Published March 19, 2026 in Sustainability • 10 min read • 
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When Paul Polman took over as CEO of multinational consumer goods giant Unilever in 2009, he took a gamble, premised on the idea that companies do well by doing good. Polman scrapped “short-termist” quarterly earnings guidance and launched the Unilever Sustainable Living Plan, perhaps the boldest sustainability initiative ever attempted in corporate history. The goal? “To decouple growth from our environmental impact, while increasing our positive social impact.” In doing so, the Dutchman believed he could double the size of the business.
For a time, it looked like the bet had paid off. Unilever’s reported regular sales growth during Polman’s 10-year tenure delivered strong shareholder returns and outpaced the market. The company became the darling of ESG-minded investors and policymakers alike. But after Polman stepped down in late 2018, the wheels on the sustainability bus started to wobble. Revenue growth slowed, margins came under pressure, and the share price drifted. Major investor Terry Smith summed up the frustration with Unilever’s obsession with “purpose”, accusing the company of prioritizing sustainability “virtue signaling” over product quality and competitiveness.
“A company which feels it has to define the purpose of Hellmann’s mayonnaise has, in our view, clearly lost the plot,” Smith quipped in his 2022 annual letter to investors in his fund, Fundsmith.
By the time Hein Schumacher became CEO in mid-2023, Unilever had received the message and was changing tack. Sustainability goals, Schumacher told investors, had become too aspirational and too diffuse. Sustainability was important, he said, but not before “unmissable product superiority.” It looks like new CEO Fernando Fernandez, with a proclaimed focus on brands and the bottom line, will double down on this approach.
Sustainability has not struggled because customers are immoral or because capitalism is broken. It has struggled because companies miscalculated what customers value.
Unilever’s story offers a cautionary tale for disciples of the flawed belief that companies are destined to do well as long as they do good. For more than two decades, this traditional sustainability gospel has been treated as an article of corporate faith. The logic seemed self-evident: if companies were kind to the planet and society, customers would reward them, employees would rally behind them, and profits would follow. Yet, in recent years, we have seen many companies quietly roll back sustainability commitments. They’ve scaled down their ambitions or reframed their sustainability narratives.
The backlash is blamed on cynical markets, short-term investors, or political polarization and lobbying. But we believe that overlooks a fundamental point. Sustainability has not struggled because customers are immoral or because capitalism is broken. It has struggled because companies miscalculated what customers value and why they buy what they buy.
In our forthcoming book, Clean Winners: Sustainability Strategy That Puts Customers First (Harvard Business Review Press, March 2026), we argue that the next phase of sustainability strategy will belong to companies that treat sustainability not as an ideology, but as an innovation and business design challenge: where can environmental or social benefits be delivered in ways that customers value and that businesses can profitably sustain?
Traditional corporate sustainability practices (what we call Sustainability 1.0) rest on a set of assumptions that feel intuitive and believable. They include:
In reality, sustainability is never the primary reason to buy something. Customers do not buy detergent to save the planet; they buy it to clean their clothes. They do not buy cars to fight climate change; they buy them to have the convenience of on-demand mobility. Even most environmentally conscious customers prioritize performance, affordability, and convenience when making purchase decisions.
When sustainability competes with customer value, customer value wins. Faced with a choice between a more sustainable product and a cheaper or better-performing alternative, most vote with their wallets. Take, for example, research from McKinsey & Company in 2024. Its study asked, “How much will consumers really pay for green products?” The average price premium for three staple products (yogurt, shampoo, and a T-shirt) making sustainability claims was just 2.2%. While many consumers claim to care about sustainability, their actions don’t quite match those good intentions. A survey by the European e-commerce firm Zalando found that 60% of consumers said transparency about sustainability mattered to them, but only a third of that total actively sought “green” information when buying products.
The Sustainability 1.0 mindset implicitly assumed that customers would trade value (accepting higher prices, lower performance, or greater inconvenience) for sustainability. In practice, only a small niche appears willing to do so.
The inconvenient truth is that Sustainability 1.0 has produced weak or vague links to general business performance. In a 2018 “second-order” meta-analysis of previous meta-analyses yielding one million observations, Timo Busch and Gunnar Friede found that the weighted average correlation between doing good and doing well was just 0.12.
The problem isn’t sustainability per se but rather a flawed business model that asks customers, employees, and investors to absorb trade-offs without delivering commensurate value.
Clean winners show that the future of sustainability is not louder preaching, bigger targets, or thicker reports, but leadership that designs for value first and lets sustainability follow.
Today, across industries, growing numbers of companies are quietly converging on a different logic, which replaces sustainability as moral persuasion with innovation and value creation. Here are a few examples of what we call Sustainability 2.0:
Schneider Electric helps customers reduce energy use, emissions, and operating costs through electrification, automation, and digital energy management solutions. Sustainability outcomes emerge as a byproduct of what customers value most: reliability, efficiency, and lower operating costs. Rather than asking customers to pay for virtue, Schneider monetizes sustainability through productivity gains, software, and services.
Michelin has reframed sustainability around durability, safety, and total cost of ownership rather than environmental claims alone. By designing tires that last longer and reduce fuel consumption, it lowers lifecycle costs for customers while reducing material use and emissions. Sustainability succeeds here because it enhances performance attributes customers care about, turning environmental benefits into an economic advantage rather than a trade-off.
