Sustainability Is Becoming a Compliance and Risk Function. Here's Why That Makes Life Harder, Not Easier, for Suppliers.
If you only read the headlines, corporate sustainability in 2026 looks like it is in retreat. Teams are smaller. Budgets are shrinking. Public messaging has gone quiet. Commitments are being scaled back. For a mid-market manufacturer that has spent the last two years fielding an increasing volume of sustainability questions from big customers, all of that can read like permission to exhale.
Three recent data points, taken together, point the other way. Sustainability is not leaving the building. It is being triaged down to its hardest, most obligatory core and handed to the two functions inside a company that tolerate the least vagueness: compliance and enterprise risk. For suppliers, that shift raises the bar on the data you are asked to provide rather than lowering it.
What looks like a pullback is really a sharpening of focus
A survey of 124 senior sustainability professionals at companies with at least a billion dollars in revenue, published in mid-2026 by GlobeScan and BSR, captures the prevailing mood. Budgets and teams at the largest firms have tightened in places, a majority say the next phase of the work will be defined by fewer, clearer priorities, and most respondents expect at least one of their company's commitments to be scaled back.
It is tempting to read all of that as a pullback. It is more accurate to read it as companies getting disciplined about where sustainability earns its keep. As we have argued before, resetting a climate target is not a scandal but a sign of how the business case works, and a company that narrows its commitments is usually not walking away from the work. It is doing the math and concentrating effort where the return is clearest. The GlobeScan and BSR data shows what that concentration looks like in aggregate.
The broadest data cuts against the fading story directly, and the disconnect is worth sitting with. The 2026 Sustainability Census from the recruitment firm Acre and the consultancy SLR, the largest survey of its kind with more than 2,300 practitioners across 76 countries, found hiring and spending holding steady even as the business and political climate turned harder. Nearly two thirds of respondents said their budgets had grown or stayed flat over the past year, teams were far more likely to have expanded or held their size than to have shrunk, and senior sustainability titles nearly doubled their share of the profession between 2024 and 2026. The narrative says the function is fading, while the money, the headcount, and the seniority all say it is settling in. A function that was genuinely being abandoned would not be adding budget, staff, and C-suite seats at the same time. It looks less like a field in decline than a field being absorbed into the core of how companies are run.
The revealing question is not what companies are trimming but what they are protecting. Compliance and reporting are now the single biggest priority for these teams, with regulatory requirements cited as the top driver of corporate sustainability effort by more than three quarters of respondents, up from less than a third a decade ago. Customer and consumer demand has climbed just as sharply over the same period. The commitments most often let go are the discretionary and reputational ones, while the regulation-driven and customer-driven work, which is precisely the work that generates data requests to suppliers, is exactly what companies are funding and keeping. The story is not less sustainability. It is sustainability aimed harder at the places where it is mandatory and where it creates measurable value.
This is the same pattern we described when we wrote about the ISSB becoming the global baseline: sustainability is going quieter in public while the data machinery underneath keeps running. What the GlobeScan and BSR numbers add is a sense of where that machinery now sits.
From storytelling to risk register
The survey found something more structural than a budget squeeze. Senior leadership increasingly views sustainability as a risk-management and compliance function, and integration between sustainability teams and the finance, legal, and risk sides of the business has deepened over the past decade. Sustainability is being absorbed into the machinery that companies already use to manage things they cannot afford to get wrong.
Suntory Global Spirits is a vivid example. In early 2025 the company put its lead environmental executive, Kim Marotta, in charge of enterprise risk management as well. The logic is simple once you see it: for a spirits business, water is not a feel-good talking point but a core input, and its long-term availability is one of the company's most significant business risks. As Marotta has put it, no water, no whiskey. Managed that way, water scarcity sits on the enterprise risk committee alongside supply chain disruption, geopolitical tension, and digital transformation, and that committee includes the CEO and the heads of supply chain, finance, and legal.
For a supplier, this reframing is the whole story. When a sustainability issue is treated as a communications theme, it produces a request for a nice statistic. When the same issue is treated as an enterprise risk owned at board level, it produces controls, documentation requirements, and supplier obligations, because that is how companies manage risk. The questions coming down the chain change in character. They get more specific, more traceable, and less optional, because the person asking now answers to a risk committee.
Why compliance and risk are the least forgiving owners
There is a reason this matters more than a simple change of reporting line, and a recent University of Chicago study, summarized on the Harvard Law School Forum, makes the point with data. The researchers, led by Hajin Kim, ran computational analysis over more than 15,000 sustainability documents, scoring them for specificity, quantitative content, promotional language they call fluff, and disclosure of negative, against-interest news.
Their finding is uncomfortable and useful. As sustainability reporting went mainstream after 2015, the volume of reports and the adoption of voluntary frameworks surged, but the substance did not keep pace. Reports got longer while becoming less specific, less quantitative, and fluffier. Companies readily made the easy, rule-like choices, whether to publish a report and whether to adopt a framework, but stalled on the harder, standard-like question of what the report actually says, because there were no settled benchmarks for what good looks like, topic by topic. Framework adoption on its own showed no consistent link to higher-quality disclosure.
Now connect that to the shift above. The fluffy, narrative, benchmark-free era of sustainability reporting is exactly the era that compliance and enterprise risk are built to end. A compliance function answers to auditors and regulators. A risk function answers to the board. Neither accepts puffery in place of numbers. Both need the things the voluntary era underdelivered: specific figures, quantified evidence, honest disclosure of the bad along with the good, and methodologies that can survive external assurance, which is now becoming the market standard for sustainability statements. The work is not getting softer. It is getting audited.
What this means when the request reaches you
Put the three threads together and the picture for a mid-market supplier is clear. Your customers' sustainability work is narrowing, but the part that survives is the part that touches you, and it is being run by functions that demand rigor. The request that used to read like send us something for our sustainability report increasingly reads like give us a greenhouse gas figure we can drop into an assured disclosure, give us a product life cycle assessment we can defend to a regulator, complete this EcoVadis or CDP assessment because procurement and risk both rely on the score, and show us the methodology and the unflattering numbers, not just the headline.
This is the through-line across everything we have written lately. The regulatory structure at the top is not simplifying, as we covered in our piece on why the EU and ISSB systems still run on two separate rulebooks. The reporting obligations reach far beyond the companies named in any regulation. And now the internal balance of the work is shifting from marketing into compliance and risk. None of these trends eases the pressure on suppliers. What they change is its character. The pressure is not going away. It is professionalizing.
Where this leaves you
The suppliers who come out ahead are the ones who can answer a compliance-grade, risk-owned question with compliance-grade data. That means a defensible greenhouse gas inventory across Scopes 1, 2, and 3, product-level LCAs your customers can stand behind in their own disclosures, strong EcoVadis and CDP submissions, and reporting built with the methodology, documentation, and assurance-readiness that auditors and risk committees now expect. The company that can hand that over becomes easier to keep on the approved-supplier list, and much harder to replace.
ADB Sustainability helps mid-market manufacturers build the carbon accounting, LCA, EcoVadis, CDP, and ESG reporting infrastructure their customers and regulators increasingly expect.Get in touch.