As we look ahead to 2025, the sustainability sector is poised for continued growth and innovation, building on the transformative trends of 2024.
- The past year saw significant advancements in regenerative agriculture, sustainable water management and ESG integration, with companies like Nescafé, Carlsberg and Toyota leading the charge.
- Circular economy models gained traction, exemplified by French company Dipli's efforts in electronics upcycling.
- Nature intelligence emerged as a crucial tool for corporate strategy, with tech giants like Google developing flood prediction software.
- The scrutiny of supply chains intensified, while sustainability reporting became more standardised, particularly in the EU.
- Perhaps most notably, artificial intelligence revolutionised various aspects of sustainability, from smart energy grids to climate modeling.
As we enter 2025, these trends are expected to evolve and intersect, shaping a more sustainable future across industries and geographies.
10. Reporting and regulation
As digital transformation accelerates, 2025 will see sustainability reporting and disclosure processes advance.
As sustainability disclosure requirements become more stringent and standardised globally, companies will face increased scrutiny – from stakeholders, consumers and employees – and potential penalties for greenwashing.
Long-term sustainability goals, beyond 2030, will become more common, with companies adopting strategic foresight approaches.
“Expect greenwashing prevention to continue to dominate the regulatory agenda in 2025,” says Tom Willman, Regulatory Lead at Clarity AI.
“Companies will need to clearly and accurately communicate their products’ sustainability features, supported by transparent data and robust KPIs.
“This requires not just compliance but also a strategic approach to integrating sustainability into core operations.”
9. Sustainable finance
In 2025, sustainable finance is poised for significant growth, with ESG-linked financial products and green bonds taking centre stage.
The green bond market is projected to expand rapidly, potentially reaching US$2tn by 2025, with a compound annual growth rate of 25%.
ESG investing is expected to surge as investors increasingly prioritise sustainable and ethical products.
Green bonds and other sustainable finance instruments will continue to mobilise capital for climate change solutions, with governments and large companies using these tools to fund sustainability initiatives.
Additionally, sustainability-linked loans will gain popularity, linking interest rates to desired ESG outcomes and encouraging companies to integrate sustainability into their operations.
“Sustainability will come sharply into the spotlight,” believes Nick Jones, Founder and CEO of Zumo.
“As the sector continues its exponential growth, the carbon footprint of digital assets remains an unwelcome elephant lurking at the back of the room.
“We’ve seen significant advancements in Europe relating to crypto and sustainability, such as mandatory sustainability disclosures for crypto-asset service providers under the Markets in Crypto-Assets (MiCA) regulation.
“And during the recent Climate Week NYC, we saw clear enthusiasm from US providers, as well as an increasing convergence on climate tech as the next big investment impetus.
“The industry has now woken up to what’s possible and in 2025 we will see growing momentum, and further developments, in sustainability and innovation.”
8. Diversity, equity and inclusion
Diversity and inclusion efforts are intensifying, with companies setting more ambitious targets.
In 2025, DEI practices will become more data-driven and technologically advanced.
Organisations will leverage AI and analytics to identify biases, measure inclusion efforts and track progress in real-time.
Intersectionality will take centre stage, with companies adopting more nuanced approaches to address overlapping identities.
Inclusive leadership will be recognised as a core competency, with leaders trained to foster environments where all employees feel valued.
Neurodiversity initiatives will gain prominence, supporting neurodivergent employees through tailored recruitment processes and career development programmes.
Additionally, regulatory scrutiny is expected to increase, requiring businesses to report on diversity metrics and pay gaps, making transparency and actionable DEI efforts critical for success.
7. ESG
ESG metrics are rapidly becoming standard KPIs for C-suite executives, directly impacting their compensation. By 2025, this trend is expected to intensify.
Currently, 81% of companies globally use ESG metrics in executive incentive plans, up from 68% in 2020. In the US, the adoption rates surged from 52% in 2020 to 76% in 2023.
Environmental metrics, particularly carbon emissions reduction, have seen the fastest growth as companies are increasingly tying these metrics to both short-term and long-term incentive plans.
This shift reflects a growing commitment to sustainability, diversity and ethical governance, as well as a response to investor expectations and regulatory pressures.
6. Water stewardship
Water stewardship initiatives will become critical by 2025, particularly in regions facing scarcity.
With 1.8 billion people expected to face absolute water scarcity and two-thirds of the global population grappling with water stress, urgent action is needed.
Countries like Lebanon, Pakistan and Afghanistan are already experiencing severe water shortages and industries are responding with ambitious targets, such as PepsiCo's goal to replenish more than 100% of water used in high-risk areas by 2030.
Governments and businesses are implementing water management plans, focusing on reducing water use, improving irrigation techniques and preserving ecosystems.
Collaborative efforts, like Finland's Water Stewardship Action Plan, are emerging to address this critical issue on a national and international scale.
5. Circular economy
Circular economy models will be widely adopted in 2025, focusing on product life extension, reuse and recycling.
Sustainable packaging innovations will accelerate, with companies moving away from single-use plastics.
“However, resource efficiency and circular economy principles don’t always result in uniform environmental outcomes,” warns Mary Jacques, Lenovo’s Executive Director, Global ESG and Regulatory Compliance.
“While repairability is critical, it represents only one part of the solution.
"In the coming years, vendors will need to focus on reducing the lifecycle impacts of products and services, while prioritising consumption reduction.
“Systemic change, however, requires collective action. Achieving meaningful progress in minimising e-waste and advancing circular economy practices will depend on collaboration across the entire value chain.
“Consumers, regulators, researchers, recyclers, suppliers and technology companies must all work together to drive sustainable outcomes.”
