Sustainability Under Constraint: Why Progress Stalls Even When Commitments Are Public
A decade ago, the dominant theory of change in sustainability was simple: make impacts visible, make commitments public, and performance will follow.
That theory wasn’t naïve. It matched the moment. Companies needed a shared language, investors needed comparable signals, and boards needed frameworks sturdy enough to carry climate and social risk into governance discussions.
But something has changed.
In many organizations, the hard part is no longer starting the conversation—it’s sustaining decisions when budgets, incentives, and governance routines tighten.
Today, awareness is widespread. Regulation is formalized. Disclosure is professionalized. Many organizations have made public commitments that would have been unthinkable in 2012.
And yet, in many sectors, the operational outcomes are less visible than the reporting suggests.
This series starts from a structural hypothesis:
The bottleneck is no longer intention or transparency.
It is decision-making under constraint.
Not because leaders don’t care. Not because they don’t understand. But because sustainability decisions increasingly sit inside a system of constraints—cognitive, institutional, financial, and governance-related—that shape what is considered feasible, fundable, and defensible.
This is not a political series. Not an advocacy series. Not a compliance guide.
It is a research-informed, practitioner-oriented exploration of how decisions are made under constraint—and how governance can evolve to unblock progress.
Phase 1 — The Commitment & Voluntary Framework Era (2010–2018)
Between 2010 and 2018, sustainability became legible.
Three developments mattered.
First, voluntary reporting was mainstreamed. GRI-style reporting expanded from an early adopter practice into a familiar corporate routine. Many firms learned how to collect non-financial data, narrate impacts, and build internal reporting capability.
Second, the global goals created a shared narrative. The SDGs (2015) offered a vocabulary that could sit comfortably alongside corporate strategy: targets, themes, partnerships, ambition.
Third, climate governance entered the boardroom. TCFD helped translate climate from a reputational issue into a governance issue: oversight, scenario thinking, risk, and financial implications.
The implicit belief of the era was: Transparency and commitment drive change.
In practice, the most common pattern was: publish, improve a little, publish again—a cycle that created momentum, legitimacy, and learning.
Bridge to the next phase: As commitments became common, the focus shifted from signaling to comparability—and from narrative to discipline.
Phase 2 — The Standardization & Comparability Era (2019–2024)
The next phase was about turning sustainability into something markets and regulators could compare and therefore discipline.
This is where we saw:
ISSB consolidation and the push toward global baseline standards
ESRS and double materiality, expanding the perimeter of relevance
Scope 3 integration, pulling value chains into the accounting boundary
Taxonomies, translating “green” into classification systems
Risk pricing, as climate and transition factors moved into the cost of capital logic
The professionalization of sustainability functions, with deeper technical expertise and internal process ownership
The implicit belief shifted: Standardization and comparability discipline decision-making.
This was an important upgrade. It made sustainability harder to dismiss as “soft.” It increased internal accountability. It raised the cost of inconsistency.
But it also created new organizational dynamics:
More metrics created more internal coordination requirements.
More standards created more interpretation disputes.
More comparability created more scrutiny—often without creating more decision rights or capital allocation flexibility.
A useful way to describe this phase is: sustainability became more governable on paper.
Not always more executable in operating systems.
Bridge to the next phase: As standards expanded, sustainability entered core operating systems—where constraints are felt most directly.
Phase 3 — The Friction & Constraint Era (2024–Present)
The current period is defined less by frameworks and more by friction.
A few signals are difficult to ignore:
ESG backlash and politicization (in some markets more than others)
Capital tightening and higher hurdle rates
Budget scrutiny and demand for short-term justification
Transition fatigue, as multi-year programs collide with quarterly reality
Greenhushing, as reporting risk rises and messaging becomes cautious
A widening gap between attention and performance, where external pressure increases focus but doesn’t reliably produce improvement
In practice, this often means greater scrutiny and greater reporting risk, while the financial and political room to maneuver narrows.
This is the pivot point for the series: The limiting factor is increasingly not “Do we understand the issue?”
It is “Can we make, fund, and defend the decisions required—inside today’s constraints?”
This is not an argument against regulation, ambition, or transparency. It is an argument about where the real bottleneck has moved.
And it has moved into decision architecture.
From disclosure to allocation: sustainability governance under constraints
Constraints are not excuses. They are design conditions.
Organizations do not decide in a vacuum. They decide through:
Limited attention and finite executive bandwidth
Governance routines that privilege some types of evidence over others
Incentive systems that reward near-term stability
Capital allocation rules built for a different risk horizon
Institutional expectations that pull decisions toward legitimacy and defensibility
This is the terrain that research has mapped for decades. In this series, the goal is to translate those insights into practitioner language—without losing conceptual precision.
Three research anchors, translated into decision patterns
1) Bounded rationality: why “optimal” sustainability decisions are rare
Research suggests that decision-makers operate within the limits of information, time, attention, and processing capacity and therefore tend to satisfice rather than optimize.
