Over the past decade, we’ve seen sustainability become top of mind for companies and countries around the world. New global reporting mandates have been introduced like the Corporate Sustainability Reporting Directive (CSRD), the use of renewable energy has increased globally (which is predicted to be a $10 trillion opportunity for the global economy by 2050), a shift is being made to a circular economy, and more.
In the last year, more than 70 countries voted in their national elections, selecting the next era of global leaders. Based on this, we will likely see shifts in sustainability investments and prioritizations as governments change hands over the next term.
Regardless of what changes are made, the year 2025 will still require a focus on sustainability initiatives from companies. Not acting or investing in sustainability efforts will be detrimental – coming at a financial cost and competitive disadvantage either in the short term in markets where action is still a priority or in the longer term as new regulations emerge or are expanded for greater coverage.
To set up for success this new year, here are few of the key sustainability focus areas that companies should look to keep in mind as they build out their sustainability strategies:
Sustainability disclosures will continue to increase – expanding to new regions, industries, and markets
Sustainability regulations and disclosures have been increasingly introduced over the past few years, and 2025 is where it is starting to be put into action. This year, companies will start reporting to the EU’s CSRD for the first time, ringing in a new era for mandatory sustainability reporting for EU-based and operating companies.
Other countries are also implementing their own regulations in the coming year. While the U.S. SEC climate rules are still awaiting confirmation, California regulations for SB253 and SB 261 will continue progressing, requiring companies to report on their 2025 emissions data in the following year. The U.S. Department of Agriculture (USDA) has provided guidelines for measuring GHG emissions in agriculture and forestry.
The Canadian Sustainability Standards Board (CSSB) are creating their own disclosures for climate risk, with more details to come. In the meantime, a dedicated bill C-59 has been implemented to reduce greenwashing claims and ensure companies provide proper data to back up their claims.
One notable development in the past five years is the emergence of the APAC region as a leader in sustainability reporting, initially in terms of voluntary reporting and now to IFRS-aligned national regulations.. This region represents the majority of the global population and continues to be the strongest presence in global sustainability reporting. Seven APAC countries have reporting rates higher than 90% (including Japan, Singapore, Malaysia, South Korea, Thailand, Taiwan and Pakistan). More large companies in APAC report on sustainability than in North America.
In 2025, countries including Hong Kong, Sri Lanka, and Singapore are adopting international standards, aligning with IFRS S1 & S2. Mandatory climate-related disclosure for certain companies in Singapore will begin in 2025, aligning with the ISSB’s standards.
Investing In Sustainability Continues to Be on the Rise
Customers and investors continue to focus on a company’s sustainability performance, prior to making financial purchases investments, and this will only increase in 2025.
According to a report from Morgan Stanley, “77% of individual investors globally are interested in investing in companies that aim to both achieve market-rate financial returns, while considering positive social and/or environmental impact.” The report shares that over half of the respondents say that their interest in sustainable investing has increased in the last two years, anticipating that the allocations will continue to be boosted in the coming years.
A PwC report shares that consumers are willing to pay a premium, approximately 9.7% more, on sustainable produced or sourced goods, illustrating the importance placed on supporting sustainable companies and value chains.
An Increased Focus on Biodiversity
2024 saw natural catastrophes and environmental disasters on new levels, including experiencing one of the most devastating hurricane seasons in recent history and the hottest year on record. Because of this, biodiversity and nature conservation is becoming of great interest as countries come together to align on key targets and agreements.
Negotiations will continue in 2025. The UN Biodiversity Conference will be held in February in Rome, Italy, with key issues including increasing financial resources for biodiversity protections & measuring progress against the Kunming-Montreal Global Biodiversity Framework (GBF)’s key targets for 2030 and 2050 . The EU’s Deforestation Regulation (EUDR) will come into effect in June 2025, requiring products to be produced according to the country of production’s legislature around land use, environmental protection, conservation and more.
Analyzing Scope 3 And Value Chain Emissions
Last year marked a rise in Scope 3 emissions measurement and value chain analysis. Scope 3 counts for the largest share of most companies’ GHG emissions (approx. 75% of their total footprint), and investors often use this information to make financial and investment decisions to get a full view of a company’s impact.
However, companies often struggle with measuring Scope 3, which is why many haven’t reporting on these emissions before. Challenges cited include poor data quality, lack of access or availability, internal resource constraints, and overall complexity in reporting.
However, starting in 2025, many companies will no longer have a choice in reporting on Scope 3 due to global mandatory regulatory requirements (e.g., CSRD). Now is the time companies must invest in their Scope 3 data strategies to set themselves up for success in the coming year and beyond.
Innovations in supply chain sustainability will also continue to rise in 2025 as new technology (e.g., Gen AI), circular systems, and automations get introduced.
The new year brings an opportunity to properly set up for success, which requires the right tools and providers. Cority’s award-winning software and advisory services support global companies of all sizes with creating, implementing, and tracking progress towards their sustainability strategies. With a proven track record of supporting over 600 companies on their sustainability journey, Cority can provide tailored solutions and services to help companies navigate the new year with confidence and ease.
