For years, sustainability policies were seen as a matter of corporate ethics and social responsibility. Today, however, more and more economists, regulators, and business leaders agree that sustainability is a factor of competitiveness and survival for any business. What is most striking is that many of these ideas were formulated decades ago. Time has shown that they were not theoretical warnings but accurate diagnoses that are now becoming reality.
Expert Insights
- Innovation and regulation as drivers of competitiveness. Porter’s hypothesis (Porter & Van der Linde, 1995) argues that strict environmental regulation can stimulate efficiency and innovation in companies, more than compensating for compliance costs and ultimately improving competitiveness. Today, with rising European and global regulatory pressure, this intuition is confirmed: companies that invest in green innovation gain differentiation and better access to capital and markets.
- The future depends on being “climate-competitive”. As early as 2021, Mark Carney stressed that carbon and climate competitiveness would be a key determinant of business value. Now, recent reports from the World Economic Forum and the European Central Bank confirm that climate risk is also financial risk. Companies that fail to reduce emissions put their solvency and future at risk.
- Investors reward ESG commitment. Research from Ernst & Young (EY) already indicated that investors would prioritize companies with solid ESG strategies. Today, reports from MSCI and Bloomberg show that the market assigns a higher cost of capital to companies that ignore sustainability. What was once an expectation is now an objective investment criterion.
- Pragmatism and risk management. Jim Yong Kim and Paul Fisher warned years ago about the risks of fossil asset depreciation and the need to anticipate the transition. Currently, the International Energy Agency (2023) confirms that new investments in oil and gas must be drastically reduced to meet climate targets, and major central banks are already integrating climate scenarios into their stress tests.
- Cambio de capital y presión de los mercados. Líderes del sector financiero como Larry Fink, presidente de BlackRock, advirtieron que los flujos de capital cambiarían antes que el clima. Y, efectivamente, estamos viendo cómo fondos soberanos, aseguradoras y bancos reducen la exposición a combustibles fósiles y aumentan posiciones en energías renovables y economía circular
Why sustainability is competitive
Sustainability drives innovation and efficiency; accelerates cost savings, differentiation, and supply-chain resilience. At the brand level, consumers, especially younger generations, reward companies with purpose, increasing demand for green skills and intensifying the competition for talent. In an increasingly demanding European regulatory landscape, anticipating compliance reduces risks and costs, while delaying action means missing opportunities and facing sanctions.
How to prepare for sustainable competitiveness
Preparing for sustainable competitiveness requires integrating it at the core of strategy, with environmental and social objectives aligned with business models and growth; measuring and reporting rigorously, ESG data, double materiality or transparency, leveraging digitalization and AI to detect risks and opportunities; fostering innovation in products and processes that reduce emissions and optimize resources, through research and collaboration with startups and universities; and above all, engaging stakeholders (clients, employees, suppliers, communities) to align expectations, generate shared value, and minimize tensions.
The time to act
The message is clear: what once seemed a warning is now a condition for competitiveness. Companies that embed sustainability into their business model, innovating, managing risks, and complying ambitiously, gain better access to capital, talent, and markets, while inaction erodes solvency and reputation. Now is the moment when turning words into results makes the difference.