Corporate Sustainability: Still Relevant in 2025 and Beyond
While sustainability and climate goals are facing a period of political uncertainty in the US, corporate sustainability efforts and reporting are projected to continue progressing in 2025 and beyond, driven by a broader context that goes beyond national policies.
While the regulatory landscape for sustainability may shift on a federal level, corporate sustainability efforts are expected to endure, driven by:
- State and international regulations
- Long-term strategic planning considerations
- Market dynamics that reward organizations leveraging sustainability as a competitive advantage
Mitigate climate-related risks, preserve business continuity, enhance brand value, and build stakeholder trust with insights into the 2025 Corporate sustainability landscape and emerging trends.
International and State Regulations Continue to Play a Vital Role
Despite potential shifts in federal environmental policies, organizations must adhere to a complex landscape of international and state regulations that mandate sustainability reporting and compliance.
The European Union’s Corporate Sustainability Reporting Directive (CSRD) requires all large foreign and US organizations operating in Europe, if they meet certain criteria, to report on a wide range of environmental, social and governance issues.
Other EU regulations that have potential impacts include:
- Corporate Sustainability Due Diligence Directive (CSDDD)
- EU Taxonomy Regulation
- Carbon Border Adjustment Mechanism (CBAM)
Another major global framework is the IFRS Sustainability Disclosure Standards, or ISSB Standards. These standards aim to streamline reporting for organizations operating in multiple jurisdictions by providing a common language for disclosing the effect of climate-related risks and opportunities and requiring sustainability-related information alongside financial statements in the same reporting package.
Countries that have adopted the ISSB Standards include:
“More than 20 jurisdictions have already decided to use or are taking steps to introduce ISSB Standards in their legal or regulatory frameworks. Together, these jurisdictions account for:
- nearly 55% of global GDP;
- more than 40% of global market capitalization; and
- more than half of global greenhouse gas emissions.”
Several US states have also proposed or enacted environmental laws requiring organizations to report on their emissions and sustainability practices. California Senate Bills 253 and 261 establish important climate-related financial disclosure requirements for public and private companies that operate or conduct business in California based on certain annual revenue thresholds. New York (SB3456), Colorado (HB25-1119), New Jersey (SB4117), and Illinois (HB3673) also proposing similar legislation.
This evolving patchwork of regulations require organizations to take a strategic approach to staying informed and understanding their reporting obligations under multiple jurisdictions. Given this context, organizations are unlikely to halt their sustainability and reporting efforts even if federal policies shift.
Sustainability is Still a Strategic Consideration
Many organizations recognize the need to assess the impact of climate change on business operations and to incorporate climate-related risks into long-term strategic planning. Resource scarcity, extreme weather events, deforestation and other factors can disrupt supply chains, increase operational costs, and pose significant challenges to business continuity, making it essential for organizations to develop or maintain sustainability strategies that enhance resilience and performance.
Integrating sustainability into business operations enables organizations to identify material risks and opportunities that aren’t typically captured in traditional financial analysis. Risks related to environmental regulations, social issues—such as labor practices and community relations—and governance challenges can greatly impact organizational performance.
Organizations that have a comprehensive understanding of their risk environment can proactively safeguard their operations, prepare for regulatory compliance, and take steps to increase stakeholder confidence, helping to protect their reputation and bottom line.
Consumer demand for transparency and accountability in sustainability initiatives continues to drive sustainability efforts. Consumers increasingly understand that climate can materially impact organizations’ risk and growth opportunities.
By effectively communicating sustainability initiatives, companies can attract investment, improve market reputation, and position themselves favorably for future growth in a landscape where sustainability and clean energy considerations are paramount. This transparency not only enhances brand loyalty but also differentiates companies in a competitive market, ultimately driving sales and customer engagement.
Stakeholders, including investors, customers, suppliers, and employees, are increasingly valuing companies based on their adherence to sustainability and other responsible business practices. Investors recognize that robust sustainability reporting is a key indicator of a company's long-term viability and risk management.
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To learn more about how your business can leverage sustainability efforts, contact your Moss Adams professional.