cost centre or a symbolic gesture. In my experience, sustainability becomes powerful precisely when it is sequenced with intention, when it supports decisions that matter, and when it strengthens an organisation’s long-term resilience.
Boards don’t need sustainability that is easier, what they need is sustainability that is impactful. And, 20205 showed us, and while the EU proposes more changes to the regulatory framework, companies still to make choices. I see the leaders who make real sustainability progress are not the ones who promise the most. They are the ones who learn to protect budget for the highest-impact work and deliberately turn down the noise everywhere else. It is the kind of ambition that allows sustainability to do its real job, strengthen the business, protect the planet, improve people’s lives, and guide companies through the uncertainties that define this decade.