“What happens if your top supplier misses its emissions targets?”
I asked this question to the sustainability lead at a Spanish mid-sized food manufacturer. From the outside, their system looked solid with regular carbon accounting, supplier codes of conduct in place, and a detailed sustainability report that spoke of “full transparency.”
But their answer was uncertain.
The procurement team managed contracts. The marketing team managed messaging. The sustainability team managed reporting. But no one monitored or made decisions on the system as a whole.
This is a pattern I’ve seen dozens of times. Sustainability systems rarely fail all at once. They weaken gradually – in the spaces where responsibilities overlap, where data lacks a defined owner, where accountability gets diffused across departments that don’t talk to each other.
In most companies, this shows up as delayed updates, duplicated reports, or decisions made without current information. The problem usually becomes visible only when sustainability work actually depends on these systems – during an audit, a supplier review, or a certification renewal. By that point, decisions rely on individual initiative rather than defined authority.
If you’re wondering where your own system might be vulnerable, these are the five places I’d look first.
1. When There’s Ownership Without Authority
At one beverage company, the sustainability manager was responsible for water stewardship across their fruit suppliers – growers in water-stressed regions whose irrigation practices directly affected the brand’s sustainability claims. But she couldn’t influence contract terms. Procurement contracts had been structured around price and volume. Water use wasn’t part of the equation.
When suppliers exceeded water thresholds, the sustainability team flagged it. But without leverage over contracts, nothing changed. Suppliers continued as before. Water performance kept declining, quarter after quarter, and no one had the authority to stop it.
Quesado et al. (2024) describe exactly this pattern. Sustainability control systems often remain separate from core management controls, leaving sustainability teams accountable for outcomes they can’t actually influence.
The gap between accountability and authority weakens control over time. Targets get set, but the decisions that determine whether those targets get met – procurement terms, capital investment, production scheduling – belong to other functions entirely.
How to address it?
Start by listing all sustainability responsibilities alongside the decisions they depend on – budgets, contracts, supplier selection criteria. If authority over those decisions sits with another function, you’ve identified a structural gap.
From there, choose one pilot area to test a different approach. Packaging or transport often works well. Negotiate shared decision rights with the relevant function, even informally at first. The goal isn’t to take over, but to ensure sustainability has a seat when the decisions that shape outcomes are made.
2. When Data Doesn’t Translate to Action
Another food manufacturer I worked with had excellent dashboards – emissions, water, waste, all tracked meticulously. But logistics managers never saw any of it.
The data informed annual reports. It didn’t inform daily operations.
I’ve seen this pattern at nearly every company I’ve worked with. Sustainability metrics get collected for compliance purposes and then sit unused, disconnected from the people making operational decisions. Henri and Journeault (2010) found that firms integrating sustainability data directly into operational decision-making achieve faster performance gains than those treating it as a reporting exercise.
When sustainability data isn’t tied to specific actions, it remains descriptive rather than operational. The company keeps measuring, but the system never learns.
How to address it?
For every metric, ask: “When this changes, who acts and how?” Each data point should have a defined response. If packaging waste increases month-over-month, procurement should review supplier specs before the next order, not after year-end reporting.
That’s the difference between data that documents and data that drives change.
3. When Review Cycles Miss Decision Windows
Every slide ended with “no change since last quarter“. The meeting took two hours. Nothing in the company’s operating plan changed as a result.
This happens when sustainability reviews are scheduled around external reporting deadlines rather than internal decision cycles. In food and beverage, production planning, procurement, and logistics all follow predictable seasonal windows. When sustainability discussions happen outside those windows, findings arrive too late to influence upcoming actions.
The review becomes a ritual instead of a management tool.
How to address it?
Align sustainability reviews with your business decision calendar. Hold them just before procurement rounds or budget cycles so the findings can actually shape the next set of decisions. Record clear outcomes from each review and track which ones get executed.
If no one can point to a decision that changed because of the last review, the timing is probably wrong.
4. When Procedures Exist Only on Paper
A beverage company I worked with had clear escalation procedures for supplier sustainability issues. If a supplier’s emissions exceeded agreed limits, the contract couldn’t continue without VP-level sign-off.
Then it started to slip. Mid-level managers began approving exceptions directly – faster, and no one objected. By the time anyone noticed, the escalation process had stopped meaning anything.
Months later, an audit flagged one of those suppliers for emissions misreporting. Without clear approval records, the company couldn’t demonstrate that exceptions had been properly reviewed. What looked like a supplier problem became a governance problem.
This pattern is well documented. Schulte and Hallstedt (2018) found that sustainability risk management often fails when oversight mechanisms don’t evolve with business complexity. Static procedures can’t govern dynamic operations.
This matters beyond internal operations. Investors increasingly scrutinise not just sustainability commitments, but the governance systems behind them. According to PwC’s Global Investor Survey (2024), nearly two-thirds of investors want evidence of measurable progress, which requires audit trails that can be independently verified.
How to address it?
Review your governance structure annually, but focus on how decisions are made, not only how they’re documented. If a significant share of approvals or exceptions happens outside formal channels, the framework no longer matches your organisation’s pace.
Update escalation procedures. Adjust sign-off levels. Confirm who holds decision rights at each stage.
Governance stays effective only when it evolves alongside the business. The moment it becomes easier to work around the system than through it, the system has already failed.
5. When Reporting Stops at Disclosure
A company can score well on external sustainability ratings and still have no clear picture of what’s happening internally.
At first, you see polished reports, credible disclosures, but when you ask how the numbers were generated, the answer depends on who you ask. Data is gathered differently across departments. Verification is inconsistent. The report becomes a communication tool, not a management tool.
Research confirms this pattern. Bellucci et al. (2021) found that environmental and social reports sometimes overstate performance when internal systems can’t verify the data being communicated. The gap isn’t in the messaging but in the infrastructure behind it.
How to address it?
Pull your last external report. Pick three key figures – emissions, waste, water, whatever you highlighted. Now trace each one back to its source. If you can’t find a verified internal record within an hour, your reporting has outpaced your controls.
Strengthen the internal process before expanding external communication.
What These Patterns Have in Common
Sustainability systems rarely fail suddenly. They weaken in small shifts: delayed data, recurring issues, updates that lose priority in leadership meetings.
These are signals that feedback and accountability mechanisms are starting to erode.
When I work with leadership teams, we often start by tracing a single process, for example, how water usage data from a key sourcing region gets flagged, reviewed, and acted on.
In most cases, the finding is the same: information is exchanged, but accountability isn’t built into the decision.
Once that’s visible, teams can start designing structures that keep data, authority, and action aligned.
Building System Integrity
If any of these patterns sound familiar, it may be time to examine where your system is under stress.
I developed an Operational Resilience Review as a short diagnostic for exactly this – a way to pinpoint which parts of your governance are strong and which need adjustment before they become visible problems.
And if you want to keep building on this, the newsletter goes deeper – how to close the gap between sustainability commitments and the systems that actually deliver them.
Leave a Reply