Businesses face a paradox: growth is often the commercial license to operate, yet many growth strategies undermine the very conditions they rely on. Reliance on cheap resources, stable climates, and predictable regulation is increasingly at odds with a world facing climate breakdown, resource scarcity, and geopolitical volatility.
The case for evolving business models
Striking a balance between commercial imperatives and sustainability is difficult, but is also becoming unavoidable. The challenge is dual: responding to short-term disruptions, while acknowledging that today’s growth models often threaten long-term viability. Industries dependent on fossil fuels or water-intensive practices, for instance, face operational collapse as regulations tighten and ecosystems degrade.
Compliance as a catalyst, but not the map
The EU’s Corporate Sustainability Reporting Directive (CSRD) now requires companies to disclose how sustainability impacts their strategy, and vice versa (ref. ESRS 2, §48b and f). This regulatory push mirrors sustainability as a strategic necessity.
But compliance alone does not provide a roadmap. How can companies demonstrate growth in a market that does not yet reward or incentivise fully sustainable business models? Our work with Danish companies, from SMEs to C25 firms, indicates that the answer may lie in embedding sustainability into decision-making around strategic trade-offs.
Resilience as the foundation of future business models
The broader issue is that many strategies overlook how sustainability impacts can morph into risks and opportunities over time. When a commercial trajectory exacerbates environmental or social harms, it weakens the very conditions a business depends on, like resource availability and social trust.
That’s why we welcome the ESRS disclosure requirement to link Strategy and Business Models (SBM) to Impacts, Risks and Opportunities (IROs). Resilience requires treating sustainability as the foundation of future business models. Companies that fail to integrate sustainability risk constant catch-up, while those that act decisively will shape the future and reap the rewards.
Bridging sustainability and business decisions
Many organisations find themselves stuck between compliance requirements and the need for commercial growth, without a clear way forward. To that end, we have tested methods with clients to translate sustainability into strategic levers, guided by CSRD’s double materiality lens.
Here’s our evolving framework, which is still a work in progress, but grounded in real-world trials with leading Danish companies.
Our 3-step approach links sustainability IROs to business model transformation and strategic decision-making
Although this approach supports compliance (including ESRS 2 disclosures), the real goal is to help organisations embed sustainability into business logic, shaping strategies that last rather than simply ticking boxes.
We are still learning, refining, and adapting this approach, but we have found that even early-stage insights help prioritise actions and align teams.
What we have learned along the way
Here’s what we’ve learned so far, testing our concept with clients:
1. Collaboration bridges silos between sustainability and commercial teams.
When we asked clients to explore the links between sustainability and commercial strategy with us, it resulted in a valuable space for collaboration. Bringing together sustainability and commercial strategy professionals helped surface different perspectives and creating mutual understanding for each other’s challenges, such as the tension between short-term business goals and long-term sustainability risks.
2. Some strategic choices can unintentionally reinforce negative sustainability trends
If current business models remain unchanged, environmental impacts are likely to increase. Higher revenues often go hand in hand with increased resource use, which can lead to more emissions, water stress, pollution and biodiversity loss.
Example 1: A listed med-tech company
When we facilitated a workshop with a listed med-tech company, it became clear that it’ll be near impossible to decarbonise scope 3 emissions on the current growth trajectory. Since requirements for product quality, costs and regulatory compliance limited options for fundamentally re-thinking the product, the current business model and strategy was set to deem a full value chain decarbonization a near-impossible task.
When the most obvious levers, like product design, aren’t viable in the short term, it can be helpful to step back and explore how the overall strategy and business model relate to these impacts. This broader view can open more systematic paths forward. In such situations, progress may require collective efforts, where industry peers proactively engage with regulators and stakeholders to find solutions. Only this way, joint problems can be addressed and market incentives aligned with more sustainable business models
Example 2: A large Danish media company
When we facilitated a workshop with a large Danish media company, it revealed how strategic choices often come with sustainability trade-offs.
Discussions around implementing artificial intelligence (AI) highlighted this complexity. On one hand, AI may increase energy consumption, on the other, it could also enable more targeted and personalised outputs, reducing overall need for new content production. Beyond environmental impacts, there are also potential social consequences, such as increased polarisation in democratic societies.
These kinds of choices place companies at a difficult crossroads, where commercial decisions must be carefully analysed through a sustainability lens.
3. Pursue opportunities and find value where impact and growth align
While negative correlations between growth and sustainability impacts are often front-of-mind, many companies have started to realise the fundamental link between their services and products and fundamental societal needs.
In a workshop with a leading Danish energy company, it was clear that the decisive build-out of renewable energy solutions will not only future-proof the business model, but also serve to scale positive sustainability impacts while generating attractive returns and growth prospects.
These insights reflect our ongoing attempts to reconcile commercial demands with sustainability imperatives. They do not offer a guaranteed formula but do show that when sustainability is tackled head-on, it can reveal unexpected advantages.
Sustainability is all about asking the right questions
We have showed how linking Impacts, Risks, and Opportunities (IROs) to business models can drive both compliance and competitive advantage. Sustainability isn’t about having all the answers, but to ask the right questions. How will your strategy hold up as preconditions erode? Can growth align with societal needs?
While the path won’t always yield immediate profit, the pressures of climate change, resource constraints, and regulation make inaction a risk to business itself. Sustainability must be embedded as a true value creator – but we’re all still learning. Our approach is evolving, including efforts to integrate quantitative metrics into assessments.
Turn ambition into strategy
Nordic Sustainability can support you in developing a science-based, actionable strategy for long-term value creation. Reach out to our Managing Partner Sven Beyersdorff.
Start your journey with us
Building a future-proof organisation demands strategic foresight. Whether you're refining your sustainability roadmap or starting from scratch, the right strategy makes all the difference.
Author details
Melissa Kälin
Consultant
