Long-term investors are doubling down on sustainability despite political challenges. Harvard Business Review reported that worldwide assets managed with explicit environmental, social, and governance (ESG) objectives are expected to exceed US$50 trillion by 2025, accounting for roughly one-third of all professionally managed capital. Capital markets are translating that appetite into complex figures: last year, global sales of green, social, and sustainability bonds surpassed US$1 trillion for the second consecutive year in 2024, cementing a new “ESG norm” in primary debt markets, according to Bloomberg and S&P Global. 

Against this backdrop, sustainability has become a financial lever that moves both sides of the classic value equation: 

Graphic 1: Value equation showing the compounding impact of higher returns and lower capital costs.

How sustainability drives value creation

Below we clarify how specific ESG levers can increase returns or lower funding costs, supported by 2024-dated evidence and real-world examples.

1. Return to capital

Return on capital measures how effectively a business converts its invested capital into profits. Sustainability can directly enhance this by improving earnings drivers, from opening new growth markets to strengthening brand loyalty, increasing operational efficiency, and building a high-performing workforce. Companies that embrace sustainability often experience stronger fundamentals. Over a 17-year study, the MSCI Institute explains that firms with top ESG ratings consistently outperformed their lower-rated peers due primarily to better earnings performance.

Growth

Sustainability can unlock new revenue growth by positioning companies at the forefront of emerging markets and technologies. Businesses that solve environmental and social challenges tap into a fast-growing demand. Companies in many sectors are finding that sustainable innovation fuels growth. Developing eco-friendly products and services (such as solar power systems, plant-based foods, or biodegradable packaging) opens new customer segments and differentiates the brand. Businesses can also grow by repositioning existing offerings with a sustainability lens – for instance, apparel retailers launching circular fashion lines or tech firms expanding into climate-smart infrastructure.

Brand value 

Building a strong sustainability profile enhances brand value and customer loyalty, leading to increased sales and margins. In an era of conscious consumers, especially among younger generations, a reputation for environmental and social responsibility is a valuable intangible asset. A key ESG study shows that 83% of consumers believe companies should actively shape ESG best practices, and many reward brands that do so. Purpose is also crucial for talent: a survey noted that 75% of Gen Z and Millennials say an employer’s societal impact is a significant factor when accepting a job.

A company known for ethical sourcing, climate action, or community impact can attract loyal customers, enhance its public image, and even charge a premium for its products. Financially, a trusted brand decreases the marketing needed to acquire and keep customers, resulting in a higher return on capital.

Resource productivity

Sustainability drives operational excellence by enhancing resource productivity—using energy, water, and materials more efficiently to lower costs. Initiatives such as eco-design, waste reduction, and circular economy practices boost the bottom line by decreasing input spending and disposal fees. Companies across various sectors are already realising these benefits. For instance, Unilever states its eco-efficiency and sustainable sourcing efforts have avoided more than US$1.5 billion in cumulative costs since 2008, primarily through reduced energy, water, and raw material consumption.

Veolia’s closed-loop biomass boiler for the Chilean prune exporter Prunesco converts plum stones into steam, cutting annual operating expenses by over €175,000 and preventing 4,060 tons of CO₂ emissions every year. In the built environment, third-party standards reveal similar advantages: LEED-certified offices, on average, consume about 25% less energy and 11% less water than conventional buildings, while attracting rental premiums of roughly 11%. In summary, greener operations lead to leaner, more valuable businesses.

Human capital 

Sustainability encompasses social factors, with one of the most significant being human capital management – how a company treats and empowers its workforce. Employees are a vital asset whose productivity and innovation drive returns on capital. Companies that implement better employee practices (such as fair pay, diversity and inclusion, training, and work-life balance) tend to have more engaged, productive, and loyal workers, resulting in superior financial performance.

A famous study by ICAEW showed that the “100 Best Companies to Work for in America” (known for high employee satisfaction) delivered stock returns 2.3–3.8% per year higher than their peers over nearly three decades. In other words, treating employees well isn’t just ethical – it yields measurable profitability and shareholder value payoffs. Diverse and inclusive teams also drive innovation by bringing a wider range of ideas and avoiding “groupthink.”

2. Cost of capital 

In addition to enhancing returns, sustainability can lower a company’s cost of capital—the rate of return that investors require to finance the business. The cost of capital is influenced by perceived risk: the lower the risk of an investment, the lower the return investors are willing to accept. Sustainable companies are often viewed as less risky and better positioned for the future, which can encourage equity investors to apply lower risk premiums and lenders to provide cheaper debt.

