Sustainability needs organizations to overcome the six “debts”

HFS Research frequently examines how “enterprise debts” hinder the adoption of emerging technologies like generative artificial intelligence (see Exhibit 1). But what applies to GenAI applies to any transformation effort—whether in enterprises, the public sector, or entire nations. These debts are barriers to change that have accumulated since an organization’s beginning.

Sustainability means addressing interlinked environmental, social, and economic outcomes aligned with the 17 UN Sustainable Development Goals (SDGs; our report lays out an approach here). To meet the demands and opportunities of sustainability, organizations must address six key debts: culture, skills, data, technology (digital and physical), process, and strategy.

To overcome these barriers to change, organizations must begin breaking down the global sustainability context into material spheres of influence, align with regulatory and financial frameworks, and foster collaboration across organizations and ecosystems (see Exhibit 2 and our separate look at the HFS sustainability research framework here).

Exhibit 1: The debts impeding the implementation of GenAI apply to sustainability goals across the environmental, social, and economic spectrum

Sample: 550 Enterprise Leaders
Source: HFS Research, 2025

Culture change to achieve sustainability must start at the top

Strong CEO and board leadership do not automatically fix sustainability, but their absence makes transformation impossible. Leadership sets the tone and formal incentive for embedding sustainability. Organizations that cultivate resilience, curiosity, and self-confidence to push beyond the norms of existing systems are more likely to make sustainability a differentiator, as our analysis argues it definitely is in 2025.

Unilever has successfully completed several waves of embedding sustainability into its corporate DNA, making it a core business strategy rather than an add-on. Under clear CEO leadership, the company has aligned executive compensation with sustainability performance. Despite recent turbulence about how Unilever communicates its sustainability leadership in a financial system that—woefully—still thinks in the short-term, Unilever’s leadership is an example to follow (and to learn from both its success and missteps) for organizations attempting to set new industry standards, contribute to systemic change, or embed sustainability quietly into daily operations.

Sustainability strategies must cascade across organizations and ecosystems—transition planning is vital

Sustainability must permeate the entire organization, ensuring that every department and employee aligns with the company’s transition plan, which itself should align with the SDGs. Incentives play a crucial role in this alignment. See our call to the financial sector to lead on transition planning in the absence of regulation.

Without transition plans to align to, a strategy gap between leadership and the organization emerges and entrenches silos. A scatter-gun approach to sustainability investments is a recipe for fragmented, subscale “feel-good” projects. It’s time for the C-suite to take the reins and steer investments toward strategic, organizational, and systemic impact.

IKEA recently released its comprehensive transition plan, which is aligned with global goals and its own most significant spheres of influence. Despite current politics, Microsoft and many other firms have linked executive bonuses to sustainability metrics, ensuring top-down accountability. Others, such as Schneider Electric, integrate sustainability objectives into supply chain operations and R&D, including by collaborating with suppliers and ensuring that sustainability commitments translate into operational changes. Without such cascading strategies, sustainability efforts risk remaining superficial.

Both hard and soft skills are essential for sustainability

Organizations must continuously update their skills to meet sustainability. Both technical expertise (e.g., ESG reporting, renewable energy sourcing, or circular supply chain management) and soft skills (such as cross-functional collaboration and systems thinking) are crucial.

Siemens has invested heavily in training employees on sustainable engineering and circular economy principles, ensuring its workforce can design products that minimize waste and emissions. Similarly, financial sector companies, such as HSBC, are upskilling employees to assess climate risks and integrate sustainability into financial decision-making.

Data availability and quality are critical for ESG reporting and business impact

ESG reporting depends on reliable, high-quality data, yet many organizations struggle with fragmented, inconsistent datasets. The lack of standardized sustainability data impedes accurate impact measurement and informed decision-making.

Technology firms large and small, from SAP and Salesforce to Watershed and Persefoni, are developing digital platforms that aggregate sustainability data, enabling businesses to track emissions, energy usage, and social impact in real time; our overview here expands on these efforts. The EU’s Corporate Sustainability Reporting Directive (CSRD) further pushes organizations to refine their data collection processes, making transparency a regulatory necessity rather than a voluntary effort. As we argue here, 2025, as the “year of CSRD,” must go further into sustainable impact and business value.

Process complexity impedes data gathering and implementing sustainability strategies

Cumbersome and outdated processes slow sustainability’s integration. Many organizations lack streamlined mechanisms to collect sustainability data, implement ESG initiatives, and track progress efficiently.

P&G tackled this by embedding sustainability checkpoints into its product development processes. By integrating lifecycle assessments into R&D and supply chain operations, P&G ensures that sustainability is not an afterthought but a fundamental part of product innovation. For years, firms across industries have been redesigning procurement processes to prioritize sustainable materials and supplier practices, simplifying compliance with ESG standards, and reducing their overall emissions footprints.

Technology—both digital and physical—must be upgraded for sustainability

Technology debt—outdated or inefficient digital and physical infrastructure—prevents organizations from meeting sustainability goals. One route organizations must explore is for physical assets to align with circularity principles (see our recent overview of a circular supply chain conference here).

At the intersection of physical and digital technical debt are the hyperscale cloud providers—AWS, Google, and Microsoft—that are investing in AI-driven energy management systems for their data centers to cut energy consumption.

Exhibit 2: The HFS sustainability research framework is interconnected with overcoming enterprise “debt” barriers to change

Source: HFS Research, 2025

The Bottom Line: Clarity on your organizational debts means clarity for addressing sustainability and finding its true impact and value potential.

Addressing debts—culture, skills, data, technology, process, and strategy—provides a clear roadmap, alongside alignment to the global context and your own material spheres of influence, for organizations to address sustainability’s demands and opportunities. By identifying and overcoming these barriers, organizations can go far beyond compliance to widespread positive impact for the environment, people, and the organization itself.