The future of business and sustainable development

Three big debates

Within this vast terrain, three big analytical debates are ongoing. First, what counts as value creation, and for whom are firms trying to create it? Is it just financial value for shareholders or a combination of financial and other types of value for a broader set of stakeholders—employees, customers, suppliers, business partners, communities, and governments? Will private profit and social value overlap neatly, as is the case when firms innovate to reduce their material inputs, or are there trade-offs and scope for free riders?

Second, what forms of risk should business executives and board directors worry about: risks to their own firms or broader societal risks resulting from their activities? And which broader societal risks create risks for their own firms?

Third, to whom should firms be accountable—solely to their shareholders or to broader sets of stakeholders? This quickly leads to debates around mandatory reporting and assurance—the items for which firms can and should be held accountable—and how much discretion to leave with firms on their voluntary disclosures.

None of these debates are settled, and each is playing out in different ways across different jurisdictions and industry sectors and with different time horizons. History offers some context. It took ten years from the U.S. stock market crash of 1929 to the establishment of the Committee on Accounting Procedure in 1939 to regularly guide accountants on the interpretation of generally accepted accounting principles. Then, it took until 2001 for the rest of the world to adhere to a common set of International Financial Reporting Standards (IFRS).

Fast forward to 2025, and countries as diverse as Australia, Brazil, Malaysia, Nigeria, Singapore, and Turkey have all announced timetables for publicly listed companies to begin mandatory reporting on the IFRS S1 and IFRS S2 sustainability-related reporting standards. Each jurisdiction has its own specifics, but thanks to painstaking consultations and coordination efforts across countless actors, each is based on the same core standards. In a further recent development, a new international assurance standard was published in November 2024 (as described in a chapter of our book) and was immediately endorsed by the International Organization of Securities Commissions. It will undoubtedly take time for reporting systems to streamline around new practices, and legacy issues of greenwashing and cherry-picking will undoubtedly persist, but the introduction of international standards undoubtedly represents a significant development for the global economy, even if the United States is likely to follow a distinct path in the near term.

Some key insights

In our volume, we asked a range of distinguished authors to provide their perspectives on how such developments will play out across corporate actors, financial actors, policymakers and regulators. The following captures a single leading recommendation from each of the book’s chapters (following our Chapter 1 overview), with respective authors indicated.

Corporate actors

• Ch 2. Challenge corporate leaders to embrace a net positive mindset, giving more to the world than they take, and to publicly disclose goals and pathways for achieving this. (Paul Polman)
• Ch 3. Incentivize large companies and local organizations to help small, medium, and microenterprises to build capacity to act sustainably. (Ndidi Okonkwo Nwuneli)
• Ch 4. Legally require corporate boards to establish and disclose their governance structures and competencies for governing sustainability strategies, risks, opportunities, and performance. (Emily Farnworth and Eldrid Herrington)
• Ch 5. Create precompetitive thematic and sectoral sustainability platforms to shape markets and scale industry-wide standards, resources, and advocacy at global and local levels. (Jane Nelson)

Financial actors

• Ch 6. Translate sustainability goals and metrics into explicit investment commitments or mandates by asset owners. (Sasja Beslik)
• Ch 7. Adjust Basel III risk weights for lending to small and medium-sized enterprises and sustainable infrastructure to reflect the evidence on default risk and loss in developing countries. (Liliana Rojas-Suarez)
• Ch 8. Narrow insurance protection gaps in developing countries through concerted action to integrate risk management into public policy. (Ekhosuehi Iyahen)

Policymakers and regulators

• Ch 9. Broaden acceptance of emerging IFRS standards and ISSB disclosure standards and encourage more jurisdictions to tackle political and technical implementation hurdles. (Richard Samans)
• Ch 10. Agree on rollout of the International Standard on Sustainability Assurance (ISSA) 5000 and strengthen the assurance ecosystem. (Tom Seidenstein and Warren Maroun)
• Ch 11. Learn and share lessons from India’s experience with implementing mandatory requirements for corporate social responsibility financial contributions. (Katsuo Matsumoto)
• Ch 12. Mandate public disclosure of corporate political activities and advocacy-focused thought leadership led or funded by business.  (Alberto Alemanno)
• Ch 13. Build broad political support at a national level for business sustainability through multipronged campaigns, drawing on lessons from Japan. (Ichiro Sato and Kei Endo)

What emerges from these perspectives is that a multi-faceted ecosystem is both essential and continuing to evolve in its approaches to aligning private sector incentives with positive societal outcomes.

Looking ahead

As private-sector firms face increasingly complex and at times contradictory pressures around meeting societal expectations, the worlds of business-related and government-led sustainable development policies and regulations will inevitably overlap. At present, business sustainability standards are largely being set by regulators and accountants, while global finance ministers discuss sustainable finance and the role of business investment and innovation at venues like the G20 and G7 or biannual meetings of the International Monetary Fund and the World Bank. The parallel dialogues need to be more closely aligned.

This volume can help bridge these conversations and, in turn, inform deliberations for the post-2030 global sustainable development goals. Any next-generation goals will need to connect quickly with the headline debates described above and learn from diverse implementation efforts still rolling out around the world. Doing so can help ensure that the global pursuit of firm-level profits adds up to the collective gain of the world’s profit.