This year promises to be challenging. Although many companies and investors still firmly believe sustainability is a key commercial driver, they face an increasingly complex environment, from trade disputes that may transform supply chains to policy uncertainties that increase unpredictability. Despite challenges, we believe most companies and investors will stay the course on sustainability in the year ahead.

Geopolitical disruptions, a volatile policy environment, increasing climate change impacts, and trade disputes are some of the key challenges that global companies will navigate in the year ahead. Businesses will also grapple with needing to adjust to rapidly changing compliance and disclosure expectations. 

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President Donald Trump’s second term is likely to reshape many environmental regulations, and companies will follow closely the evolving developments in Europe, as the European Union comes under increasing pressure to lift the regulatory burden on companies to increase competitiveness.

Despite a complex operating environment, companies will continue investing in the energy transition and sustainability, from decarbonization of supply chains and sustainable product development to community engagement, because they know it builds resilience.

After years of setting goals, running projects, and preparing disclosures, many companies now see sustainability as an integral part of doing business.

Companies are also ready to embed sustainability deeper into operations. The rapid emergence of AI will help here, as companies turn to the technology to supercharge their sustainability initiatives.

As part of this new phase, companies have started to assess sustainability risks, dependencies, and opportunities in a more structured way through transition planning, particularly for climate, nature, and human rights. This helps them prioritize actions with the highest potential to create value and minimize risks. Companies understand that they are pursuing these actions because it makes business sense, not just sustainability sense.

Companies will think carefully about how to effectively communicate, but for many, their sustainability work will continue at a steady pace. The 2025 Annual Trends Report covers key accelerators and corporate responses across ten trends. Based on extensive research and interviews with subject matter experts, we point out and interconnect the critical developments for each trend and recommend high-level actions for companies to consider in response.

Listen to the Sustainable Connections Podcast where we discuss the Annual Trends Report in more detail.