2025 will be a year of change. From regulatory frameworks to technological advancements, political shifts, and setbacks from huge players in the market, one thing is certain: businesses must learn how to navigate these challenges and find opportunities leading the way in addressing global challenges, creating shared value, and gaining competitive advantage.
As we pave the way into a new year, there is always much discussion about what to expect from the next months. In our personal lives, this is a time to reflect on our trajectory, envision what we want to achieve, and set new goals. We make new commitments and embrace the excitement of a new beginning. The business world is not much different. While the timing may vary, and the deadlines may be further down the road, the idea of starting anew, exploring opportunities, and paving new paths is part of business culture. It can also serve as a much-needed injection of energy and focus for new achievements. Thus, at this time of the year, it is quite common to stumble across numerous articles reflecting on the past year's events and debating about the trends and expectations of the next ones. This piece fits into this category as an invitation for us to reflect on our expectations for sustainability over the next year, considering recent events and developments that have already defined an outlook for 2025.
Sustainability is reshaping business trajectories, profoundly influencing decision-making processes and corporate priorities. There is no better example of this than the shift proposed by the Corporate Sustainability Reporting Directive (CSRD), which remains at the forefront of sustainability discussions. Companies under its scope will publish their first reports using this new framework over the next months, which has significantly influenced their efforts over the last year. Compliance, thus, will remain a top priority as businesses adapt to the increased level of detail and scrutiny required. However, the CSRD proposes more than that: it also requires companies to (re)think about their strategy and policies regarding sustainability, provoking discussions across the whole business.
To meet these expectations, businesses are turning to technology and advanced analytics tools. By leveraging innovations like blockchain and artificial intelligence (AI), they are enhancing data quality, ensuring integrity, and improving traceability. This technological integration is especially critical for addressing Scope 3 emissions, a challenge that spans entire supply chains. However, concerns about its environmental impact — such as the water usage required to cool down the serves — highlight the need for balanced adoption and innovation in the resources used to maintain this technology functioning. That will most likely be a topic of debate throughout the year.
The broader sustainability landscape is also evolving, with environmental, social, and governance (ESG) criteria remaining central to discussions. Yet, significant shifts could be underway. The decision by BlackRock to withdraw from the Net Zero Asset Managers initiative signals a potential re-evaluation of how major financial institutions engage and approach their climate commitments. This shift, coupled with recent news of leading companies stepping back from their sustainability promises, raises pressing questions about the resilience of global efforts to combat climate change.
A recently published Deloitte study highlights that climate change ranks among the top three concerns for global leaders. It also reports that global executives are prioritizing and increasing investments in sustainability, with a significant increase from last year. Disappointingly, though, over the past year, several companies have stepped back from their sustainability commitments, including Coca-Cola, Unilever, Gucci, Bottega Veneta, TotalEnergies, and Air New Zealand. This movement negatively impacts the shared global challenge to achieve the 2030 Goals and opens the way for other companies to do the same. The social aspect of sustainability has also suffered disruptions: Meta, for instance, had just discontinued its Diversity, Equity, and Inclusion programs, citing shifting priorities. This decision has sparked a huge backlash across social media. It may influence the company's positioning in the market and its capacity to keep attracting and retaining young talent – not to mention the value it is delivering.
Amid these challenges, some companies remain steadfast in their commitments. More companies seem to be embedding circular economy principles into product design and waste management, particularly in industries like fashion, electronics, and packaging – well-known for their negative impact on this matter. Biodiversity preservation and carbon offsetting projects are gaining traction, with innovative approaches to restoring ecosystems and combating deforestation and the development of other nature-based solutions.
Despite Meta's recent announcement, other organizations are increasingly recognizing the value of sustainable workforce policies. These companies are investing in benefits for both their employees and the communities in which they operate, enhancing their capacity to create value, both inside and out.
These reflections underscore the dynamic nature of corporate sustainability and the many challenges it faces. 2025 will be a year of change. From regulatory frameworks to technological advancements, political shifts, and setbacks from huge players in the market, one thing is certain: businesses must learn how to navigate these challenges and find opportunities leading the way in addressing global challenges, creating shared value, and gaining competitive advantage. For that, we need responsible leaders to remain firm in their sustainability commitments and speak up about relevant topics.
Now, more than ever, we need leaders who can explore the positive opportunities discussed in this article and pave the way forward, creating space for others to follow.
Natália Cantarino, Researcher no Center for Responsible Business & Leadership da CATÓLICA-LISBON