Historically, sustainability has been a siloed component of business operations. It was carved out of a compliance or marketing budget and disconnected from production, P&L, and the supply chain. But today, that’s changing with a 2025 Deloitte report showing 83% of C-suite executives increasing sustainability spending in the last 12 months.

And there’s a reason for that.

Business leaders now understand that sustainability initiatives often pay for themselves, lowering costs, benefiting productivity, and ensuring continuity in supply chains. As a result, it’s become an operational driver rather than an afterthought.

Why the Shift Is Happening

Perhaps sustainability was always destined to become an operational driver, but several trends in modern business are making it more essential in everyday operations. Here are a few to consider.

• Rising Energy Costs: The demand for electricity climbed 2% year on year, fueling higher prices.
• Capital and Lending Market Considerations: Investors and lenders increasingly consider sustainability in financing terms, pushing operational leaders to make it an accounting priority.
• Regulatory Compliance Is Tightening: Changes in the compliance spectrum have made sustainability a measurable standard rather than a voluntary selling point.
• Technology Supports Data Collection: AI helps business leaders track energy use, making it easier to control and report.
• Large Buyer Requirements: Several large enterprise customers make sustainability part of the requirement when working with smaller businesses and suppliers.

How Sustainability Improves Operations

Business trends may fuel the shift to sustainable operations, but here are some reasons why it makes perfect sense:

• Energy Efficiency: Environmental practices lower costs, improving a company’s operational financial outlook.
• Waste Reduction: In addition to helping lower costs, waste reduction reduces time spent sourcing supplies.
• Supply Chain Resilience: Diversifying suppliers based on climate and resource risk avoids disruptions.
• Predictive Maintenance: Sustainability monitoring often uses the same sensors for predictive maintenance, ensuring equipment problems are found early, reducing downtime and expensive repair costs.
• Workforce Productivity and Retention: Workers (especially younger generations) often appreciate companies that prioritize sustainability in operations, leading to better output and increased loyalty.

Measuring ROI for Optimal Results

Sustainability can only be truly effective when measured over time. The following metrics typically apply:

• Cost Per Unit of Energy, Water, and Waste: These should be adjusted for output, considering growth, which may otherwise account for inflated numbers
• Operational Uptime and Asset Efficiency: Conduct before-and-after comparisons once changes have been implemented
• Supply Chain Disruptions: In addition to the frequency of incidents, consider how fewer disruptions impact costs and productivity
• Energy Cost in Terms of COGs: Track energy costs as a percentage of direct production expenses, and watch how that percentage changes over time.
• Link to EBITDA: Translate sustainability wins based on their impact on the operating profit, considering earnings before interest, taxes, depreciation, and amortization.

Common Barriers to Operating Sustainability

Sustainability is becoming more essential to business operations, but barriers exist. Here are some common obstacles businesses face:

• Siloed Sustainability and Operations Teams: Sustainability goals can only be achieved when operations work closely with environmental oversight departments, ensuring processes are adjusted for efficient output.
• Short-Term Capital Allocation Pressure: Companies tend to favor decisions that offer a quick payout, and sustainability efforts often don’t qualify.
• Fragmented Data: Many companies fragment utility bills, meters, energy and water spend, and waste, making it difficult to see the big picture.

How COOs are Structuring for Success

Challenges exist, but COOs will see high success rates for their sustainability efforts by implementing the following practices:

• Sustainability metrics should exist on the same dashboard as everything else, to ensure business leaders can determine how it impacts other aspects of operations.
• Cross-functional governance brings operational, financial, and sustainability leaders together, helping them work towards the same goals.
• Phased Implementation reduces upfront spend, helps companies see paybacks sooner, and frees up capital for high-priority projects.

Looking Ahead: What’s Next for Operational Sustainability

Sustainability has come a long way in the business landscape, and it will continue to grow, affecting organizations in the following applications.

• AI and IoT Resource Optimization: These technologies will continue to expand, supporting reporting and monitoring efforts.
• Scope 3 Emissions: Sustainability will become more than an internal issue- businesses will also be accountable for working with suppliers that prioritize environmental initiatives.
• Sustainability as a Capital and Talent Magnet: A business’s sustainable profile will be increasingly considered in business and employment relationships.

Want to learn more about how sustainability can impact your business operations? Sign up for our newsletter today.