We must urgently address the tension between profitability and sustainability

Original article by Lindsay Hooper, The Financial Times

This article by the Financial Times highlights a critical shift businesses must embrace: moving from traditional ESG approaches toward competitive sustainability. While many companies have committed to sustainability efforts, the current ESG framework, focused on voluntary action and disclosures, has not driven the deep changes needed. To create lasting impact, businesses must advocate for market reforms that make sustainable practices economically advantageous, ensuring that sustainability becomes a competitive advantage rather than a burden.

Why Redesigning Markets is Key
The article emphasises that the core problem is not lack of intention but flawed execution. Many businesses approach ESG as an add-on to existing models, which still prioritise short-term profits over long-term resilience. To break this cycle, the market itself must be redesigned to reward climate-neutral, circular, and sustainable practices. Companies that embrace this shift — like those in Sweden’s Hybrit initiative, which pioneers fossil-free steel — position themselves for future success while driving systemic change.

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