ISEP research has found that sustainability professionals are delivering stronger climate and nature performance while operating with tighter budgets, reduced board access, and rising internal pressure.
The latest State of the Profession findings, reported on 28 July 2026, show that 44% of organisations are now operating without a dedicated sustainability budget, up from 32% last year. The findings suggest that sustainability teams are being asked to maintain or improve delivery at a time when direct funding and organisational influence are under strain.
The report points to a difficult phase for ESG functions. After several years of expanding targets, reporting commitments, net-zero plans, and stakeholder expectations, many organisations are now testing sustainability work against cost control, regulatory burden, and evidence of measurable business value.
That pressure does not mean sustainability is disappearing from corporate priorities. The function is instead being forced to prove its place inside operational, financial, and risk decisions. Climate performance, nature risk, energy use, supplier standards, regulatory reporting, and customer scrutiny remain live issues, but many teams are being asked to address them with fewer dedicated resources.
The budget shift comes as reporting rules are being reconsidered in several markets. The EU reporting reset has cut ESG burden, with revised ESRS rules reducing datapoints and adding flexibility. A lighter disclosure load may ease some compliance pressure, though it does not remove the underlying commercial and operational demands linked to sustainability.
Energy costs, extreme weather, supplier exposure, biodiversity risk, customer expectations, and lender scrutiny continue to affect business decisions. Companies that reduce sustainability work to compliance alone may miss the operational risks and opportunities that sit behind reporting frameworks.
The findings also expose a governance issue. Reduced board access can weaken the ability of sustainability teams to influence capital allocation, procurement, product design, estates, fleet, logistics, and supplier decisions. Without senior sponsorship, sustainability work can become a reporting exercise conducted after commercial decisions have already been made.
That creates a familiar organisational tension. Sustainability teams are often accountable for targets they cannot deliver alone. Emissions reduction may require changes in energy procurement, manufacturing processes, travel, property, logistics, product design, and supplier management. Nature-related commitments may depend on sourcing, land use, packaging, water, and agricultural supply. The sustainability function can coordinate, measure, and advise, but delivery sits across the organisation.
Budget pressure can have mixed effects. It may force clearer prioritisation and stronger links to value, while also reducing the capacity to gather data, manage projects, engage suppliers, and support operational teams. Companies that cut specialist resource without embedding sustainability capability elsewhere risk losing both expertise and momentum.
The next phase of ESG is likely to be more operational and less rhetorical. Investors, customers, and regulators are increasingly looking for credible evidence rather than broad commitments. Claims around emissions, offsets, products, or social impact face closer scrutiny, while businesses are expected to show how targets connect to investment and execution.
Sustainability professionals will need financial literacy, data quality, commercial influence, and cross-functional management. The role is becoming more closely linked with risk, operations, procurement, finance, legal, and strategy. Teams that can translate environmental and social commitments into cost avoidance, resilience, revenue protection, regulatory readiness, and capital access are more likely to retain influence.
The findings also show why sustainability cannot be judged only by the size of a central budget. In mature organisations, much of the spending required to reduce impact sits inside facilities, fleet, energy, supply, technology, and product teams. The central function needs enough authority to guide those decisions and enough data to measure whether they are working.
The report captures a market entering a more disciplined ESG phase. Companies are no longer being judged only on ambition; they are being judged on whether they can preserve progress when budgets tighten and executive attention is divided. Sustainability teams are still being asked to deliver, and the organisations that make the work part of mainstream governance will be better placed than those leaving it dependent on a shrinking specialist budget.
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