Can business reset for climate goals, 10 years on?

COP30 starts in Brazil on 10 November 2025. It marks a decade since the Paris Agreement was adopted by 195 parties in 2015. The Agreement is a global commitment to limit global warming to 1.5°c above pre-industrial levels, but the goal is becoming increasingly out of reach: according to the UN’s World Meteorological Organisation (WMO), 2024 was the warmest year on record and a UN update estimates that “there is a 70% chance that the 5-year average itself will exceed the 1.5 degree threshold.”

So as the climate crisis continues a decade on, the need for imperative action is pressing. Business plays a critical role in tackling global warming through driving innovation, embracing sustainability across operations, shaping policies and influencing greener consumer preferences. But how have businesses risen to the challenge so far, and what is needed to transform their impact in the next decade?

In this article, we draw on the insights of academics working at Cambridge Judge Business School across the field of sustainability, in all its dimensions, to take stock and give their views on how business can better contribute.

Why leadership must move from promises to action

Leadership models for driving sustainable transformation will face a defining test at COP30, warns Chris Marquis, Sinyi Professor of Chinese Management at Cambridge Judge.

The summit’s theme of a Global Mutirão – a decentralised, bottom-up mobilisation of climate solutions – signals a shift toward shared responsibility across governments, businesses, and civil society. “Yet this ambition risks legitimising the very corporate failures that have stalled progress. Many of the companies that will be showcasing their so-called climate leadership at COP30 – Google, Unilever, JPMorgan – have diluted or abandoned their net-zero targets” says Chris.

Embedding sustainability into business structures

Chris calls for a shift from symbolic participation to enforceable accountability, urging leaders to make sustainability a structural priority, embedding them into governance, supply chains, and fiduciary duties – not as just add-ons or branding exercises.

“Leaders at COP30 should be demanding from business verifiable, short-term targets, transparent data, and full value-chain responsibility” he adds.

“Organisationally, most firms still treat emissions as disclosure issues, not structural ones requiring changes in production, procurement and product design … without a pivot from voluntary to binding action, COP30’s focus risks entrenching another decade of corporate greenwashing disguised as progress.” 

To make this pivot, leaders who embrace and nurture innovation will be better positioned for success. Innovation is a process that helps organisations, whether businesses or governments, find novel ways of generating value based on their strategic priorities. And this is what we need: innovation to drive systemic change and align business success with climate success.

Leaders at COP30 should be demanding from business verifiable, short-term targets, transparent data, and full value-chain responsibility.

Chris Marquis, Sinyi Professor of Chinese Management

Profitability and sustainability: lessons from industry leaders

Some companies have demonstrated that profitability and sustainability can go hand in hand. Stelios Kavadias, Margaret Thatcher Professor of Professor of Enterprise Studies in Innovation and Growth, points to Interface Inc., a carpet manufacturing company that has become a global leader in sustainability.

In an industry known for its severe environmental impact, Interface has pioneered solutions that align profitability with sustainability “with sheer focus on how to generate ideas that were supporting greener goals, the executive will to prioritise, fund, experiment and adapt such ideas in order for them to deliver the intended objectives, and the necessary patience and tolerance, time wise and resource wise, for the funded innovative projects to be successfully delivered” says Stelios.

Can innovation scale across industries?

But can such individual efforts scale to drive significant collective results at industry levels over the next 10 years? “This is a much harder question to answer” says Stelios. “Companies operate within competitive environments and their quest for differentiation oftentimes slows down the possibility that they will all pursue sustainable goals.”

To overcome this, Stelios highlights 2 key factors: first, the imitation effect, whereby successful innovators inspire others to follow suit and gradually green and sustainable business models and strategies are replicated and standardised.

“Second, we need to change the definition of success – something that governments and regulators can mostly enable.”

Companies operate within competitive environments and their quest for differentiation oftentimes slows down the possibility that they will all pursue sustainable goals.

Stelios Kavadias, Margaret Thatcher Professor of Professor of Enterprise Studies in Innovation and Growth

The challenges for startups in balancing growth and sustainability 

Startups, often viewed as the engine-room of innovation, face challenges in how to balance growth with environmental responsibility.  “Ventures may start with good intentions to create a positive impact for the environment, but often they are pushed down the road of ‘growth at all costs’, particularly those with external investment” says Monique Boddington, Management Practice Associate Professor and Director of the Master of Studies in Entrepreneurship Programme at Cambridge Judge.  

This focus on short term optics can lead to externalising costs and gaming metrics that grab attention rather than delivering real outcomes.

