2025 Will Bring New Challenges and Opportunities for Sustainability

With 2024 rapidly drawing to a close, the attention of the ESG and sustainability world has shifted to what lies ahead for businesses, regulators, and governments in 2025. One thing is for certain: geopolitical uncertainties and new political leadership in the U.S., Germany, and other major economies will likely have an impact on global efforts to combat climate change. At the same time, many experts are optimistic that the use of advanced technologies and the implementation of mandatory climate disclosures will help companies make progress on their sustainability goals.

Our Top Stories in this issue focus on 2025 predictions for key climate and sustainability themes and trends. Sarah Nelson, Lead Economist of Economics & Sustainability for Oxford Economics, highlights five key sustainability themes she expects to see in 2025. First, she states that “political disruptions and ongoing conflicts in Gaza, Ukraine, and Sudan are reshaping international priorities, raising concerns about the future of global cooperation on climate action.”

The second and third themes are related: Nelson sees continued challenges to global climate solutions from inequalities between high income nations and developing nations, with high income nations showing reluctance to commit funds at COP29. This lack of support from governments will present a challenge as “the private nature finance market is growing but remains far short of the scale needed to complement public nature finance commitments.”

Nelson’s fourth theme focuses on the opportunities and risks presented by artificial intelligence (AI) for meeting sustainability challenges, with the potential benefits of AI to help improve the energy grid and supply chains offset by the enormous amounts of electricity, water, and critical materials used by large AI models. The fifth theme highlights growing market expectations of corporate sustainability such as the implementation of mandatory climate disclosures in the EU. Overall, Oxford Economics remains skeptical that the inevitability of climate impacts will translate into a renewed sense of urgency among global leaders.

Sustainability Magazine strikes a more optimistic tone in its predictions for major trends in 2025. Among these trends are sustainability disclosure requirements becoming more stringent and standardized globally, with companies facing increased scrutiny and potential penalties for greenwashing. Sustainable finance such as ESG-linked financial products and green bonds are projected to expand rapidly. The use of ESG metrics in C-suite executive incentive plans is expected to intensify, particularly environmental metrics such as carbon emissions reduction.

Other predictions from Sustainability Magazine include an increased focus on water stewardship, circular economy models and sustainable packaging. Investments in renewable energy are expected to surge as more companies commit to 100% renewable energy goals. The publication also highlights the opportunities presented by AI to help companies optimize sustainability efforts across operations and supply chains, adopting AI-driven technologies to measure and reduce their carbon footprints.

As we look forward to 2025, the G&A team is available as always to help you navigate the challenges and opportunities you face on your sustainability journey. Email us at info@ga-institute.com. We wish you all the joys of the holiday season.

This is just the introduction of G&A's Sustainability Highlights newsletter this week. Click here to view the full issue.