GEA, one of the world’s largest systems suppliers for the food, beverage, and pharmaceutical sectors, has reoriented sustainability away from incremental compliance to a catalyst for step-change innovation in its food and dairy processing equipment. The result is GEA’s Add Better label, applied to new products that are demonstrably more resource-efficient. Sustainability succeeds here not because customers are persuaded by environmental messaging, but because they are offered equipment that costs less to run and performs better.
What unites these companies is a shared strategic insight: sustainability scales only when it makes offerings more competitive. This is the essence of Sustainability 2.0: a fundamental strategic inversion that replaces, “How can we make our offerings more sustainable?” with, “How can we use sustainability to improve the performance of our products, sell them for less, make them cheaper to use, or all of the above?”
The question for leaders is not how ambitious their sustainability goals are, but whether sustainability makes their offerings unambiguously better. When it does, customers adopt it, markets reward it, and the sustainability agenda can grow. Clean winners show that the future of sustainability is not louder preaching, bigger targets, or thicker reports, but leadership that designs for value first and lets sustainability follow.
The logic for Sustainability 2.0 might sound straightforward, but delivering it is another matter. Why? Because it calls for a different approach to leadership: sustainability efforts are destined to fail if leadership decisions and behaviors are at odds with the new logic.
Sustainability, by definition, introduces unwelcome tensions and trade-offs. It sits at the intersection of regulation and innovation, activism and profitability, long-term resilience and short-term pressure. It divides customers into those who care deeply and those who do not care at all. It invites scrutiny from investors and NGOs. For many leaders, this feels like a complication layered onto an already complex job.
Over two years of research, we have identified five leadership principles that executives can adopt to manage these tensions and transform their organizations into “clean winners.”
1. Start as an activist, but quickly stop preaching
Every sustainability transformation needs an activist phase. Leaders must initially behave like missionaries. They need to create urgency, legitimize trade-offs, and signal that sustainability matters. Without this early push, employees will not change entrenched behaviors.
However, this phase must be short-lived. Too many leaders remain preachers for too long. They continue to frame sustainability as a moral cause rather than a commercial discipline. When this happens, market reality gets sidelined, dissenting voices are silenced, and sustainability drifts away from value creation. Leaders become enthusiasts rather than strategists.
This dynamic can also help to explain today’s “greenlash.” In many companies, sustainability resources are increasingly consumed by reporting and compliance rather than innovation. Regulatory gravity pulls firms toward box-ticking behavior. Leaders who fail to re-anchor sustainability in business outcomes reinforce the perception that it is a cost center rather than a growth engine. Clean winners make the transition deliberately. They use activism to open the door and then ground sustainability in the language of P&Ls, margins, and customer economics.
Johnson Controls shows what this kind of grounded leadership looks like in practice. The building technology conglomerate has steadily shifted R&D resources toward sustainability innovation, reaching 90% of R&D effort by 2023. The result: 57% of revenues now come from sustainability-related offerings, and the company has delivered over $8.4bn in long-term cost savings to customers.
The lesson: If sustainability cannot evolve from early activism to survive contact with commercial scrutiny, it does not belong at the center of strategy.
2. You don’t need a sustainability strategy
Almost two-thirds of global companies have a sustainability strategy. Most are making a fundamental error. If sustainability’s goal is to increase customer value, then that value should already be embedded in your strategy. You don’t need a parallel sustainability strategy; you need a sustainability lens focused on your existing strategy.
Standalone sustainability strategies often create confusion rather than clarity. They introduce competing objectives, duplicate governance, and force managers to reconcile sustainability targets with commercial ones after the fact. The result is predictable: sustainability is perceived as an add-on, a constraint, or a corporate obligation.
Clean winners take a different approach. They add a sustainability lens to product, brand, and business-model strategy. At consumer goods firm Reckitt, for example, sustainability is embedded at the brand level, forcing teams to examine how environmental and social considerations enhance the product’s intended purpose.
Hilti embedded sustainability into its business model by shifting from selling tools to providing tools as a service. By retaining ownership of equipment, optimizing usage, extending product life, and improving recycling and reuse, it reduces material intensity and waste while lowering the cost of ownership for customers.
The lesson: Leadership here is about subtraction, not addition. The goal is not more strategies but fewer, better-integrated ones.
3. Building a ‘sustainability culture’ is a distraction
A decade ago, leaders were told to build a digital culture. Then came the push for agile culture. Now it’s sustainability culture. Next, it will be AI culture. These serial assignments are exhausting and counterproductive.
The advice to build a sustainability culture might sound sensible. But every successful organization needs the same core traits regardless: diversity of opinion, openness, empathy, and collaboration. These are not unique to sustainability—they define any high-performing culture.
Our advice is simpler: focus on building a culture of customer-centricity. Companies closest to customers win.
The lesson: Treat sustainability as a tool for serving customers better, not as cultural theater.
4. Coherence beats opportunism
Open any corporate sustainability report, and you’ll find claims across many UN Sustainable Development Goals. But strategy is about choices. Doing good everywhere rarely creates value anywhere.
Opportunistic initiatives confuse customers, dilute credibility, and invite accusations of greenwashing. Clean winners focus on sustainability problems that have a clear link to their value proposition.
The lesson: Coherence requires saying no—even to worthy causes.
5. Stop setting CSOs up to fail
Few roles are more misunderstood than the Chief Sustainability Officer. CSOs are often tasked with everything, but given limited authority.
Clean winners redesign roles so sustainability is inseparable from innovation and product leadership.
Enel illustrates this through “Innovability,” combining innovation and sustainability into one unit, embedding sustainability directly into product and technology decisions.
The lesson: Link sustainability to customer value creation to turn it into a competitive discipline.
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