Are Sustainability Negotiations Doomed or Just Done Wrong?

For technology leaders, the useful lesson is not about climate policy in the abstract; it is about how hard multi-stakeholder decisions are governed. Sustainability commitments often fail when no one owns the trade-offs across finance, operations, procurement, data and delivery. CIOs and transformation leaders should treat these negotiations as an operating-model problem: who decides, who signs off, what evidence counts, and how exceptions are escalated.

The biggest risk is not disagreement, but unmanaged ambiguity. If the business cannot separate non-negotiable obligations from areas open to compromise, every discussion turns into positional bargaining. That creates the same failure pattern seen in portfolio governance: delayed decisions, hidden resistance and commitments that look aligned on paper but are weak in implementation. The practical question is whether the organisation has a decision framework that can survive pressure from competing priorities.

There is also a workforce and leadership dimension. Negotiating sustainability requires managers who can surface tensions early, ask better diagnostic questions and keep discussions evidence-based when interests diverge. That means training beyond standard procurement or commercial negotiation skills. Leaders should ask whether their teams know how to build legitimacy with suppliers, regulators, finance and internal executives before asking for compliance.

The next step is to link negotiation quality to measurable portfolio outcomes. What gets funded, what is deferred, and what counts as value should be explicit. Useful questions include: Are sustainability goals embedded in investment criteria? Do we track adoption, supplier participation and delivery risk, not just declared commitments? And where do we allow local flexibility versus enforce enterprise standards? Without those answers, sustainability becomes a slogan rather than a managed change agenda.

