By Frank Pagano, Shareholder, Advisor, Author
In light of the past few years, between geo-political changes and the renaissance of tech and energy intense progress, mostly linked to Gen AI and Agentic AI, what does the word “sustainability” even mean today? A lot of bad press and a clear pull from public and private institutions in favor of a necessary growth agenda has weakened the sustainability movement, its content and its ambassadors. Corporations are toning down their green actions and talk. Fans are torn between lower purchasing power and the right to know, understand and consume fairly. It’s a mess, to be honest. This is why we (FP) sit down with a sustainability black belt, Leigh Pezzicara (LP), who served as a C-level “pro” at multiple global corporations, to chat about present and future of the sustainability agenda. We double click on real life use cases – if it means anything, how does it look? It’s a three-act pièce. We need to have this conversation. Therefore, buckle up.
Act I. The status quo.
Q: Tell me a little bit about you.
LP: As a mountain sports enthusiast, my passions in life for health, well-being, nature, sport, and sustainability, are deeply intertwined. I began my career in the ski industry in Colorado, USA, and it’s since evolved to span sustainable sporting events in Switzerland, corporate sustainability, design and development, communications, marketing, chocolate, climate, social impact, philanthropy, cosmetics, engagement, and more. At my core, I’m an optimistic bridge builder and motivator, dedicated to moving sustainability forward and creating meaningful impact for people and organizations across the entire value chain.
Q: Congrats, Leigh. Extremely rich background. Now, let’s review the past 5-10 years of the ESG narrative and the ESG policies for business. What was good? What were its key 2-3 achievements globally?
LP: Firstly, I have to separate sustainability from ESG. I came into sustainability almost 20 years ago, to generate value for business while positively impacting the environment and society. This was at a time when we were making bold commitments; when we knew what needed to be achieved but did not yet know how to get there. We were building the business case, developing new products, differentiating brands, and reducing waste, inefficiencies, and risk, all while trying to improve livelihoods and protect the environment. We were just getting started on a journey that would (and still does) need many more steps. We generated momentum and businesses were starting to do things “better.” Never perfect, but better. And this was what consumers were responding to – purpose, authenticity, transparency, effort. Companies were creating social missions and standing for something beyond their product, establishing their license to operate, building loyalty with consumers, providing purpose for employees.
ESG becoming more of an emphasis, and with it reporting, regulation and compliance, was a positive step that harmonized approaches and set a baseline requirement for all companies to ensure everyone was improving the way they operated and that they reported in a consistent and comparable way. As with most efforts in this space, the intention was good. Another achievement of the movement was awareness. Consumers became more aware of the impact of things they were buying, eating, wearing, etc… and started to demand more sustainable products and practices. Numerous studies show that improved business performance, growth, employee and consumer attraction and retention stem from well-integrated sustainability strategies. One of the first inspiring turnarounds that I remember was with the late Ray Anderson’s absolute transformation of his company, Interface, and the business’s growth and financial success while achieving its Mission Zero ambition. Finally, let’s not forget the wave of innovations we’ve seen; bioengineered ingredients and materials – fashion brands moved away from animal fur, introduced luxurious leather alternatives like mushroom or grape leather, and even adopted lab-grown silk. Technology has advanced transparency and traceability, starting with Patagonia’s Footprint Chronicles for example, or enabling consumers to trace a merino wool sweater back to sheep in New Zealand or yogurt to its dairy farm origins, to now offering numerous geo-location and digital product passport solutions. Electric vehicles have surged globally, with EV sales growing from just 2% of new car sales in 2018 to over 22% today. Renewable energy is beginning to surpass fossil fuels in several regions, while carbon removal technologies gain traction as a complement to carbon reduction. We also see creative repurposing of materials; for example, metals from the automotive industry being transformed into computer components, building facades, jewelry, and furniture. Despite political backlash in the US and EU, other countries are stepping up, recognizing the opportunity to mitigate climate impacts and build resilient economies.
Q: Ok, let’s move to the other side of the moon. The miss. A lot was missed. It has been a “failure,” let’s be honest, if we look at targets and objectives. The plan was probably too wide, too complex, or too woke. What are the big 2-3 missed opportunities?
