In June 2020, Danone’s shareholders voted almost unanimously to make it an entreprise à mission, writing a social and environmental purpose into its articles. Nine months later, after two activist funds argued that the company was lagging its peers on returns, the board removed Emmanuel Faber as chief executive and chairman.
In late 2018, on the other side of the world, the Adani Group said it would fund a smaller version of its Carmichael coal mine in Australia from its own resources. By then, more than 30 banks and other financial institutions, including all four of Australia’s major banks, had publicly ruled out funding it.
One company went further than its shareholders focused on returns would accept. The other fell below what lenders and insurers would accept. Both lost the support of capital they needed.
Capital does not speak with one voice
Most commentary on sustainable finance asks one question: are investors pushing companies to do more? Often they are. But leaders don’t answer to investors in general. They answer to a specific set of capital providers, and each one wants something different.
The Capital Stack, a framework from my book Sustainability Leadership: The Global Outlook, sorts them into three layers:
- The base: sovereign and public capital. Sovereign wealth funds, state pensions and development banks. This capital is patient, often willing to accept lower returns, and focused on policy and development outcomes. It also sets the standards the other layers follow.
- The middle: institutional capital. Asset managers, pension funds, insurers and banks. This is the largest layer. It is bound by fiduciary duty to seek risk adjusted returns, and it increasingly attaches sustainability conditions to its lending, investing and voting.
- The apex: private equity and venture capital. Smaller, but it funds new technologies and business models, as long as there is growth and a profitable exit in sight.
The floor and the ceiling
Each provider accepts a range of strategies.
Its floor is the least ambitious strategy it will still finance on current terms. Fall below it and the provider withdraws, excludes you, votes against your directors or charges you more.
Its ceiling is the most expensive strategy, in near term returns, that it will support. Go above it and the provider pushes back, backs an activist, sells or declines to invest further.
Put the ranges of the providers you actually depend on side by side, and the overlap is your acceptance zone: the range of sustainability strategies your capital will support today.
Not every voice counts equally
The zone is set by the providers you can’t do without, not by the loudest or even the largest. Three questions identify them:
- Share: how much of our capital do they provide, or influence through their vote?
- Timing: how soon do we need their decision again, at a renewal, an annual meeting or a funding round?
- Substitutability: how easily, and at what cost, could we replace them?
A provider that scores high on two of these is essential. Danone’s activists held only a small stake, but they could rally a much larger group of shareholders focused on returns whose support the board needed.
The acceptance zone moves
Floors have tended to rise as regulation tightens. From 27 September 2026, for example, EU law bans claims that a product is climate neutral because of offsetting. Floors can also fall. In October 2025 the Net-Zero Banking Alliance shut down after many of its largest members had left under political pressure.
Ceilings move with the economics. They rise when green investments are shown to pay and when concessional finance lowers their cost. They fall when interest rates rise.
Because these conditions are reset whenever capital is renewed, your financing calendar is also the right calendar for reviewing sustainability strategy.
What this means for leaders
Sustainability strategy is often discussed as if more were always better and the only question were how fast. Leaders know it is more complicated than that. The job is to find the zone your capital will support, set the pace within it, and then work to widen it.
For every board, the practical question is this: who finances us, what will they accept, and how do we bring them with us?