The Visionary CEO’s Guide to Sustainability Acknowledgments For their contributions to this report, the leadership team of Bain & Company’s Global Sustainability & Responsibility practice would like to thank the following people: Colin Armstrong, Nick Baker, Mads Balsig, Andy Bankert, Stephen Bertrand, Jan Budde, Michelle Carroll, Christina Cerezo, Rick Clerx, Carlos Cruz, Katrina Cuthell, Francesco D’Angelo, Prashant Das, Diego Depetris, Joey DeRosa, Magali Deryckere, Simone Doms, Katherine Duceman, Emily Emmett, Adam Frey, Raina Gandhi, Sheena Garg, Ludovica Gianni, Christian Graf, Ishita Gupta, Jim Harris, Molly Hart, Andrea Isabella, Krystle Jiang, Austin Kim, Michael Kochan, Sune Kok, Ekaterina Kuznetcova, Sophie Ladousse, Adele Lam, Rafael Lam, Ethan Lampert, Xue Lee, Emily Leinbach, Natalia Lejarraga, Ariel Lerner, Livia Luzzatto, Clark Meng, Milica Milic, Martha Moreau, Ludovica Mottura, Christina Mueller, Dayle Nel, Tiziano Paci, Onaizah Panhwar, Adam Papania, Tracy Parker, Leslie Peng, Tanja Pick, Andrew Pontti, Dani Rosen, Joe Scalise, Lisa Schold, Jason Scuglik, Gabriele Sessa, Deeksha Sharma, Tamar Sifri, Dane Smith, Alice Song, Ingo Stein, Khushboo Sultan, Tiiram Sunderland, Himadri Suri, Joe Tan, Sonal Tripathy, Clementien Valk-Fabels, Tarah Walker, Katie Ware, and Selina Zhuang. Thanks as well to Nanette Byrnes, David Diamond, Paul Judge, and the Editorial team. This work is based on secondary market research, analysis of financial information available or provided to Bain & Company and a range of interviews with industry participants. Bain & Company has not independently verified any such information provided or available to Bain and makes no representation or warranty, express or implied, that such information is accurate or complete. Projected market and financial information, analyses and conclusions contained herein are based on the information described above and on Bain & Company’s judgment, and should not be construed as definitive forecasts or guarantees of future performance or results. The information and analysis herein does not constitute advice of any kind, is not intended to be used for investment purposes, and neither Bain & Company nor any of its subsidiaries or their respective officers, directors, shareholders, employees or agents accept any responsibility or liability with respect to the use of or reliance on any information or analysis contained in this document. This work is copyright Bain & Company and may not be published, transmitted, broadcast, copied, reproduced or reprinted in whole or in part without the explicit written permission of Bain & Company. Net Promoter®, NPS®, NPS Prism®, and the NPS-related emoticons are registered trademarks, and Net Promoter Scoresm, NPSxsm, and Net Promoter Systemsm are service marks of Bain & Company, Inc., NICE Systems, Inc., and Fred Reichheld. Copyright © 2023 Bain & Company, Inc. All rights reserved. The Visionary CEO’s Guide to Sustainability Contents The Questions Every CEO Needs to Ask About Sustainability . . . . . . . . . . . . . . . . . . 3 Levers of Change: Technology, Behavior, Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Selling Sustainability Means Decoding Consumers . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Does a Purpose Help Brands Grow? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Lower Costs, Faster Adoption: Closing the Sustainable Innovation Gap . . . . . . . . . . 21 The Future Is Circular: How Companies Can Prepare to Grow . . . . . . . . . . . . . . . . . 26 Leading with Vision: Harnessing the Climate Policy Response . . . . . . . . . . . . . . . . . 31 Sector Perspectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 Building Resilience in Your Business Strategy: Four Imperatives for Leaders . . . . 40 The Energy Transition’s Other Big Puzzle: Making the Math Work . . . . . . . . . . . . . . 46 Can Food and Agriculture Companies Raise Their Game? . . . . . . . . . . . . . . . . . . . . 53 Fires, Floods, and Loans: How Banks Can Deal with Increasing Climate Risks . . . . 60 Making It Happen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .