The new macroeconomic reality: Implications for sustainability, business, and talent

Sustainability remains one of the most important tools for corporate leaders to leverage for value creation. The new macroeconomic and geopolitical environment has dramatically underscored the importance of stable supply chains, affordable energy security, and agile next-generation leadership. Sustainability leaders are uniquely well-positioned to partner with C-suite teams across functions to position their organizations for long-term success. 

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On our latest Terras member call, Michael Kobori, former Chief Sustainability Officer at Starbucks, and Kurt Harrison, Managing Director and Co-Head of the Global Sustainability Practice at Russell Reynolds Associates, joined moderator Trina Chattoraj Mallik, Senior Advisor at Eco Equity, for a candid, off-the-record conversation on where the leverage points actually are.

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The macro context is real: tighter margins, shorter board horizons, and a political environment that no longer makes sustainability an easy sell everywhere. But what emerged from the conversation was not caution. It was a clear-eyed focus on the current opportunities being presented.

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Lead with the business case. Always.

The most important theme that sustainability leaders can reinforce right now is in how they position their work. Framing sustainability as "the right thing to do" is inherently limiting. What consistently lands: profitability and growth, cost reduction, resilience, and competitive advantage. These are not compromises. They are the actual business case, and they always were.

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The leaders gaining traction are the ones who speak that language fluently. Supply chain stability. Energy cost reduction. Talent retention. Real estate efficiency. If you can attach a number to it, lead with that.

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How you describe your work matters as much as what you do. Talk about business transformation, innovation, how you have stabilized supply chains, reduced costs, developed new products, or opened new revenue streams. The leaders gaining ground are not leading with their sustainability title. They are leading with the outcomes they have driven. That repositioning is not a retreat. It is how you lead from the front.

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The opportunity is bigger than the noise suggests

While political headlines shift, the regulatory and capital landscape tells a different story. California and New York's climate disclosure requirements apply to any large company operating in those states, which is almost all of them. EPR regulation will cover half of all Starbucks US stores by 2030.  In today’s competitive market, companies cannot afford to run different compliance systems depending upon the regulatory environment, so global companies will need to implement the most stringent requirements across markets. 

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Water, waste, and emergency preparedness remain live priorities for local governments across the political spectrum. These issues have not been politicized the way climate has, and that creates opportunity for advancing business and sustainability objectives.  

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On the capital side, nearly $1.6 trillion is currently earmarked globally for sustainable and impact investment strategies. That number is growing. Institutional investors, particularly in Europe, are raising the bar on what they expect from portfolio companies they invest in. Private equity continues to hire sustainability leaders into operational roles, not out of values alignment, but because it improves exit positioning. If your organization has private equity backing or is seeking it, that is a significant source of leverage worth using.

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Energy and AI: where the greatest opportunities are

The global energy transition is accelerating. In 2025, 88% of new US energy generation came from renewables. Not because of policy, but because it is cheaper and faster. The explosion in AI and data center infrastructure is only increasing demand. Powering that infrastructure with renewables is one of the most significant opportunities available to sustainability leaders right now. 

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AI is where sustainability leaders may have the greatest untapped advantage. Boards are under pressure to get AI programs running quickly. Many have launched without involving sustainability or HR in the build, and a significant number have failed as a result. Research cited on the call found that incorporating responsible AI practices from the outset reduces the likelihood of program failure by 28%.

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Sustainability leaders bring something most functions do not: the ability to think across systems and anticipate longer-term consequences. That is exactly what boards need as they navigate AI adoption. It is an advantage worth claiming.

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The momentum has moved 

Some of the most energetic sustainability work is also happening entirely outside large corporations. Circular-economy ventures, AI-driven agriculture, and clean-energy startups are pursuing the kind of systems change that was once the domain of big business. For sustainability leaders looking to stay close to where innovation is actually happening, engaging with this ecosystem is worth prioritizing.

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What members are asking

The Q&A opened up the conversation to the wider group, with members bringing perspectives from across finance, policy, and consumer brands. The questions centered on how to strengthen internal influence, how to position sustainability teams as essential to AI governance, and where private capital is creating the most immediate opportunities.

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Looking ahead

The fundamentals have not changed. Sustainability is a key driver of long-term business outperformance.

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The leaders who can make that case clearly and prove it with numbers are the ones who will shape the next decade of corporate strategy.

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These conversations happen year-round through Terras membership, and in person at Terras Tuscany this June.