LP: Well, I don’t think it’s been a total failure. Do I feel like we should be further along? Yes. Do I feel like we’ve stalled? Yes. There are many areas that could have been improved, and we obviously haven’t achieved enough impact or moved fast enough. Instead of both sustainability and ESG playing equal parts, the emphasis on reporting and compliance drew resources out of impact generating activities. Expectations, initiatives, and regulations have become more complex and burdensome, applying too many restrictions to businesses without looking at realistic operating systems, affordable access to materials and technology needed to meet regulatory mandates, and clear success metrics. Additionally, as budgets have become tighter, expectations that sustainability “teams” (I say “teams” lightly, since some have been reduced to one person) will drive new business opportunities and transform every function without any resources, budget, people nor influence, is a recipe for failure. Another missed opportunity is around the narrative. One needs a Ph.D. just to decipher all the jargon being thrown around. We’ve lost key fundamental messages that sustainability is better for business, better for health, secures resources, protects living beings, ensures everyone has a safer future filled with opportunities to thrive. These are topics I believe everyone can agree on, versus the divisive political landscape that’s emerged. The narrative around climate (among other topics) has also become negative and ominous, focusing on scarcity, sacrifice, what not to do. And with that, overwhelm and complexity has evolved into defeatism. It’s too big, too costly, too much has to happen. We will never get there, so why bother? We bother because there is always another way. There are business leaders proving sustainability drives success, encouraging positive behaviors and making the right choice the only choice. There are governments seizing opportunities to lead the change and incentivizing businesses and consumers to move in the right direction, instead of burdening them. There are regenerative and renewable models bringing prosperity to local communities. Collective action has moved mountains in the past and will again in the future.
Act II. The solve.
Q: Let’s try to look at the future, building on what we learned, as you well say. What are the 2-3 priorities of a new narrative around sustainability?
LP: Hopeful, pragmatic, resilient. Simply put, we need more good news making headlines. This speaks to a much bigger societal issue of negative news selling, doomsday scrolling, and a divisive culture of blaming and shaming. But there are so many positive initiatives making waves across communities, states, countries, regions. People need to hear these. They need to realize that individuals are having an impact, that there are efforts they can get involved in, and that there are reasons to be hopeful. There are so many smart and industrious people and companies innovating for good. I like how some have reframed the narrative to center around resilience, regeneration and trust. A positive yet realistic narrative focusing on solutions, rather than problems, will help people understand that it’s not too late and that, together, we can make a difference. There is cause for optimism, and it’s because people are acting. The new narrative also needs to be straightforward and pragmatic. Perfection is not the aim. We are human. We live in an interconnected world. We eat. We wear clothes. Our mere existence creates a footprint. But if we are conscious about it and create more of a positive impact to compensate beyond our footprint – whether through work, activism, influence, investments, or personal actions – this is a great step forward that offsets our negative footprint. Someone much smarter than me once said, “Perfection is the enemy of great.” We can do better, we can even do great things, but they will never be perfect. It’s important to get started and with each step, to aim for doing better. And with that, to be clear, straightforward, and courageous in our communication. Finally, sustainable business and behavior do not negate prosperity. On the contrary, unsustainable businesses and practices will lead to losses in the long run – lack of access to resources, broken supply chains, soiled reputations, excess waste, inefficiency and stagnation. When sustainability is built into the DNA of the company or organization, and not added on late in the game, businesses are set-up for success instead of scrambling to fix models/supply chains/products to adapt to constraints. We know that 80% of a product’s environmental impact is determined during the design phase, so innovating for sustainability at ideation is the most effective. This is when fearless innovators can create something bold and unique, that has a compelling story and business case.
Q: Let’s talk organizational stuff, then. Should sustainability be just inside the main company business plan, and not a separate program and team?
LP: I’d rather put it this way: sustainability should be one of the company’s strategic priorities. This is certain. And it should be linked to the business plan, because a sustainability strategy should drive business and create value not only for the environment and society, but for the company as well. Similar to the evolution of quality and safety, it needs to be foundational, integrated throughout the organization, and it’s becoming more and more so. It cannot be a silo without any influence and integration to be effective. And with that, there also needs to be ambitious targets and KPIs that are material to the company, but require dedicated follow-through, reporting and expertise to hold the company accountable. This is key to building consumer trust.
Q: Now, we need to talk about rules and regulations. What’s the role of regulations from governments and international bodies? For ex., the new EU Law about the Digital Product Passport (aka DPP; 1781/2024).
