3 ways sustainability will change in 2025: Are you ready?

As 2025 begins, sustainability initiatives appear to be facing headwinds. The United States has once again withdrawn from the Paris Agreement and major financial institutions have pulled out of decarbonisation alliances. All this against the backdrop of record global temperatures and unprecedented climate catastrophes. These developments have fueled a sense of pessimism, prompting many to ask: is sustainability in retreat?

From my recent conversations with executives and sustainability leaders in the financial sector, the answer is clear: no, sustainability isn’t retreating—it’s evolving. Today’s challenges are not halting progress, but rather shaping a more mature, embedded and economically driven approach to sustainability.

In 2025, we are seeing three key shifts with major implications for businesses:

1. A move away from high-profile public engagements towards quieter, results-focused actions.
2. Integrating sustainability into core business functions, making it part of the day-to-day fabric of firms.
3. A stronger focus on sustainability as a driver of economic opportunity and customer value.

These changes show how sustainability is adapting to become a vital part of how businesses operate in a rapidly changing world.

Shift 1: Acting on commitments

The first shift is a shift away from splashy public engagements. Over the past few years, bold announcements about net zero targets and ambitious climate goals have dominated the headlines. But now, the focus has turned inward. Organizations are prioritizing action over new promises, working to deliver on commitments they’ve already made.

This change reflects pressures from both sides of the spectrum. On the one hand, it is a response to the anti-ESG movement in countries like the United States, which view sustainability initiatives as distractions from a firm’s ability to deliver value to its shareholders. In turn, it is a response to increased scrutiny of existing commitments and pressure to demonstrate tangible impacts. In many jurisdictions, as greenwashing regulations tighten, firms are becoming more careful about how they communicate their sustainability efforts. The appetite to take on new commitments is significantly reduced, as the focus shifts to execution.

Shift 2: Integrating sustainability into operations

The second shift is that companies are integrating sustainability into their business operations, rather than as a stand-alone initiative. In my conversations with CSOs about how their roles have changed, there are a few things that stand out. Many mention that their role has become less externally facing and more focused on providing support across different parts of their organisation. Their teams are increasingly seen as internal experts and not just “reporting experts”. Instead, they are finding that their input is required in new businesses, potential deals, supplier relationships and strategic decision-making. Sustainability considerations are no longer separable from business considerations.

This transformation parallels the rise of other cross-cutting business priorities, such as data protection. Just as data protection became an integral part of operations, sustainability is increasingly valued as an essential component of business sustainability and success. The idea that every financial decision is a sustainability decision is becoming a practical reality.

Shift 3: Sustainability provides economic returns

Perhaps the most profound change in sustainability is the move away from what is seen as an additional cost or a “non-financial” consideration as it becomes central to economic and financial decision-making. For a long time and in many firms, sustainability goals and financial goals have existed in opposition, or at best, in isolation. Not anymore. Many firms are finally seeing the business value of sustainability from unlocking new markets and opportunities to supporting efficiencies that reduce costs.

I’ve often heard executives say that for sustainability to be sustainable, you have to make money. Now, as the global energy transition accelerates, investments in renewables, electric vehicles, batteries and other green technologies are booming. These technologies have been reinforced in many markets by policy incentives and climate-conscious consumer preferences. On the operational side, improving supply chain resilience is enabling firms to lower their energy costs and build resilience in an increasingly chaotic world.

Another positive development has been the new emphasis on helping clients achieve their financial and sustainability objectives. Instead of focusing on what customers need to do to help the financial institution achieve its goals, financial institutions are leaning into their role as a trusted partner to customers. Firms are offering clients green financial products, guidance on navigating new regulations and optimizing supply chains. This sustainability expertise is becoming a key differentiator and an effective way to win new business and nurture existing relationships.

What these changes mean for your business

These three shifts—focusing on achieving results, integrating sustainability into daily operations, and embracing economic opportunity—are signs of a major evolution in sustainability. For businesses looking to thrive, the implications are clear:

• Action on words: The time for promises and announcements is over. Credibility will come from delivering measurable results.
• Embedded sustainability: Embedding sustainability throughout the firm is critical to providing the knowledge needed for effective operations.
• Creating value: Sustainability must be more than compliance; it should be for growth. Firms that innovate and help clients navigate the transition will be the ones that succeed.