Sustainability in 2026 – Top Priorities for APAC Leaders

2026 will be a defining year for sustainability in Australia and across APAC. Regulatory pressure, investor expectations, and escalating nature and climate risks are converging to create a tipping point. Sustainability is a core driver of enterprise value and resilience and companies that fail to integrate sustainability into business strategy, risk falling behind in a market where performance is being redefined.

We asked our CEO, Dr. Matt Bell, to share the priorities that will matter most for corporate leaders and how these will shape strategy, strengthen risk management, and accelerate sustainable performance in the year ahead.

Sustainability momentum in APAC

Q1. APAC appears to be bucking the trend of sustainability pullback seen in markets like the US. What is driving this momentum, and how should corporate leaders respond?

APAC’s momentum isn’t a counter-trend; it’s a fundamental realignment. While some regions debate pace, Asia is competing for dominance in the new industrial base: AI, EVs, batteries, solar and the critical minerals underpinning the new, greener economy. The driver is economic sovereignty and export necessity. You don’t pull back from the engine of your own growth.

Corporate leaders must respond by linking sustainability directly to supply chain resilience and market access. EU’s regulatory framing may appear to have waned, but there remain pressing compliance issues that aren’t just foreign policies – they are terms of trade for APAC exporters. Your sustainability strategy is now a direct input into your cost of capital and your customers’ procurement. I view it as a core competitive variable in the region’s manufacturing and technological supremacy.

Action: Treat sustainability as a competitive variable in cost of capital and procurement decisions and start embedding it into your supply chain strategy now.

Sustainability in 2026 – priorities for APAC

Q2. What are the top sustainability priorities that will most influence business strategy and investor expectations in APAC in 2026?

I’m seeing four priorities already starting to dominate early 2026 boardroom discussions:

1. AI excitement and uneasiness: Leveraging artificial intelligence as the decisive force multiplier in sustainability is becoming essential, yet its adoption and application remain patchy and uneven – creating new disruptive market leaders, but also creating new sustainability risks around job displacement, ethics, and the potential for corporate-led “efficiencies” that replicate broken economic models’ reliance on stretched natural resources. AI moves from being a tool to a strategic lever for those who lead with a sustainability-first principle, and with humans embedded in the planning process.
2. Carbon competitiveness: It’s no longer just about your emissions footprint. It’s about how carbon-efficient your operations and products are compared to regional rivals. This dictates attractiveness to global supply chains and exposure to mechanisms like CBAM.
3. Nature & water security: Physical climate risk in Asia is acute and immediate. With approximately 75% of GDP in Asia and the Pacific dependent on nature, according to a 2025 Asian Development Bank report, investors are moving beyond climate pledges to scrutinise operational resilience, particularly water stewardship and natural‑capital dependencies across the value chain.
4. Just transition as operational stability: The social license to operate is paramount. Strategies for workforce transition, community engagement, and ethical sourcing are critical for securing permits, maintaining stable operations, and attracting ESG capital focused on social governance. Investors now see these not as ESG scores, but as direct proxies for systemic risk management and long-term asset viability in the region. ESG adoption and allocation intentions remain high among APAC investors, reinforcing the need for credible social governance and delivery.

Action: Identify which of these priorities most impact your business model and allocate resources to address them immediately.

The 10 worst climate-related disasters of 2025 amounted to more than $120bn in insured losses. Asia accounted for four of the world’s six costliest weather disasters. Only 12.3% of natural disaster losses in Asia-Pacific for 2025 were insured.

Sustainability as a core element of business strategy

Q3. How can companies embed sustainability into core business strategy, so it is recognised as a driver of risk management and value creation, rather than treated as a separate add‑on?

We need to stop enabling the perception of ’embedding’ and start actually integrating from the core.

The North American lesson is that sustainability thrives when tied to P&L levers – efficiency, market share, and innovation premiums. When it moves from a “nice to have add-on” and a core, credible rationale for longer-term returns, it becomes hard to budge.

• Reframe the Language: Shift from ESG projects (which I never understood anyway) to ‘resource productivity initiatives,’ ‘market-access compliance,’ and ‘resilience infrastructure.’
• Hardwire the Sustainability Function into Strategy: The value of seeing wider business functions engage with sustainability initiatives over the years means that many of the activities sitting in CSO teams can be largely undertaken elsewhere – this shouldn’t be seen as a threat but the opportunity for sustainability leaders to do what they always should – help establish credible business strategies that are considerate of longer timeframes, scenarios, and planetary limits.
• Leverage APAC’s Leverage: Use your position in the region’s hyper-efficient supply chains to become the supplier of choice for global brands under intense regulatory and consumer pressure. Your sustainability is their risk mitigation.

Action: Hardwire sustainability into strategic planning and capital allocation to make it inseparable from growth decisions.

The role of AI in sustainability

Q4. What role will technology, including AI, play in accelerating sustainability outcomes in 2026?

In 2026, technology’s primary role is expected to drive operational efficiencies writ large, and that may well be true – but my view is that well-managed AI could well expose and solve the biggest bottlenecks in corporate sustainability: the implementation gap.

AI will commoditise strategic insight, giving every leader access to optimised pathways. The differentiator will no longer be knowing what to do, but doing it at speed and scale. Studies show APAC investors are already refining approaches to ESG, with high adoption and increasing attention to AI’s environmental impact and delivery risk, which raises the bar on credible execution, not just strategy decks.

