As climate reporting regulations expand globally and extreme weather events disrupt operations, sustainability has become central to business continuity. Alekhya Reddy of Optera challenges the conventional wisdom of standalone environmental teams, arguing that true resilience comes only when sustainability expertise permeates every department — from compliance to procurement.
Many in Washington have declared war on ESG, but sustainability remains a business imperative — not as a virtue-signaling activity but as long-term risk management. This evolving, uncertain landscape creates new challenges for compliance teams and their sustainability counterparts.
In order for companies to successfully manage the transition to a low-carbon economy, sustainability teams can no longer be standalone departments. These professionals must be embedded within other business units, including compliance, operations, procurement and facilities management, to ensure adherence to evolving reporting requirements while also aligning decarbonization strategies with broader business and risk management goals.
Creating a cross-functional structure enables sustainability programs to operate as strategic business planning activities rather than potentially controversial initiatives. Companies that treat sustainability as a business risk — not just a compliance issue — will be positioned for long-term success.
Sustainability supports risk management
Compliance professionals must approach sustainability as both a regulatory requirement and a comprehensive risk management strategy. Despite stalled reporting regulations in the U.S., thousands of organizations must comply with the EU’s Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD). California also has climate data and risk exposure reporting laws on the books, with enforcement beginning this year. Failure to comply with these regulations will result in substantial fines for covered entities, and their vendors may lose key partnerships and market access if they cannot demonstrate adequate sustainability reporting and due diligence.
From a risk management perspective, climate change presents clear operational threats. Extreme weather events, resource scarcity and supply chain disruptions hamper operational continuity and drive up costs. Renewable energy sources can mitigate these risks while also being less expensive, more efficient and more financially stable than fossil fuels.
These operational challenges reflect a larger economic shift as markets and regulations accelerate the transition to a low-carbon economy. Proactive sustainability initiatives protect business value against intensifying market pressures. According to McKinsey, businesses that don’t decarbonize could see their profits shrink as much as 20% by 2030 due to stranded assets, increased capital costs and lost market share. US consumers and corporate buyers are willing to pay more for sustainably made or sourced products, a Bain survey found, while at the same time, investor pressure to improve supply chain sustainability has grown 25% in the past five years.
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Read moreDetailsThe value of cross-functional sustainability initiatives
Given market and regulatory pressures, businesses must rethink how sustainability works within their organizations. This function is more than a department — it’s a company-wide mandate. Compliance, cost savings, risk mitigation and long-term business success are all interconnected, requiring sustainability initiatives to be woven into all organizational operations.
Sustainability teams handling climate and low-carbon economy transition risks in isolation lack the influence to implement changes. Other departments may perceive any recommendations as outside their scope of responsibility or a low priority. By embedding emissions management and energy efficiency work across departments, all teams understand how climate risks — such as extreme weather, supply chain disruptions and shifting regulations — translate into compliance, financial and operational challenges.
Developing actionable decarbonization and risk-mitigation strategies requires robust data from multiple business units, including energy use measurements from operations, supplier spend from procurement, material sourcing and manufacturing efficiency data from product development and past emissions reporting from sustainability. According to an Optera survey, gathering and managing emissions data is a major challenge for 40% of companies. That percentage rose to 55% for organizations with revenue above $10 billion. Breaking down organizational silos facilitates data management, allowing companies to see the full picture of their environmental impact, track their decarbonization progress and ensure audit-ready reporting.
While internal data drives operational improvements, organizations must also address external emissions sources. Sustainability professionals can support compliance teams in reducing Scope 3 (value chain) emissions, which is critical to mitigating climate-related risks. Teams’ combined expertise enables thorough partner risk assessments and establishes clear sustainability expectations for suppliers. This integrated approach embeds environmental and climate considerations into supplier management processes, helping organizations build more resilient supply chains while staying ahead of evolving regulatory requirements.
Integrating sustainability across the business
To make sustainability a business priority, the chief sustainability officer (CSO) should have a seat at the table in C-level discussions and exert influence across all departments, the same way a CCO or CECO should. This role shouldn’t simply set goals — they should communicate value. The CSO must ensure that sustainability insights are tied to robust data and translate the information into compelling narratives that convey how environmentally friendly practices contribute to the bottom line.
Business leaders should incorporate sustainability goals into organizational and departmental KPIs. Embedding shared accountability across functions — rather than isolating it within a single team — makes these initiatives a priority rather than an afterthought.
This integration of sustainability across business departments, supported by clear executive sponsorship and measurable goals, creates the foundation for lasting organizational change. A well-structured, cross-functional sustainability strategy not only ensures accurate, verifiable data for compliance and reporting but also unlocks operational efficiencies, strengthens supply chain resilience and positions companies to compete effectively in an increasingly sustainability-focused market environment.
Alekhya Reddy leads the development of Optera’s product strategy and roadmap, drawing on experience in data SaaS product management and renewable energy financial structuring. She was previously chief product officer of Carta Healthcare. 