“Today’s ‘grow fast, exit faster’ playbook narrows founders’ attention to investor returns and global scale, creating blindness to ecological spillovers” adds Matthew Grimes, Professor of Entrepreneurship and Sustainable Futures and Co-Director of the Entrepreneurship Centre.

Today’s ‘grow fast, exit faster’ playbook narrows founders’ attention to investor returns and global scale, creating blindness to ecological spillovers.

Matthew Grimes, Professor of Entrepreneurship and Sustainable Futures

Resetting the startup playbook: incentives and guardrails for sustainability 

Monique and Matthew call for a reset: “Two levers matter most: incentives through capital and guardrails through policy” says Monique. “Startups need access to patient vehicles that back durable growth and plan on multi-year deployment, take account of broader accounting metrics (like lifecycle impact accounting) and investment rewards linked to environmental (verified) outcomes. These de-risk portfolios, reduce boom-and-bust, and build resilient cash flows.”  

A rebalance toward long-term performance, locally attuned stakeholder value requires “systemic guardrails, co-ordinated incentives and monitoring” adds Matthew, “so startups can balance three persistent value-related paradoxes: short vs long-term, global vs local, private vs collective.”

The path forward for responsible entrepreneurship 

Matthew adds examples such as anticipatory regulation and regulatory sandboxes (to surface risks without freezing innovation) and ‘conscious scaling’ checklists to track distributed externalities. He also highlights the potential of community venture funds, platform co-operatives, and stakeholder-governed structures to align ownership with local benefits.

Both agree the next 10 years require an increase in clear, enforced rules that make responsible choices the default. “Growth is a tool, not the goal” says Monique. “Align money, rules and capability, and scaling a venture will scale environmental benefit too.”

Matthew echoes this sentiment: “the next 10 years should shift finance, policy, accelerators, and founders toward responsible entrepreneurship by deploying these guardrails in concert, not as silver bullets, to make responsible scaling the default and render environmental externalities a core design constraint of entrepreneurship, not a downstream apology.”

Growth is a tool, not the goal…align money, rules and capability, and scaling a venture will scale environmental benefit too.

Monique Boddington, Management Practice Associate Professor

Can AI lead the green transition and what are it’s hidden environmental costs?

At the forefront of innovation is Artificial intelligence (AI), often held up as the game-changer for accelerating sustainability outcomes. Its ability to optimise power grids, food systems, logistics, and buildings has been well documented. However, “we must carefully examine AI’s physical infrastructure, the power it consumes and its exponentially growing resource demands” warns Virginia Leavell, Assistant Professor in Organisational Theory and Information Systems. 

Virginia highlights the pressing reality of global water shortages and her own work studying water distribution in drought-stricken regions gave her first-hand experience of the extreme shortages facing parts of the world. “There’s a reason that billionaires have been acquiring aquifers worldwide and experts have predicted that future world conflicts will erupt over water access” she says.

“Countries are racing to build AI data centres, and communities afflicted by them are experiencing frequent blackouts and prolonged water shortages … yet tech CEOs continue promising that AI will solve the climate crisis, perpetuating utopian pabulum while concentrating wealth among a small elite.”

Virginia suggests that without democratic control over AI development and accountability for its resource consumption, there is the real possibility that AI will contribute to, rather than solve the climate crisis.

There's a reason that billionaires have been acquiring aquifers worldwide and experts have predicted that future world conflicts will erupt over water access.

Virginia Leavell, Assistant Professor in Organisational Theory and Information Systems

Lessons from history: technology and inequality

Virginia references Acemoglu and Johnson’s ’Power and Progress’, which helped earn them the 2024 Nobel Prize in Economics and demonstrated a thousand-year pattern: “technological advancement serves elite interests unless civil society intervenes” she says. “From medieval Europe to early industrial England, prosperity failed to reach ordinary people without collective action.

“If we apply this lesson to the climate crisis, the conclusion is unavoidable. Without intervention, AI will accelerate climate catastrophe rather than solve it. We can already see this happening in real time” she warns.

Frugal AI: designing smarter systems for sustainability

Whilst a strong advocate for the value of AI, Serish Venkata Gandikota, Co-Founder and Co-Director of the Frugal AI Hub at the Centre for India and Global Business at Cambridge Judge, also highlights the energy appetite for AI computing power is rising fast.

“The International Energy Agency estimates that electricity use by data centres will roughly double to around 945 TWh by 2030, almost 3% of global electricity demand.” He also references a MIT analysis that found that around 95 per cent of corporate generative-AI pilots fail to deliver measurable value, “revealing a wider efficiency gap, that is economic as well as environmental.”