For corporate leaders, this means your focus must shift:

• From buying strategies and risk-analysis to buying de-risked delivery. The premium will be on partners who can orchestrate the ecosystem: financiers, suppliers, and communities, to turn a plan into a functioning reality.
• From reporting on ESG metrics to managing an AI-powered impact engine. Your data will fuel dynamic systems that continuously optimise for carbon, water, and social equity in real-time operations.
• From pilot projects to portfolio-scale transformation. AI will identify your highest-leverage intervention points, allowing you to move resources from scattered pilots to systemic, outcome-driven programs.

This may come across as techno-optimism, but the risk of not engaging with the technological reform in this manner is the mass “optimisation” of unsustainable business practices – the lure of which could well, in the very short term, seem attractive to leaders.

Action: Shift focus from buying strategies to securing partners who can deliver systemic transformation at scale.

Sustaining credibility when resources are tight

Q5. What practical steps can leaders take to sustain credibility and progress on sustainability commitments during periods of resource and financial constraint?

Constraint is the truest test of commitment, and in many previous periods we’ve seen genuine sustainability innovation – through the global financial crisis, during COVID-19, so don’t see that as the disruptor. The key now however, is strategic focus over meaningless, expansive pledges.

1. Double Down on Materiality: Ruthlessly prioritise the 2-3 material sustainability issues that directly affect your cost, revenue, or risk. Go deep, prove value, and communicate that linkage clearly. Find detractors and understand their position.
2. Unlock Self-Funding Loops: Redirect savings from detailed scenarios that have finance and risk buy-in – understanding hidden costs around the corner means those “savings” can be directly modelled into the next wave of sustainability investments. This creates a virtuous cycle that is more immune to sustainability function budget cycles.
3. Transparency Over Perfection: In constrained times, credibility comes from honest, data-driven communication – but one that has storytelling embedded to create the change agenda we’ve missed for too long. Report on both progress and setbacks with equal clarity, outlining your adaptive plan and placing it in stories that resonate with internal and external stakeholders. This builds more trust than glossy, greenwashed reports promising distant, unfunded goals.

Action: Double down on 2–3 material issues and create a clear linkage between sustainability and financial performance.

Why a credible transition plan is essential

Q6. Why is credible climate transition planning essential in 2026, and how should boards link it to capital allocation and investor confidence?

A credible transition plan is the strategic blueprint for survival in a climate-constrained world. It moves the conversation from ‘what risks might we face?’ to ‘how will we transform and thrive?’

While some regions like the EU have wavered on their mandates, leading UK and now Australian boards are seizing the initiative. They understand that a robust plan, detailing shifts in business models, supply chains, and end markets, is the single strongest signal of long-term governance. It directly answers the investor’s core question: ‘Is this business fit for the future?’

The link to capital is therefore absolute. Boards must treat the transition plan as the primary filter for CapEx. Every major investment in assets, acquisitions, or R&D must be stress-tested against it. Does it advance the transition or lock in stranded assets?

This disciplined alignment doesn’t just allocate capital; it attracts it, by proving strategic coherence in the face of systemic change.

Action: Stress-test every major investment against your transition plan, this is non-negotiable for attracting capital in 2026.

Tackling Scope 3 emissions

Q7. Scope 3 emissions remain a challenge. Where should businesses focus first to make measurable progress?

Stop measuring the fog and start managing the hotspots. Generic spend-based factors give a comforting illusion of progress but reveal nothing actionable.

Focus first on the critical 20%: the suppliers and purchased materials that represent the bulk of your Scope 3 footprint and concentrate your strategic leverage. For a manufacturer, these might be primary inputs. For a retailer, it’s more likely to be agriculture or logistics.

Engage these strategic partners not with audits, but with collaborative investment in efficiency, renewables, material innovation, and, more importantly, more circular models. Use procurement muscle and long-term contracts to de-risk their transition. Partner with banks and financiers also motivated to support supply chain sustainability.

This moves the needle from estimated emissions to verified reductions, transforming a reporting burden into a tangible source of resilience and competitive advantage in your core value chain.

Action: Engage strategic suppliers with collaborative investment and long-term contracts to accelerate verified reductions.

Intergration nature-related risks

Q8. Nature-related risks and opportunities are gaining attention. How can companies integrate nature into decision-making and risk management?

Begin by moving from awareness to an actionable diagnosis. A LEAP assessment (Locate, Evaluate, Assess, Prepare) is the critical first step. It maps your operational and supply chain geography against specific, material nature dependencies and impacts: pinpointing where water stress or biodiversity loss directly threaten production or procurement.

This diagnosis then informs strategy. Use frameworks like those from the Nature Positive Institute to translate risks into measurable targets and ‘Nature Positive’ outcomes. This isn’t about generic reporting for reporting’s sake; it’s about treating natural capital as strategic infrastructure. The goal is to shift investment from mitigating distant reputational risk to securing tangible operational resilience and a sustainable social license to operate in APAC’s most vulnerable and vital ecosystems.

Action: Begin mapping your nature dependencies now, and integrate these insights into risk management and investment decisions.

Final thoughts

So there you have Matt’s thoughts on the sustainability priorities and actions APAC leaders should focus on in 2026.

The year ahead will test which organisations can move beyond compliance and embed sustainability as the foundation for long-term performance. Those that act decisively will not only increase resilience and meet regulatory demands but earn trust and strategic advantage in a world where authentic, sustainable performance is becoming the benchmark for integrity and long-term success. In APAC, this means treating sustainability as inseparable from strategy, capital allocation, and delivery, because in the new industrial economy, leadership will be defined by the ability to turn ambition into action at speed and scale.

Listen to more from Matt on the year ahead in the recent Purposing Podcast | Anthesis Global