4. Nature
Nature-based solutions (NbS) will gain significant prominence in 2025, with businesses ramping up investments in ecosystem restoration and conservation projects.
Annual investments in NbS are projected to reach US$384bn by 2025, more than doubling the current US$154bn.
This surge is driven by the urgent need to address climate change, biodiversity loss and land degradation.
Private sector involvement is expected to increase dramatically over the coming years, rising from the current 17% of total NbS investments.
Companies will integrate NbS into their operations, focusing on sustainable supply chains and offsetting unavoidable impacts through high-integrity nature markets.
This shift will be crucial in harnessing nature's power to reduce emissions, restore degraded landscapes and halt biodiversity loss.
3. Energy
Investments in renewable energy will surge in 2025 as costs continue to decrease, with more companies committing to 100% renewable energy goals.
“The future of decarbonisation lies in innovative energy management services and strategic renewable energy purchases,” believes Anne-Katrin Hagel, Director Sustainability Solutions at ENGIE Impact.
“As the demand for renewable energy and distributed generation grows, businesses must focus on energy efficiency, fuel switching, and low-emission technologies.
“Collaborating with specialised partners will be key to navigating the transition to carbon neutrality and establishing a leadership position in the emerging green economy.”
“Within the next decade, we'll witness a decline in the value of fossil fuel assets,” adds Tim Weiss, Co-Founder & CEO of Optera.
“As the transition to a low-carbon economy accelerates, spurred by market and global regulatory forces, fossil fuel assets will be retrofitted to support low-carbon technologies — renewable fuels or carbon capture and storage — where possible. Assets that cannot be adapted in this way will see a steady decline in value over the coming decade.
“At the same time, demand for renewable energy will outstrip supply as companies race to meet 2030 net-zero targets.
"Those who don’t secure renewable resources early will face skyrocketing costs that could derail their climate commitments and financial planning. The companies that start transitioning from fossil fuels to renewable energy now will be the ones that survive in the long run.”
“As the urgency to address climate change intensifies, global energy is undergoing a seismic shift,” explains Andrew Beebe, Managing Director of Obvious.
“The transition to clean energy is not only here — it’s accelerating. Innovations in generative science are driving profound changes in renewable generation, transmission technologies and data-driven user incentives that will ripple across industries.
“The numbers tell the story. The International Energy Agency (IEA) projected that investments in cleantech and infrastructure will hit US$2tn in 2024, roughly double the investment in fossil fuels.
"The US slice of this global sum is small — just 15% — but is growing sharply thanks to major incentives in the Infrastructure Investment and Jobs Act and the Inflation Reduction Act.”
2. AI
AI has seen an incredible rise to global prominence in 2024, and that is going to continue into 2025 as AI and big data analytics will optimise sustainability efforts across operations and supply chains.
“Artificial intelligence is no longer a futuristic fantasy; it’s rapidly becoming the engine driving efficiency and innovation in transportation technology,” says Christopher Keating, Senior Vice President of Trimble Transportation Europe.
“While 2024 saw companies experiment with basic AI-powered automation, 2025 will leap towards more sophisticated applications.
“Expect to see AI move beyond simple tasks such as route optimisation and into the realm of autonomous decision-making.
"By analysing vast amounts of data, advanced algorithms will be able to adjust their routes as real-time conditions change, such as changes in road layout or new buildings or changes in driver availability and cost fluctuations.
"This will also impact price negotiations. Instead of negotiating prices for each shipment individually with all the counterparts, companies with AI-powered tools can process all the negotiations simultaneously.
“As we firmly embrace the era of AI, the opportunities for transformative efficiency improvements across industries are immense,” says Mary.
“From optimising building design and management to enhancing supply chains and driving innovations in product development that reduce energy use and carbon emissions, AI is set to redefine operational excellence.”
“AI is a versatile tool for sustainability,” explains Kendra DeKeyrel, Vice President, IBM Sustainability Software.
“Everyone from manufacturers to utilities to public agencies can use it to boost efficiency and minimise environmental impact.”
Getting the most value out of AI requires using it in efficient, targeted, and cost-effective ways,” shares Christina Shim, Chief Sustainability Officer, IBM.
“That means using foundation models and tuning the smallest ones possible to meet your needs.
“Organisations should also be intentional about processing, using tools to minimise extra 'headroom' and running workloads by renewable power sources whenever possible. And they should choose infrastructure specifically designed to efficiently run AI, which can dramatically improve performance.”
1. Carbon
In 2025, carbon tracking and optimisation will become mainstream, with companies adopting AI-driven technologies to measure and reduce their carbon footprints.
Carbon capture technologies, including Direct Air Capture (DAC), will see increased efficiency and cost-effectiveness, leading to wider adoption and blockchain technology will revolutionise carbon credit markets, enhancing transparency, traceability and security.
The voluntary carbon market (VCM) is poised for significant expansion, driven by corporate net-zero commitments and strengthened climate policies.
AI and big data analytics will optimise carbon sequestration projects and trading strategies. International collaboration will lead to standardised carbon credit methodologies and verification processes, facilitating cross-border trading.
These trends will collectively accelerate efforts to combat climate change and transition to a low-carbon economy.
Ty Colman, Co-Founder & CRO at Optera, believes that organisations prioritising overall carbon management will drive more meaningful change.
“The race to decarbonise will expose a critical gap between carbon accounting and true carbon intelligence,” he says.
“Regulatory requirements are putting pressure on companies to adopt carbon accounting tools. But crunching the numbers isn’t enough.
“True carbon management goes beyond reporting numbers to generate data that informs strategic decisions.
“The companies that recognise this distinction and invest in comprehensive carbon management solutions will be better positioned to derive real value from their sustainability efforts and drive meaningful change.”
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