Research Shows Sustainability and Business Performance Are Fundamentally Linked

New research reveals that businesses taking meaningful action on environmental sustainability are outcompeting their peers in terms of financial performance by up to 6%, and that perceptions of environmental action account for a significant share of the reputational advantage held by market leaders.

The study, titled ‘The Cost of Silence’, and commissioned by Revolt, a strategic consultancy specialising in positive impact and part of Anthesis Group, analysed over 500 publicly listed companies across 16 industries, using three years of global data. By combining environmental performance indicators, financial data and AI-driven reputation analysis, the study highlights two key findings showing that sustainability and business performance are fundamentally linked:

1. Companies performing above average on environmental sustainability achieve a 6% higher EBITDA compared to their peers.

2. Up to 31% of the reputational advantage held by market-leading businesses is credited to how they are perceived on environmental issues.

The research shows that certain environmental issues consistently shape how leading brands are perceived, no matter the sector. The biggest drivers of reputation accounting for the gap between leading businesses and the average are:

• Renewable energy use (6.6%)
• Responsible resource use (5.9%)
• Water use (4.9%)

The issues that matter most from a business performance perspective vary by industry. In most sectors, there are one or two key environmental priorities that, when addressed, deliver the greatest financial returns. For example:

• In retail, the top issue is cutting carbon emissions
• In automotive, it’s reducing the environmental impact of products

The findings also highlight a significant risk for businesses that fail to communicate their environmental efforts. Financial performance peaks when a company’s actions and communications are aligned. However, less than a quarter (21%) of companies communicate authentically when it comes to their environmental performance, with over three quarters (79%) risking undermining trust by either greenwashing (overstating efforts) or greenhushing (staying silent altogether).

Kirsten Flanik, CEO of Revolt North America, said, “ESG has increasingly been drawn into the so-called culture wars, and it’s understandable that many business leaders feel less comfortable engaging on the issue. But the data shows there is a clear financial and reputational benefit to doing so. A 6% increase in operational earnings is not something any business can afford to ignore, especially in today’s climate.

“The vast majority of companies risk leaving money on the table by failing to communicate around the actions they are taking. The fear of the consequence of speaking out must be measured against the cost to your reputation of saying nothing. Companies need to focus on the issues that shape reputation, reframe how they communicate them, and get back out there to maintain trust, re-engage customers and show stakeholders they’re equipped to handle the risks and opportunities ahead.”

Further details regarding this study can be found here.