In practice, this creates a bias toward initiatives that are measurable, fundable, and defensible; rather than system-changing.
Common decision patterns include:
Initiatives narrowing to what can be counted and managed
Trade-offs are being reframed into “win-wins” to reduce friction
Programs converging on what is easiest to approve, not what shifts operating reality
Sub-goals are becoming the work, even when they drift from the original intent
The point is not to criticize. It is to name a governance reality that shapes outcomes.
2) Mental models and feasibility: why some options never enter the room
Decision-makers don’t just respond to facts. They respond through internal models of what is possible, legitimate, and strategically acceptable.
In practice, this creates a silent filter: some options are excluded before analysis begins because they fall outside current feasibility boundaries—commercial, operational, social, or political.
So the constraint is not only “what we can do.” It is also “what we can imagine proposing” and the forum in which that proposal is considered safe.
3) Barrier systems: why execution slows structurally
Sustainability barriers rarely appear one at a time. They cluster, interact, and reinforce one another.
In practice, this means:
Removing one blocker often exposes the next
Progress looks nonlinear, even when governance effort increases
Teams can mistake surface symptoms (e.g., “lack of buy-in”) for root constraints (e.g., capital rules, decision rights, incentive design)
When sustainability feels “stuck,” the underlying issue is often not motivation. It is sequencing and system design.
Why this series matters now
Because the sustainability agenda is moving from declaration to allocation.
The hardest decisions are no longer about whether sustainability belongs in strategy.
They are about:
Which trade-offs will the organization accept
What time horizon will it fund
Which business units will carry transition costs
What evidence is “sufficient” to invest under uncertainty
How capital allocation and governance routines absorb volatility without freezing
In the friction era, sustainability becomes less of a narrative—and more of a test of the organization’s decision system.
This series focuses on how decisions actually get made when trade-offs are real—and what governance can change to unblock progress.
What this series will cover
Over the next blogs, we’ll unpack constraints that shape sustainability decisions and the governance patterns that help organizations move:
Bounded rationality and why “good enough” becomes the default (Blog 1)
Mental models and feasibility—why trade-offs get avoided and why some options never enter discussion (Blog 2)
Barrier architectures—why execution slows structurally and how barriers interact (Blog 3)
Attention vs action—why pressure doesn’t reliably improve performance, and what changes inertia (Blog 4)
Institutional responses—how organizations comply, compromise, avoid, defy, or manipulate (Blog 5)
Practical diagnostic tool: The Constraint Lens (board-ready, 10 minutes)
Use this in an executive meeting, sustainability committee, or board agenda review. The goal is not to “score” sustainability. The goal is to identify the two constraints that most reliably block decisions.
A) Decision rights
Decision forum: Where do sustainability decisions actually get made—strategy, finance, operations, risk, procurement? Is that explicit or assumed?
Ownership: When trade-offs appear, who has the authority to decide—and who only influences?
B) Capital allocation rules
Hurdles: Which hurdle rates, payback periods, or risk premiums quietly block transition investments?
Time horizon: Do capital rules reflect the risk horizon you say you are managing?
C) Evidence thresholds
Proof standard: What counts as “enough evidence” to act under uncertainty—and who sets that threshold?
Defensibility bias: Do decisions prioritize what is easiest to justify externally over what is most important operationally?
D) Incentives
Dominant KPIs: Which metrics dominate when trade-offs appear (margin, volume, cost, risk)? What gets protected by default?
Sub-goal drift: Where have metrics become the objective, rather than a proxy for the objective?
E) Routines and attention-to-action
Routine friction: Which routines (budgeting, planning, procurement, approval gates) convert sustainability into incrementalism?
Attention conversion: When attention spikes (regulatory change, media scrutiny, investor questions), what mechanism converts attention into funded work with clear accountability?
How to use the result (3 steps)
Identify the top two binding constraints that repeatedly block decisions.
Assign an owner + decision forum (where the constraint will be addressed).
Define one rule change to test within 90 days (capital rule, incentive lever, or routine adjustment).
References
Aragón-Correa, J. A., Ortiz-de-Mandojana, N., & Barnett, M. (2025). Heads Must Roll: How External and Internal Factors Combine to Improve Corporate Environmental Performance. Business Strategy and the Environment.
Clifford, K. R., Cravens, A. E., & Knapp, C. N. (2022). Responding to Ecological Transformation: Mental Models, External Constraints, and Manager Decision-Making. BioScience, 72(1), 57–70.
Mutua, K., Powell-Turner, J., Spiers, M., & Callaghan, J. (2025). An In-Depth Analysis of Barriers to Corporate Sustainability. Administrative Sciences, 15(5), 161.
Simon, H. A. (1978). Rational Decision-Making in Business Organizations (Nobel Memorial Lecture).