Serish advocates strongly for ‘Frugal AI’: designing smaller, context-aware models that maximise efficiency and ensure that every unit of energy or cost contributes to meaningful outcomes. “Our new White Paper, Adoption Labs and hackathons demonstrate that efficiency, inclusion and impact can coexist when AI is treated as part of the sustainability system, not apart from it.”

“Meeting the Paris goals demands both smarter algorithms and smarter infrastructure. A practical way forward is to link frugal-by-design AI with dedicated low-carbon microgrids for data-intensive clusters, separating their load from domestic supply while ensuring 24/7 clean-power matching and waste-heat reuse for local communities. When designed this way, the world’s growing compute capacity can strengthen, rather than strain, the transition.”

Meeting the Paris goals demands both smarter algorithms and smarter infrastructure. A practical way forward is to link frugal-by-design AI with dedicated low-carbon microgrids for data-intensive clusters, separating their load from domestic supply while ensuring 24/7 clean-power matching and waste-heat reuse for local communities.

Serish Venkata Gandikota, Co-Founder and Co-Director of the Frugal AI Hub at the Centre for India and Global Business

Why consumer trust is key to sustainable business success

While business leaders and innovators may do their part to drive climate action, where does the consumer fit into the fast progress that is required? The success of sustainable practices is inextricably linked to consumer behaviour and the trust they place in these initiatives.

Crucially, CMOs need to understand that consumers, when making purchase decisions, do not necessarily accept that sustainability can compromise other attributes such as price and quality. “While consumers might express interest in and concern for sustainability in surveys and interviews, the moment of truth of purchase decision is often a more complete consideration.” Says Vincent Mak, Professor of Marketing and Decision Sciences at Cambridge Judge.

Vincent recalls past research that suggests consumers often have quality discounting perceptions against sustainable products, in that they infer that products marketed for their sustainability features might be less good on quality than otherwise. “Therefore, firms marketing sustainable products must also communicate to consumers that major attributes such as quality and price of their products are just as good as competitors’, if not even better. Sustainability can be a point of differentiation to make an offering stand out in the market, but there must be competitive parity in major attributes such as price and quality.”

While consumers might express interest in and concern for sustainability in surveys and interviews, the moment of truth of purchase decision is often a more complete consideration.

Vincent Mak, Professor of Marketing and Decision Sciences

Building trust to combat misinformation and greenwashing

The critical factor is trust, says Vincent. In a world of misinformation and high uncertainties, firms must make a special effort to establish trust with stakeholders on its sustainability and other purpose-driven initiatives. “Firms need to ramp up efforts to build trust with consumers, such as through influencers with high credibility … with there being so many debunked greenwashing cases, consumers might not easily trust a firm’s marketing about its environmental sustainability initiatives.”

Ultimately, lack of consumer trust will hinder sales, and financial-profit-oriented shareholders are unlikely to see the value in sustainability initiatives. “Even for shareholders who might endorse sustainability for its own sake, trust is needed to make them willing to commit investment” concludes Vincent.

Financing the climate recovery

Leadership, innovation, technology and consumer trust are pivotal to climate recovery, but none of these can succeed without the right financial systems in place, providing the resources needed to reach the climate goals set out a decade ago.

Investors play a critical role, but how they approach it matters. Many investors focus too much on divestment of shares from polluting and irresponsible business, which can be counterproductive, says Elroy Dimson, Professor of Finance. “Divestment involves hollow virtue signalling, invites greenwashing and has negative unintended consequences.”

Also, there is the problem of environmental rankings. “It is not clear which companies should be targeted for change – rankings for environmental threat are ambiguous. There is little consensus about which companies should be divested.”

Elroy is clear on the future path: “a better way to effect change is through direct engagement with investee companies.” His past studies have found that investors can leverage their ownership position to push companies toward ESG improvements.

“We studied 1,654 global engagements involving 224 investment firms who targeted businesses in 63 countries. These engagements were co-ordinated by the UN-sponsored Principles for Responsible Investment. We showed that a structured engagement strategy helped institutions achieve their objectives, increased future fund flow, and enhanced the performance of target companies.” 

A better way to effect change is through direct engagement with investee companies.

Elroy Dimson, Professor of Finance

Working together for a sustainable future

Whatever the business domain, creative approaches surely hold the key to transforming good intentions into meaningful solutions that help meet the Paris Agreement goals of limiting global warming to manageable levels. Ten years on from Paris, the insight of Cambridge Judge academics and other experts reveal the challenges but also some innovative routes to pursue to embed sustainability objectives into business, policy and the choices made by individuals.

As Virginia Leavell asks, “the question is not whether to act, but whether we have the will to act now, and if we will make demands great enough to effect real change.”

Businesses, policymakers, and society must rise to this challenge, embracing collaboration, accountability, and bold action to create a sustainable future.