LP: Regulation absolutely has a role to play. It can jump start change and create momentum. It also evens out the playing field, ensuring transparency by helping consumers to compare products and companies to establish a consistent approach. And let’s be honest, when budgets are tight, many unregulated or unmandated initiatives are put on hold, which is unfortunately happening to sustainability right now, and why I am eager for certain regulations to come into force across industries, such as the DPP. On the other hand, too much regulation ends up with the unintended consequences that companies all adjust to the bare minimum, because going above and beyond becomes too burdensome and too costly. So truly impactful activities get sidelined. Regulation should simplify approaches, hold organizations accountable, protect human rights and the environment, incentivize the right behavior, ignite innovative solutions, and scale emerging industries – carbon dioxide removal (CDR), is a prime example. But it should not, and cannot, become the end-all be-all for sustainable initiatives. If regulation overengineers sustainability compliance, we will sacrifice innovative growth opportunities.
Act III. Real life cases.
Q: It’s not true that sustainability means higher performance and impact, at least as it looks for now. Performance means performance. Tech means performance. Talent and productivity mean performance. What does sustainability mean today? How can it become sexy for businesses out there?
LP: I always say that my team should be business partners. Instead of expecting the business to learn the language of sustainability, more sustainability professionals need to learn the language of business. We should be asking: how does sustainability help the business perform better, run more efficiently, create more value, and give deeper purpose to employees, consumers, and communities? When we implement better practices throughout the entire product lifecycle – call it sustainability, efficiency, or resilience – we reduce waste, secure raw materials, save on logistics, and build more value for customers. To me, sustainability is simply a better way of doing business that also benefits people and the planet. And like with any product or service, performance has to come first. No one uses a cosmetic product that doesn’t work, or eats a decadent treat that doesn’t taste good, just because it’s “more sustainable.” Does the cleaning product work? Yes, and great. And guess what: it’s also better for your health because it’s non-toxic. Does that chocolate taste amazing? Yes, and excellent. And it also helps fight deforestation so cocoa-growing regions can thrive. Is your morning coffee smooth and energizing? Wonderful. And it’s improving farmer livelihoods so they can keep growing coffee, and you can keep drinking it. Sustainability isn’t the lead message on a product or service, it’s the differentiator and value add. It’s the reason someone will choose a brand or product when all else is equal. It’s also the reason they will stay loyal.
Q: What are the companies and CEOs who are doing it right? Let’s share a couple of examples.
LP: Of course, there are the usual names that come to mind when we talk about sustainability leaders, and for good reason. Jesper Brodin, former CEO of Ingka Group, has long been a role model for weaving sustainable thinking into IKEA’s business model, from responsible materials and efficient design to repair, refurbishment and end-of-life solutions. Patagonia is another obvious choice, known for the iconic ‘Don’t buy this jacket’ campaign and the more recent, radical move to transfer ownership to a trust so profits can go directly toward fighting climate change. And beyond these big, familiar players, many large companies across industries are genuinely making progress, whether it’s on circularity, renewable materials, water and resource conservation, or carbon reduction. But what feels particularly exciting right now is the rise of newer brands like Veja or Another Tomorrow, built from day one around a totally different way of doing business. They’re proving that you can integrate sustainability across the entire value chain, from ideation to end of life, without ever compromising on quality, functionality or beauty.
Q: The goal shouldn’t be to outperform market leaders or beat current giants, but to set a new standard, and talk to New Gen-s, who have less baggage in the way they pick brands, products and services. Is that right?
LP: Younger generations want their purchases to reflect their values and identity, and they’ll champion brands that express how they see themselves in the world. But they won’t carry the burden of sustainability or compromise on performance. Products still need to deliver, and brands need to find the most responsible way to get there. Today’s consumers ‘vote’ with their wallets, so brands must earn that trust through simple, transparent communication, by addressing real concerns without doom, and by offering tangible solutions that create a sense of agency and hope. In short, brands must make sustainability effortless, credible, and aligned with who consumers aspire to be.
Conclusion
The new meaning of sustainability is better business. Sustainability needs to taste simple, actionable, guilt-free, and unlock value pools that would be impossible to activate in a world pre-AI and pre-efficiency fever. We probably need less of the distortions of the ESG narrative and more of a turnaround mindset to set the foundations of a new world. Again, technology, rules and an inclusive culture, one that brings together the entire value chain around the table, will be key. Ms. Pezzicara walks the talk every day and went through the up-s and down-s of a world that has been and is more nervous these days. Corporations did not like to be preached. They will love the efficiencies of a simpler and tech-heavy sustainability narrative, while New Gen-s will vote for those players that care about their world. Yes, it’s their world we are eating, consuming and using. More generative business cases will come. The author’s collection of cases is captured in his latest book, Total Marketing, but talking to people like Leigh Pezzicara is the right thing to do, before a new year. Sustainable, exceptional, efficient and inclusive products and service; that’s all we want for old and new enterprises and entrepreneurs. Let’s mean it this time.