Win-lose or short-sighted methods will get us nowhere in negotiating sustainability issues.
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Much has changed in the sustainability landscape this year. The United States announced its withdrawal from the Paris Agreement; BlackRock and JPMorgan departed the Net Zero Asset Managers initiative; and the Net-Zero Banking Alliance folded following a mass exodus by key members. Countless companies have pared back their climate action programmes, and the Intergovernmental Negotiating Committee on Plastic Pollution failed to secure a consensus agreement in theirย latest talks. Many sustainability-related negotiations break down because individuals from different walks of life, often with diverging interests and objectives, rely on the wrong processes and strategies. They default to win-lose, power-driven behaviours, which are short-term oriented, value-destroying and ultimately unsustainable. Even when trying to be collaborative or aspiring for consensus, such tactics resemble sophisticated horse-trading or bargaining tactics, which are ill-suited to the complexity of the challenge. Whatโ€™s more, sustainability negotiations often hinge on consensus. This can arise either when one side possesses enough power to impose a โ€œconsensusโ€ on others, or when no side has a sufficient power advantage over the rest and all parties must be happy enough to make a deal. This creates serious and almost insurmountable hold-out problems.ย  At the heart of the sustainability challenge lies a paradox: Leaders have been trying to solve complex sustainability issues using non-sustainable negotiation practices. Whatโ€™s needed is consistency and coherence, fuelled by proper diagnostics and tailored methods. Below, I outline why the current processes (win-lose) are not sustainable, and how a sustainable approach (win-win) can help negotiators forge agreements that donโ€™t just work for those involved, but also the planet. The win-lose trap, where everyone loses Win-lose choices (which differ from win-loseย outcomes or situations) occur when negotiators use their power to push through their preferred deal. While this can work if they have significant leverage over their counterparty, it tends to be less effective or even counterproductive in multi-party settings, to address complex and adaptive challenges, or when requiring consensus and long-term implementation โ€“ all characteristics of sustainability negotiations.ย  Win-lose negotiation choices present a few challenges:
  • Itโ€™s hard to measure who has more power in a negotiation, as illustrated by the Russian invasion of Ukraine. Russia thought it would secure a quick victory but has been at war for over three years. Such overconfidence can afflict just about any negotiator. While they believe they have more power in one dimension, they either underestimate or are unaware of other power dimensions where they may not have an advantage.
  • Power doesnโ€™t guarantee results. When one party flexes its muscle, those on the receiving end will be under pressure. Afraid of losing, they may be more emotional, feel the need to resist or fight, and make less rational choices. This often translates into poor communication and reduced creative problem-solving, as well as power escalations that destroy value.
  • The legitimacy of the negotiation is completely destroyed when a stronger party chooses, and is allowed, to bully others into accepting their preferred option. When that happens, the weaker or losing parties will do whatever they can to resist or sabotage a deal they dislike. In the case of a consensus-building process, the easiest way for them to resist is to simply say โ€œnoโ€ and walk away.
Win-lose choices are not only inadequate to address the specificities of sustainability negotiations, but can in fact sabotage their success. Round after round, we see such negotiations fall apart. But sustainability negotiations arenโ€™t failing because parties are intractable, the world is polarised, each side thinks the others are evil, or due to other fundamental or structural reasons we have little hope of changing.ย  The problem is much simpler than it looks: We have been trying to solve sustainability challenges with ill-fitted, unsustainable processes.ย  A win-win step, one choice at a time Win-win negotiation strategies are based on choosing to refrain from using power to achieve a desired outcome. By not overpowering their counterparties, negotiators reduce fear and resistance, which facilitates the crafting of mutually beneficial outcomes.ย  A win-win approach doesnโ€™t just minimise value destruction. It increases value creation, while also enhancing the fairness and satisfaction of processes, relationships and outcomes. Why is it especially vital for navigating the unique characteristics of sustainability negotiations? Because when power is taken off the table, parties must think harder about the substance of the issues at hand and how to tackle them. They will then begin to realise that each side has valid fears, perspectives and aspirations, and that solutions will emerge only through persistent, iterative effort.ย  Progress in such negotiations demands patience. Slow and steady steps are the quickest route to lasting, implementable agreements, especiallyย when time is required to properly align many players pulling in different directions. Sustainability cannot be isolated as the topic of negotiation; it must define the way we negotiate, or we risk reproducing the very short-termism we seek to overcome. As such,ย sustainability agreements cannot be imposed. Beyond compliance, they require a long-term commitment that can only arise if parties feel the negotiation process has been inclusive and forward-looking in its approach.ย  In other words, sustainability must be embedded not only in what is negotiated, but also how the negotiation is conducted. It must permeate both the substance and process of the engagement to enhance the odds of achieving alignment and forging successful, sustainable agreements.ย  Negotiators should also remember that power, when used to coerce, divide or punish counterparts, is inherently destructive. In todayโ€™s multipolar, fast-changing world, no single actor can enforce lasting solutions. What endures are processes designed for shared learning, experimentation, transparency and adaptability. Why a paradigm shift is necessary Despite the recent backlash against sustainability initiatives, sustainability negotiations arenโ€™t doomed โ€“ theyโ€™re simply trapped in an outdated paradigm. The crises we face are evolving faster than our negotiation methods.ย  To make progress, negotiators must evolve, too. That means training negotiators to handle complexity rather than avoid it. To ask better questions, not just make more forceful demands. To build legitimacy before seeking compliance. And to understand that true progress is rarely achieved by individuals with the loudest voices, but by those who can connect the unconnected.ย  The sustainable negotiation approach is a key component of INSEADโ€™sย Advanced Negotiations online course, which I teach alongside my colleaguesย Roderick Swaabย andย Eric Luis Uhlmann. The course recentlyย receivedย a Responsible Business Education award for teaching from the Financial Times, which recognises academics that are integrating sustainability, experiential learning and advanced technologies into curricula to address global challenges. Over four weeks, students engage with in-depth case studies on complex sustainability topics: from managing cross-cultural differences in the Middle East and labour management negotiations in India to stakeholder relations in a Latin American mining company.ย  Participants donโ€™t just learn how to negotiate better โ€“ they pick up sustainable win-win negotiation tactics and practice consensus-building strategies to craft inclusive and respectful long-term deals where no party feels marginalised. They are taught how to shift the paradigm and are empowered to apply these approaches in their own unique contexts. Negotiating for a sustainable future The next phase of progress wonโ€™t come from another global summit or conference, but from a fundamental change in howย we negotiate: moving from transactional to transformational, from defensive to systemic, from short-term deals to long-term partnerships. The shift to more sustainable negotiation practices is one that our world โ€“ with all its thorny social, economic, political and environmental problems โ€“ desperately needs. By adopting sustainable win-win negotiation practices, leaders can build stronger, more collaborative relationships and resilient agreements, creating the foundations for lasting positive change. Sustainable negotiations are not naรฏve idealism. Rather, they are disciplined, structured choices that allow us to work harder in becoming smarter: one deal, one step, one win-win at a time.

Edited by:

Rachel Eva Lim

About the author(s)

Horacio Falcao
is a Professor of Management Practice at INSEAD and a co-founder of theย Negotiation and Conflict Management Collaborative. He is also the programme director of INSEAD’sย Negotiation Dynamics and Certificates in Negotiation programmes.
https://knowledge.insead.edu/responsibility/are-sustainability-negotiations-doomed-or-just-done-wrong

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