As a result, the company’s weighted average cost of capital (WACC) decreases, boosting its value. One 2024 MSCI Institute analysis found a significant historical correlation between higher ESG ratings and lower financing costs for companies in equity and debt. In practice, sustainability can impact the cost of capital through two main channels: reducing risk premiums and expanding access to capital.

Risk premium reduction

Investors increasingly recognize that strong sustainability performance indicates effective risk management and long-term resilience. Companies with robust ESG practices often demonstrate lower volatility in earnings and stock prices and reduced tail risks, such as significant regulatory fines, accidents, or reputational scandals. This stability reduces the risk premium investors associate with the company’s cash flows. A recent MSCI study illustrates this effect: firms deemed the most resilient to material ESG risks consistently secure financing at lower costs than their less sustainable counterparts, even after accounting for factors like industry and credit rating. In other words, markets reward sustainable companies with a lower cost of equity through higher stock price multiples and a lower cost of debt due to tighter credit spreads.

Part of this is because these companies experience fewer shocks; for example, they are less likely to face heavy penalties for environmental contamination or consumer boycotts and are often better prepared for upcoming regulations. One sustainability review notes that 81 % of 50 companies assessed across 14 Asia Pacific jurisdictions now explain their risk-management processes under TCFD pillars, demonstrating rapid mainstreaming of such standards.

Empirical evidence also links strong ESG scores with lower systematic risk. Companies with higher sustainability ratings generally have lower beta, a measure of stock volatility relative to the market, and undergo fewer extreme downturns. They also excel at managing idiosyncratic business risks, such as supply chain disruptions or product safety issues, further minimizing overall risk. Lower risk leads to a lower cost of capital, as investors do not require as high a return to compensate for uncertainty.

Access to capital

Sustainability lowers risk and expands a company’s access to capital by attracting a larger base of investors and lenders. We are witnessing rapid growth in sustainability-linked investments. Institutional investors, such as pension funds and asset managers, have mandates to increase ESG-aligned holdings. This means companies with strong sustainability credentials can tap into high demand from investors, potentially reducing their cost of equity as more capital chases their stock. A broad investor base also enhances funding stability. Similarly, banks and bond investors are eager to finance sustainable businesses and projects in credit markets. Sustainable debt issuance has surged; by 2024, cumulative sustainable bonds and loans worldwide surpassed US$ 9 trillion, according to RBC Capital Markets' Sustainable Finance Group.

Companies can issue green, social, mixed bonds, or sustainability-linked loans (SLLs) at favourable rates to fund climate initiatives or other ESG projects. Financial incentives explicitly tied to sustainability are becoming more common. For example, many corporations, such as Carrefour, which placed a €750 million, eight-year sustainability-linked bond in September 2024 tied to Scope 1 and 2 emissions as well as food-waste targets; Verizon, whose sixth US$1 billion green bond (allocated entirely to renewable-energy projects) settled in early 2025; and Enel, which continues to draw on its EMTN program and detailed the use of proceeds in its 2024 Green Bond Report, demonstrate how robust ESG credentials can lead to cheaper, high-demand funding.

A Metyis value creation use case

A clear example of value creation through sustainability is Metyis' collaboration with Astara, a global mobility company based in Madrid that operates in 19 countries across Europe, Latin America, and Southeast Asia and generates revenues exceeding €5 billion.  

In its initial phase, Metyis is helping Astara set up an ESG Office and an ESG Data Office to establish the foundation for sustainable value creation across the organisation. 

Key initiatives involve preparing the 2024 Sustainability Report, addressing shareholder ESG requirements, and ensuring regulatory compliance to improve brand perception and transparency. 

To reduce risk premiums and improve financing conditions, Metyis is aiding in obtaining ESG certifications and structuring access to green financing mechanisms. Regarding resource productivity, efforts concentrate on optimising energy supply contracts and promoting self-consumption solutions to lower operational costs and minimize environmental impact. 

All these initiatives are integrated into a centralised ESG data framework, automating information flows and ensuring consistent, traceable, and transparent reporting throughout Astara’s operations. 

Finding value through sustainability

In short, when sustainability projects are perceived as a cost area, Metyis partners with organisations to turn sustainability into a strategic lever that reduces capital costs, unlocks preferential financing, enhances returns on investment, and strengthens brand value. Metyis thoroughly understands how value is generated through sustainability, from the drivers that improve returns, such as growth, resource productivity, and talent, to the factors that lower funding costs, including tighter risk premiums and better access to ESG capital.

Metyis’ approach, based on the V.I.S.T.A. methodology, explains to clients the financial advantages of sustainability in their organisations and enables close collaborations with them, refining their strategies, developing high-impact project portfolios, and establishing robust data architectures that facilitate efficient, transparent, and automated reporting according to stakeholder expectations, regulatory requirements, and the demands of the world’s leading ESG rating agencies.