New research reveals that nine in ten CFOs will increase sustainability investment in 2025, with 69% expecting higher returns than traditional investments.
More than two-thirds of CFOs expect sustainability investments to outperform conventional spending, signalling a significant shift in how businesses view environmental initiatives’ financial returns.
The findings come from a global survey of 500 CFOs conducted by Kearney and We Don’t Have Time in the UK, US, UAE, and India. The survey revealed that 92% plan to increase their sustainability investment in 2025.
Almost 40% of CFOs intend to allocate between 2.1% and 2.5% of revenue to sustainability initiatives, while 23% aim to invest even more – marking a significant commitment to environmental programmes despite ongoing economic uncertainty.
The research highlights CFOs’ unique position to influence long-term business strategy by controlling financial resources. The findings demonstrate that they are increasingly using this influence to advance sustainability initiatives.
The research also found that CFOs are prioritising projects that deliver tangible, near-term emissions reductions while also generating immediate cost savings or value creation. Top investment priorities include adopting sustainable materials, improving material efficiency, reducing waste, enhancing energy efficiency, and ensuring ESG regulatory compliance.
Additional focus areas encompass workforce education, business travel reduction and carbon offset purchases, reflecting a growing recognition that sustainability investment can drive environmental and financial benefits.
Notably, 65% of surveyed CFOs report they are already measuring the financial implications of failing to act on sustainability, with US companies leading this analytical approach. This suggests growing awareness that investment decisions must consider opportunity costs and risk mitigation.
However, the research identified some hesitancy around longer-term strategic investments where environmental or financial returns may take years to materialise. Despite this, many CFOs expressed interest in sustainability innovation partnerships for 2025.
The findings challenge the narrative pushed by some activist investors seeking to weaken corporate sustainability targets, as seen recently at BP and Unilever. Instead, the survey indicates that CFOs increasingly view sustainability as a value driver rather than a cost burden.
To accelerate progress, the report recommends that CFOs take five key actions:
- reframe sustainability as a strategic value creator
- utilise green financing instruments
- improve sustainability ROI measurement
- embed environmental considerations across operations
- participate in industry collaboration for systems change
Less than 4% of surveyed CFOs plan to allocate under 1% of revenue to sustainability initiatives in 2025, indicating that environmental investment has become mainstream in corporate financial planning.
The survey suggests that despite geopolitical tensions and economic pressures, businesses find it easier to build compelling business cases for sustainability projects that deliver environmental and financial returns.
This shift in CFO perspectives on sustainability investment could mark a turning point in corporate climate action, as financial leaders increasingly recognise the strategic importance of environmental initiatives in driving long-term business success and risk management.
With major companies committing substantial revenue to sustainability programmes, the research indicates that environmental considerations have moved beyond compliance to become core business strategy and financial planning elements.
