Profit on purpose: why sustainability isn’t just the right thing — it’s the smart thing
What central banks, corporate boards, and risk managers are all starting to agree on: sustainability is now financial infrastructure.
For too long, sustainability lived in the margins of business strategy — a feel-good initiative, managed off to the side. But that margin has become the main story.
This week, the world’s financial stewards reminded us that sustainability isn’t just about ethics. It’s about economics. It’s about risk. It’s about survival. And increasingly, it’s about profit.
Three signals. One message: sustainability is now core financial infrastructure.
1. Bank of England tightens climate risk expectations
In a significant move, the Bank of England confirmed that UK banks will face increased supervisory pressure to demonstrate how they are managing climate risks. This isn’t green PR — it’s prudential oversight.
Banks must now show how climate-related risks are embedded into their capital adequacy assessments, stress testing frameworks, and loan books. As one LinkedIn commentator put it, “climate risk is now capital risk.”
Why does this matter? Because the logic is transferable. If climate and sustainability risks affect bank capital, they affect yours too — across lending, investment appetite, and corporate insurance pricing.
2. ECB comes out swinging for CSDDD
The European Central Bank joined the debate on the Corporate Sustainability Due Diligence Directive (CSDDD) — not to advocate ethics, but to defend financial market stability. In a direct rebuttal to lobby groups claiming CSDDD is bureaucratic overreach, the ECB made clear: undisclosed environmental and human rights risks pose systemic threats.
Reputational collapse. Supply chain disruption. Legal liability. These aren’t side effects. They’re core financial exposures.
3. The EU’s omnibus deliberations and the risk of dilution
As the Omnibus discussions continue, one proposal would exempt up to 80% of firms from sustainability reporting by restricting the Corporate Sustainability Reporting Directive (CSRD) to businesses with over 3,000 employees only and worldwide revenue exceeding €450 million. As noted above, the ECB has warned this move could jeopardise transparency and comparability across the EU financial system. From a resilience lens, this dilution undermines the very safeguards needed to anticipate systemic risks.
This tension reflects a deeper political reality: the current European Parliament includes blocs that are increasingly sceptical of broad-based ESG mandates, while the European Commission remains committed to its Green Deal and sustainable finance agenda. The Commission’s strategic objective is clear, to align capital markets with long-term resilience. That means mandatory reporting, not voluntary pledges.
These institutional dynamics signal something important: sustainability is being baked into financial architecture not just by central banks, but by legislators and regulators aiming to future-proof Europe’s economy. The question isn’t whether ESG is material — it’s whether your business is ready to prove it.
So what does this mean for your business?
It’s time to move from sustainability theatre to sustainability strategy.
At Ancoram, we’ve been helping clients confront a different kind of question. Not: “What should we disclose?” But: “Which sustainability initiatives actually improve our profitability?”
Too much of ESG is still built on external pressure — not internal clarity.
That’s why we’ve been building out what we call Profit by Design: a risk-to-resilience framework to help CFOs, controllers, and strategy leaders identify where sustainability contributes to value — and where it’s just noise. The model launches in 8 days’ time - subscribe to get it first.
This isn’t just about carbon. It’s about margin.
We’re looking at the cost of waste, the ROI of safer supply chains, the revenue protection value of governance, and the long-term resilience dividend from taking sustainability seriously — not cosmetically.
Because here’s the hard truth: most sustainability work doesn’t pay off. Not because it can’t. But because it’s poorly designed, poorly implemented, and disconnected from business fundamentals.
“The future isn’t sustainable because it’s regulated. It’s sustainable because it’s resilient. And resilience is profitable.”
That insight is increasingly shared. The latest PwC paper on risk and resilience echoes the same message: risk, resilience, and sustainability need to be seen through a single strategic lens — not three compliance silos.
Regulators are now rewarding firms who build operational resilience by design — not by accident. Those who substitute controls mid-crisis, who can’t track third-party risk, or who don’t integrate ESG into critical product delivery won’t just fall behind. They’ll fall foul.
As the PwC framework rightly notes: we’ve spent too long on the left side of the bowtie — trying to prevent risk events. But in a world of cascading shocks, we now need controls on the right-hand side — the capacity to absorb disruption without breaking.
And that’s what strategic ESG really is: resilience on purpose. Risk control with returns. Profit by design.
We’ll be sharing more on how Profit by Design works in practice — and how it links to CSRD, CSDDD, and real-world business outcomes.
But for now, let this be the takeaway:
If central banks are treating sustainability as a matter of market stability, you can’t afford to treat it as a checkbox.
Sustainability is not a sideshow. It’s the strategy.
First class analysis and particularly the focus of Profit by Design that enables early Bounce Back and minimising disruption via fully integrated and holistic design - stepping away from reaction and addressing how not to be overwhelmed. Professional insurance indemnity will come more to the fore not only via financial protection but also via major brokers such as AON putting ever greater demand to see fully knitted together Risk Resilience and Sustainability.
Mark Evans. GRC expert