In 73 per cent of companies, responsibility for sustainability transformation remains anchored at board or executive management level. Companies’ self-defined climate targets are largely maintained. However, the issue is noticeably losing priority and momentum. This is the finding of the fourth Sustainability Transformation Monitor (STM), published by Bertelsmann Stiftung, Stiftung Mercator, the University of Hamburg and the Peer School for Sustainable Development.
The STM surveyed 822 companies from the real economy and the financial sector in Germany. It shows why momentum has been lost: companies perceive uncertain political conditions and a lack of market incentives as the biggest obstacles to increased transformation.
In the public debate, sustainability is receding into the background. This is also affecting corporate attitudes. Among 59 per cent of companies in the real economy and financial sector, sustainability is becoming less of a priority internally. In the previous year, only around 14 per cent reported this trend. Large corporations and sizeable SMEs in particular feel the impact of current debates.
The declining momentum is also reflected in the stagnation of responsibility at board and executive level, with no change compared to the previous year. The share of companies planning to anchor responsibility at this level has fallen by seven percentage points.
Political uncertainty weakens key drivers of transformation
The strongest drivers of sustainability transformation are “future employees”, followed by “executive management”, the “younger generation” and “competitors”. Notably, nearly all potential drivers have declined in intensity – in some cases significantly (employees: down 12 percentage points; executive management: down 7 percentage points).
From a corporate perspective, the relevance of politics to the transformation process has changed most dramatically. In previous years, companies regarded political action as an important driver. In the STM 2026, its significance as a driver drops sharply by 31 percentage points. At the same time, uncertain political and regulatory frameworks are now increasingly perceived as a barrier (up to 30 percentage points).
Lack of economic incentives slows down progress
“Without clear and reliable signals from policymakers and markets, the transformation is at risk of entering a phase of stagnation,” says Jakob Kunzlmann, sustainability expert at Bertelsmann Stiftung. “We now need a renewed focus: stronger strategic prioritisation, reliable political frameworks and market-based incentives, such as carbon pricing with predictable price pathways. This would allow environmental and social factors to become effective drivers of investment and competitiveness.”
Where political pressure is lacking, the prospect of a “business case” – that is, measurable economic benefits resulting from sustainability transformation – could become more prominent. However, only 17 per cent of companies see a clear business case. While 43 per cent recognise financial added value from integrating environmental and social issues, the benefits so far fall short of the associated costs. This helps explain why around 70 per cent of companies report that insufficient economic incentives are slowing their transformation efforts.
More companies are setting their own climate targets
Nevertheless, sustainability transformation has not disappeared from corporate agendas. The share of companies and banks measuring their greenhouse gas emissions has risen to 86 per cent. In the real economy, climate targets are largely being maintained or further developed. The proportion of companies with self-defined climate targets has increased from 53 per cent to 59 per cent. In the financial sector, the figure has risen even more sharply, from 46 per cent to 65 per cent.
“It is an important signal that more companies are measuring their emissions and adhering to climate targets. The crucial next step is to translate these targets into concrete transition pathways, with clear investment decisions, timelines and financing plans,” says Philipp Wesemann, Project Manager at Stiftung Mercator’s division for Climate-Resilient Society.
However, there is still a lack of concrete implementation plans. Among companies with climate targets, 41 per cent state that their transition plan is still “in development”. “Data on transformation must be embedded in corporate management and in investment and financing decisions,” says Manuel Reppmann, project lead and sustainability expert at the University of Hamburg.
Companies are well prepared for reporting – and committed beyond legal requirements
The EU Omnibus procedure, aiming to simplify reporting requirements and narrow their scope, has in many cases led to a slowdown or temporary suspension of reporting processes. At the same time, around 59 per cent of companies that will be subject to reporting obligations from 2027 already consider themselves well or very well prepared for EU-wide requirements; only around 18 per cent feel insufficiently prepared.
Furthermore, 75 per cent of companies that will in future be exempt from mandatory reporting state that they intend to continue publishing sustainability reports voluntarily. Just under 8 per cent plan to discontinue reporting altogether.
Sustainability is present in corporate finance – but not gaining importance
Sustainability remains part of financing practice, although its perceived relevance is declining. Only 30 per cent of companies and 37 per cent of banks consider sustainability important in financing discussions. In both groups, its importance has decreased (down 8 and 9 percentage points respectively).
While both banks and companies expect sustainability to play a role in corporate finance in the future, agreement in the real economy stands at 45 per cent, compared to 79 per cent among financial institutions. However, expectations have declined on both sides.
“Sustainability data is widely available today – yet its impact on lending decisions remains limited. Unless it is systematically integrated into risk analyses and pricing conditions, tangible transformation of incentives will not emerge. Sustainable finance must therefore evolve from a reporting instrument into a steering instrument,” says Incken Wentorp, sustainability expert at the Peer School for Sustainable Development.
In this new phase of sustainability transformation, effective cooperation along value chains and between the real economy and the financial sector is becoming increasingly important.
“Transformation is increasingly a coordination task between companies, banks, investors and policymakers. Many solutions only emerge through the interaction of these actors,” says Laura Marie Edinger-Schons, Chief Sustainability Officer and Professor of Sustainable Business at the University of Hamburg.
Sustainability Transformation Monitor
The STM 2026 comprises data from 822 companies, banks, and investors. It aims to provide evidence-based monitoring of the economy’s sustainability transformation. A particular focus lies on the interaction between the real economy and the financial sector in financing transformation.
The STM is published annually and has now been issued for the fourth time in cooperation between Bertelsmann Stiftung, Stiftung Mercator, the University of Hamburg and the Peer School for Sustainable Development. The study is supported by a partner network of more than 30 associations and initiatives.
MEDIA CONTACTS
Philipp Wesemann | Projektmanager Klimaresiliente Gesellschaft
T +49 02 01 2 45 22-702 | philipp.wesemann@stiftung-mercator.de
Jakob Kunzlmann | Senior Expert Nachhaltige Soziale Marktwirtschaft
T +49 52 41 81 81-337 | jakob.kunzlmann@bertelsmann-stiftung.de
Dr. Manuel Reppmann | Postdoctoral Researcher
T+ 49 40 23 95-2 22 73 | manuel.reppmann@uni-hamburg.de
Incken Wentorp | Head of Sustainability
T+49 4 21 4 10 07-821 | wentorp@peerschool.de
ABOUT STIFTUNG MERCATOR
Stiftung Mercator is a private, independent and non-profit foundation that operates on the basis of scientific expertise and practical project experience. Since 1996, it has been committed to fostering a solidary and participatory society. To this end, it supports and develops initiatives that improve opportunities for participation and strengthen social cohesion. Stiftung Mercator advocates for a capable and democratic Europe, a rights-based digital transformation of the state and society, and a resilient, socially balanced climate policy. These objectives can only be realised within a liberal democracy one that Stiftung Mercator seeks to defend and strengthen – as expressed in its motto: #StandingUpForDemocracy. The foundation is active in Germany, across Europe, and globally. It maintains a strong connection to the Ruhr region, home to the founding family and the foundation’s headquarters.
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