When Sustainability ‘Reframing’ Costs More Than Just Jobs.
When Sustainability ‘Reframing’ Costs More Than Just Jobs — The Cultural Toll and Loss of Critical, Innovative Skills
In recent months, we've witnessed a notable shift in the financial services sector: a retreat from sustainability commitments, leading to job losses and a profound impact on organisational culture. What does this mean for future-proofing businesses and ultimately the world? More importantly, what are you and I going to do about it? I have spoken to several industry leaders, and the general consensus is that proactivity is needed versus waiting it out.
The Retreat from Sustainability
Major institutions like HSBC have announced significant job cuts, with plans to reduce workforce costs by 8% as part of a $1.5 billion savings drive. This move includes scaling back net-zero pledges and is expected to affect thousands of UK employees. (The Times)
Similarly, Lloyds Banking Group is set to cut approximately 500 jobs and close two offices as part of its £4bn growth and digitisation plan. The layoffs will primarily impact roles in customer relationship management, digital experience, marketing, sustainability, and commercial banking. (Financial Times)
These moves signal a broader trend of deprioritising Environmental, Social, and Governance (ESG) initiatives in favour of cost-cutting measures.
The Latest Update to the Omnibus Regulations
The EU's Omnibus Regulation, introduced in February 2025, aims to simplify and streamline key sustainability regulations. Notably, the European Parliament approved a "stop-the-clock" mechanism on April 3, 2025, delaying certain reporting deadlines under the Corporate Sustainability Reporting Directive (CSRD) by two years for specific groups of companies. Additionally, the deadline for Member States to transpose the Corporate Sustainability Due Diligence Directive (CSDDD) into national law has been extended to July 26, 2027, with the first group of companies required to comply from July 2028. These changes are formally awaiting final adoption by the Council of the EU. (Greenly)
While these updates provide companies with more time to prepare, they also introduce complexities. The proposed reductions in reporting requirements have raised concerns among investors and legal scholars, who warn that easing regulations could lead to increased legal exposure for companies over climate-related issues and risks. (Reuters)
Cultural Implications
This shift doesn't just affect employment numbers; it deeply influences workplace culture, attraction and retention. How do we future-proof and build a long-term sustainable business if there is only a focus on the short-term uncertainty?
Moreover, downsizing sustainability roles risks damaging employer-employee relationships, as many workers value their organisation’s commitment to ESG principles. (HR Review)
Call to Action: Building a Network for Climate Innovation and Growth
After numerous calls in the last couple of weeks with exceptionally talented and skilled professionals, the general consensus is clear: we still need to move forward regardless of larger organisations tiptoeing around regulations.
We are all aware of the real risks to businesses, supply chains, and the world. So, what are we going to do about it? Instead of waiting for the uptake and settling of the politics & regulations, let’s address the short-term and long-term risks through collaboration, expertise, and fresh ideas to drive sustainable growth and create new jobs.
Because no single organisation or person can solve these challenges alone, pooling expertise and resources through a network accelerates impact and innovation.
We developing a think tank and network focused on climate innovation, where experts from across sectors can support emerging ideas with funding advice, and strategic structuring.
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