Navigating sustainability in an era of increased uncertainty

With the world facing increased geopolitical upheavals, supply chain vulnerabilities, and evolving mandates, organizations must strike a balance between preserving value today and building value for tomorrow. Hosted by KPMG in Canada's Leaders 2050 network, the "Navigating Sustainability in an Era of Increased Uncertainty" event fostered interdisciplinary discussions to address sustainability challenges and uncover actionable solutions. The event aimed to empower future leaders with strategies that align their organizations' business goals with the global ambition of transitioning to a net-zero economy by 2050.

Engaging discussions among event participants helped identify meaningful insights into the key sustainability challenges both individuals and organizations face. These insights not only illuminated the nature of these challenges but also pointed to potential solutions to effectively address them.

Young professionals play a crucial role in identifying, understanding and addressing the key uncertainties, challenges and barriers their organizations encounter in achieving sustainability goals.

Discussions during the event revealed the various barriers organizations face in implementing sustainability initiatives. These challenges include:

1. Data quality and accessibility: Organizations struggle with collecting, standardizing, and accessing reliable data to measure and report sustainability metrics. Additionally, current data processing systems are often inadequate for handling climate-related metrics, particularly supply chain greenhouse gas emissions
2. Regulatory uncertainty and costs: Frequent regulatory changes introduce ambiguity for organizations and impose additional costs for evaluating compliance. The use of vague regulatory language has prompted some companies to suspend their disclosure efforts, resulting in a "negative feedback loop" that hinders progress
3. Internal misalignment and perceived profit-sustainability tradeoff: Organizations often prioritize short-term profitability over long-term sustainability due to differing mandates across business units and inconsistent leadership engagement. While this emphasis can slow progress on climate-related risk mitigation and long-term value creation, aligning profit and sustainability goals is increasingly seen as a strategic opportunity – one that strengthens business resilience and delivers broader environmental and social benefits
4. Process inconsistency and supply chain volatility: Larger corporations often grapple with disparities in process maturity and ambition across their business units and geographies. To that end, there is added complexity to governance and standardization across sustainability initiatives. In contrast, smaller and medium-sized enterprises face heightened uncertainty due to supply chain disruptions and transition-related climate risks. These challenges hinder their ability to set realistic ESG targets.

With clearly identified challenges, there is a huge potential for young sustainability professionals to use their voices to identify lasting solutions.

As one of the insights from another KPMG in Canada inaugural Leaders 2050 events indicates¹, young sustainability professionals seek opportunities for active discussion and knowledge sharing across all levels. While the challenges loom large, the event sparked a range of promising solutions to help organizations navigate the evolving sustainability landscape effectively:

1. Leveraging technology for data management: Participants emphasized deploying Artificial Intelligence (AI) and automated systems to streamline data collection, processing, and reporting. For instance, data management platforms, such as Workiva, could enable the automated preparation of sustainability reports while reducing administrative burdens
2. Regulatory alignment through governance: Organizations should establish robust governance models for sustainability topics, such as climate risk and decarbonization, and activities (e.g., external disclosures), ensuring alignment between compliance teams, sustainability leaders, and business decision-makers. This includes adopting both top-down and bottom-up governance structures, along with documentation of the structures to ensure clarity and institutionalize the practice
3. Integrating sustainability into business mandates and prioritizing strategic action plans: Embedding sustainability objectives into the core business strategy creates opportunities to harmonize profitability with environmental and social impact, fostering long-term success and resilience. This includes framing sustainability efforts as contributors to operational efficiency and shareholder value. Additionally, developing clear strategic priorities with actionable roadmaps could allow organizations to navigate areas of uncertainty pragmatically. Investing in scenario planning for regulatory shifts and climate risks is essential
4. Harmonizing profitability with sustainability: Through unified leadership and collaboration, organizations can align profit-making with sustainability goals, even amid contrasting priorities across business units. While leadership engagement may vary, this presents an inspiring chance for champions of sustainability to lead the way and demonstrate the business value of long-term environmental and social efforts. By addressing the tension between short-term gains and lasting benefits, organizations can unlock pathways to harmonize profitability with resilience. Emphasizing leadership and fostering collaboration can help build momentum, facilitating a future where sustainable practices drive both growth and positive impact
5. Stakeholder collaboration – beyond engagement: Collaborating with internal stakeholders (e.g., operations, finance, risk, and compliance teams) and external partners can promote knowledge sharing and cross-functional progress. Involvement in industry forums and initiatives was also highlighted to align on best practices
6. Educating and building awareness: Sustainability education must extend to all organizational tiers, fostering a shared sense of responsibility. Internal campaigns and change management strategies can bridge knowledge gaps and secure buy-in at all levels.

As organizations deal with an evolving sustainability landscape, collaboration and innovation are of paramount importance. The insights from this Leaders 2050 event underscore the need for adaptable governance structures, cross-functional engagement, and technological advancements to navigate pressing sustainability challenges. By addressing barriers head-on and embracing bold solutions, businesses can not only ensure resilience but also lead the charge toward a more sustainable and equitable future.

The Leaders 2050 event in Toronto is one of many designed to convene a diverse group of young sustainability professionals from various industries, fostering meaningful discussions and helping participants develop a deeper understanding of sustainability challenges and opportunities.

Contributing authors: Dmitry Sidorov, Isabel de Verteuil, Johanna Fernandes, Rachel Steinhart, Sarah Sultana, Tyler Tisdelle