We measure sustainability - now let’s use it to inform financial decisions

Companies know more and more about their sustainability risks and opportunities, yet still struggle to quantify their financial value. In a recent international survey, 72 per cent of executives say they understand their company’s sustainability strategy and performance. Only 19 per cent use robust methods to quantify its financial and operational effects. That gap needs to close. The next step is not more reporting, but better business decisions: what does it cost to wait, and where can taking action create value?

From words to data

Reporting requirements have driven improvements in sustainability data and processes in recent years. Companies now have a stronger basis for assessing how sustainability risks and opportunities affect their business.

The EU’s Omnibus package has taken some of the momentum out of sustainability work at certain companies. It is easy to lose pace or treat the work that remains as a side project. Some may also be asking: was it worth undertaking major organisational initiatives and investing in new digital tools?

From data to action

The focus now needs to turn to the benefits of that work and how to realise them. What can we do with all the knowledge and data we have gathered?

When business leaders make investment decisions, they routinely consider returns, payback periods and risk. Their calculations rely on assumptions about future revenue and costs, even when the outcome is uncertain. Yet sustainability analysis often stops at emissions, targets and identified risks.

The next step is to use that information to inform business decisions. If a company knows that a sustainability risk is material, what should it do about it? What is the cost of inaction? Which investments should take priority? Which risks affect future revenue or costs? Where are the new business opportunities? How should capital and resources be allocated? Sustainability and financial data need to be brought together to answer these questions.

The gap between sustainability knowledge and financial value

KPMG’s June 2026 report, Closing the sustainability valuation gap, draws on survey findings that highlight a clear gap between companies’ understanding of sustainability and their ability to demonstrate its financial value:

• 72 per cent of executives say they understand their company’s sustainability strategy, metrics and performance, or are familiar with the key aspects.
• Only 19 per cent of respondents use robust methods to quantify how sustainability affects financial outcomes, operational improvements and innovation.

Companies therefore need to understand what sustainability means in financial terms: what do we gain by acting, and what does it cost us not to act? This requires better data, collaboration between sustainability and finance teams, and valuation methods that can accommodate uncertainty in the underlying information.

Shared responsibility within established management processes

Sustainability teams, finance and operational teams need to work together to ensure sustainability data informs financial decisions. Sustainability teams bring an understanding of impacts, risks and dependencies. Finance provides expertise in financial modelling and valuation. Operational teams identify possible actions and assess what it would take to implement them.

Together, they need to produce analysis that feeds into established investment processes, budgeting and business planning. Responsibilities need to be clear: who prepares the analysis, who makes the decisions, and who checks whether the actions deliver the expected financial and sustainability outcomes? This gives sustainability a practical role in how the company sets priorities and allocates resources.

Not everything needs a price tag

Not every impact on people and the environment can or should be monetised. Assessing the financial implications of a sustainability issue for a company is also different from placing a value on its impacts on people and the environment. Companies must meet their responsibilities and legal obligations even when doing so does not generate a positive financial return.

But where a sustainability issue affects energy costs, raw material availability, supply chains, customer requirements, investment, insurance costs or future revenue, companies need a better understanding of those connections.

The point is not to put a price on everything. It is to make better decisions with the knowledge we already have.

The next step is to use sustainability information in investment appraisal, risk management and business decisions, bringing it together with financial data so that it shapes the choices companies make.