How directors can align purpose with profitability for ongoing success

How can my board align purpose with profitability?

Sustainability is not a trade-off between purpose and profitability. For boards in the financial services industry, multiple pathways can generate financial and reputational dividends. The challenge is how quickly you can integrate ESG into core business strategy. Done well, this is a competitive advantage.

Sustainability is often framed as a cost, yet for boards, the reality is more nuanced. There are direct and indirect returns across ESG initiatives that mitigate risk and deliver long-term value creation. Some global institutions have stepped back from ambitious ESG commitments, but sustainability remains a business driver across many industries, including financial services. For organisations concerned about balancing ESG strategy with profitability, the question should be “can we afford not to?” Here are four practical, financially credible responses to consider.

Renewable energy? Never cheaper

The cost of procuring renewable energy has never been lower. Large-scale Generation Certificates, the market’s primary mechanism for renewable offsets, are at their lowest price since the Renewable Energy Target was established. Today, the small premium required to switch to 100 per cent renewable energy can be more than offset by moving to wholesale rate tariffs. Businesses whose energy use is concentrated in the 9am–5pm window, stand to benefit the most, as they consume when solar generation is highest and wholesale prices and carbon emissions are at their lowest.

Practical initiatives, tangible returns

Not all ESG investments are long-dated or intangible. Energy efficiency, demand response and load management initiatives frequently achieve internal-rates of return greater than 30 per cent, making them some of the highest-yielding projects in any corporate portfolio.

For financial institutions with large office networks or data-intensive operations, the opportunities are clear — better HVAC management, smart building controls and time-shifting non-critical loads to the cheaper high renewable penetration hours of the day all deliver rapid paybacks. When combined with wholesale electricity retail strategies, these measures can significantly improve operating margins while reinforcing ESG credentials.

Boards are under pressure to demonstrate quick wins in sustainability without undermining the balance sheet. Prioritising initiatives with strong ROI provides the dual benefit of delivering immediate bottom-line improvement and strengthening long-term ESG positioning.

Compliance and client expectations

ESG reporting is quickly aligning with the same level of scrutiny as financial reporting. In Australia, mandatory climate-related disclosures are already being phased in, with requirements aligned to the International Sustainability Standards Board. This means listed companies and large financial institutions must disclose scope 1, 2 and — critically — scope 3 emissions alongside governance and risk management processes.

The financial services industry is particularly exposed. Clients and institutional investors are demanding clear disclosure on sustainability performance. The cost of failing to report accurately is not just regulatory, it can mean losing clients who demand transparency as part of their own reporting chain. Boards must weigh the internal “cost of compliance” against the greater cost of customer attrition or reputational damage.

Attracting and retaining talent

One of the most overlooked costs of weak ESG commitments is human capital. Recruitment and retention are expensive and the ability to attract and retain top talent directly shapes competitiveness. Younger cohorts of professionals consistently place high value on working for organisations that align with their personal values. Organisations with a clear ESG commitment can build employee engagement, strengthen their culture and reduce attrition costs.

Gareth Mann GAICD is managing director of MTA Energy, and an experienced executive in the global power and infrastructure sectors.

This article first appeared under the headline 'How can my board align purpose with profitability?' in the October 2025 issue of Company Director magazine.