Sustainability remains high on the corporate agenda, but the systems for turning environmental targets into business decisions remain uneven. New MIT research finds a wide gap between companies that have formalized responsibility across functions and those where sustainability remains concentrated in a single team.
Nearly 83% of supply chain professionals rate sustainability as important or very important to long-term business success, the highest level recorded in the seven-year history of the State of Supply Chain Sustainability Report.
The report, produced by the MIT Sustainable Supply Chain Lab and supported by the C.H. Robinson Foundation, Breakthrough, CO2 AI and Dassault Systèmes, also shows how trade disruption and geopolitical uncertainty are complicating companies’ plans.
While 59% of respondents said recent U.S. policy changes have increased their commitment to sustainability, 68% said tariff uncertainty has forced them to delay, reduce or abandon sustainability strategies. Nearly one-third reported that tariff-related disruption had increased emissions.
More than eight in 10 respondents across North America, Europe and Asia also said continuing geopolitical conflict is reducing the effectiveness of their climate actions.
Governance Determines Whether Targets Reach Business Decisions
The report identifies a significant gap between public commitments and the organizational structures supporting them.
Among companies with publicly stated sustainability goals, only 51% have established a formal cross-functional sustainability team, while just 33% have board-level oversight.
The difference becomes more pronounced when sustainability reaches business decisions. Companies with formal cross-functional teams said sustainability is frequently or always incorporated into decisions 57% of the time. Where responsibility remains within a single function, that figure falls to 13%.
That 44-percentage-point gap suggests organizational ownership can matter as much as the target itself. Sustainability is most embedded in transportation and logistics, cited by 39% of respondents, followed by procurement at 35%, warehousing at 34% and product design at 33%.
Collaboration with suppliers is also increasing. Participation in joint supplier engagement and decarbonization programs rose from 31% to 58% in one year, while partnerships focused on emissions from shared suppliers increased from 23% to 55%.
AI Efficiency Is Not Guaranteeing Lower Emissions
Technology is adding another complication to the sustainability equation.
In North America, 78% of organizations report using AI in sustainability initiatives, and 87% of adopters said it has had a positive effect on sustainability goals. Reported applications include reducing material waste and energy consumption and filling gaps in supplier emissions data.
The results, however, become less straightforward when total environmental outcomes are measured.
Among mature agentic AI users, 53% reported lower total greenhouse-gas emissions, while 29% reported an increase. Advanced and fully automated warehouses show a similar disconnect: 78% reported higher energy consumption after implementing AI and 76% reported increased waste. Only 24% use AI-driven real-time monitoring to track those environmental effects.
Freight illustrates the same challenge at the asset level. Companies are using route optimization, load consolidation and driver-behavior programs to reduce emissions, but 43% of fleets remain mostly or entirely dependent on conventional diesel. Only 8% have completed a full transition to low-emission energy.
Regional differences are also substantial. Eighty-four percent of European freight companies said recent policy changes had positively affected their decarbonization strategies, compared with 44% in North America. Battery-electric vehicles are operating at scale at 60% of European companies, versus 36% in North America.
The Next Test Is Who Owns the Trade-Offs
The harder sustainability decisions increasingly involve competing objectives rather than isolated environmental targets. Tariffs can alter sourcing routes, automation can reduce labor or material requirements while increasing electricity demand, and supplier resilience measures can conflict with emissions goals.
That raises the value of governance beyond reporting. Companies that connect procurement, logistics, finance, technology and sustainability have a better structure for deciding which trade-offs are acceptable and for measuring whether efficiency gains translate into lower environmental impact. As AI adoption and trade uncertainty increase, the quality of those decisions may prove more consequential than the number of sustainability commitments companies publish.
