The reasons for sustainability teams to feel cautiously optimistic about 2025
An enduring truth is that the scale and complexity of the sustainability challenge for business – from climate, to biodiversity and reporting – has made progress seem elusive for sustainability teams.
However, and not diminishing the significant challenges that still lie ahead, 2024 has shown some positive signs that the effort is starting to pay off.
This past year, the record-breaking retirement of carbon credits has demonstrated a growing commitment from businesses to address climate-heating emissions. Companies are moving beyond performative gestures to embedding robust approaches to the voluntary carbon markets as a part of comprehensive decarbonisation strategies. This reflects a shift in mindset: sustainability is increasingly seen as a core business priority, not an optional add-on advocated by a siloed sustainability team.
Over 75% of new renewable energy capacity added last year was cheaper than fossil fuels. This marks a positive moment for the energy transition. Affordable, clean energy removes a significant financial barrier for businesses looking to meet their sustainability targets.
Political developments across Europe have set a more encouraging tone this year. In the UK, the new government has brought clarity and certainty to its climate policies, laying out long-term plans for energy efficiency and renewable investments. Denmark’s introduction of a carbon tax on fuels is another example of progressive leadership that signals a serious commitment to reducing emissions. Such moves offer businesses and their sustainability teams a clearer framework within which to align their strategies and plan for the future.
Regulation, often viewed as a hurdle, has also taken a step towards being a more helpful facilitator for strategic development of sustainability planning. Unlike previous regulations that focused on retrospective reporting, the EU’s Corporate Sustainability Due Diligence Directive (CSDDD) which came into force this year requires businesses to integrate due diligence into forward-looking strategies. Companies must now actively address human rights, climate and environmental consequences across their supply chains. That certainty is helpful for driving action. Indeed, proactive companies that have embraced CSDDD are already mapping their supply chains and building resilience, setting themselves apart in an increasingly competitive landscape.
Equally, the now-clarified guidance from the Taskforce on Nature-related Financial Disclosures (TNFD) offers business a framework which helps them to identify their dependencies and impacts on nature. With this insight, businesses can factor sustainability of resource use and the availability of nature’s services into their business strategy.
The burgeoning ‘nature tech’ sector, which encompasses tools such as AI, satellite imagery and blockchain also offers increasingly smarter solutions for addressing biodiversity management. This is an area that offers much promise and is one to monitor closely.
This year has also seen more businesses push for systemic change in supply chains, industry practices and government policies. We’ve been proud to work with companies that are embracing collaborative approaches to help make this happen. Reconomy, for example, has led efforts to reform the UK’s waste sector and push for the creation of a circular economy. This example shows how individual corporate actions can be complemented effectively by driving collective efforts to fix the system – scaling-up the impact and benefit exponentially.
None of this is in any way to deny that the challenge remains large and complex, particularly for sustainability teams that may be under-resourced and spread thin. Or that in many cases we are lacking political will to drive determined action. Many people rightly reacted with anger at the outcomes of COP29, especially because of the failure to provide adequate transition finance to developing nations necessary to support and secure threatened communities, environments and global supply chains. There were significant new reports this year about depressing levels of climate impact and nature loss that seriously affect societies, economies and businesses.
It’s unfortunately easy to feel pessimistic. That’s the nature of the business that we’re in and the task that we face. However, this does not alter the fact that emerging clarity in the areas I’ve highlighted will frame and encourage future action. The task for sustainability teams now is to build on this and continue to accelerate their own transition to a more sustainable, profitable and resilient future. For the sake of their businesses, and for the sake of all our futures.
We still face a steep uphill battle, but let’s keep moving forward.