As 2024 draws to a close, we’ll hear many predictions about what the year ahead might bring. In the European corporate sustainability sector, one thing remains certain: we will continue to see a high focus on reporting. But will there be room for priorities beyond reporting in 2025? The short answer is: Yes. As the regulatory landscape evolves, key topics, from biodiversity to human rights, gain prominence on corporate agendas. In this outlook, we explore the sustainability issues set to shape the upcoming year.
1. EU remains a driving force
The legacy of the EU Green Deal, a flagship initiative of the previous European Commission, will continue to shape the corporate sustainability landscape. Despite sustainability’s reduced prominence in the new Commission’s agenda, the many initiatives rolled out in the past four years will keep companies busy. In particular, the EU’s Corporate Sustainability Reporting Directive (CSRD), the EU Taxonomy and the approaching Corporate Sustainability Due Diligence Directive (CSDDD) will dominate corporate planning. More forthcoming EU legislation, primarily concerning products, should also be on everyone’s watchlist.
At the same time, uncertainty still plagues the sustainability field. We’re seeing many EU Member States struggle to implement these regulations on a national level. Additionally, messages from the EU about combining the CSRD, CSDDD, and EU Taxonomy into an omnibus directive are currently causing confusion among businesses. The EU is expected to provide much-needed clarity on this in February 2025.
2. Reporting will continue to dominate 2025
With around 50.000 companies preparing for the CSRD, there’s no doubt that reporting will stay on top of everyone’s mind. In spring 2025, the first wave of companies subject to the CSRD will release their first sustainability statements aligned with the European Sustainability Reporting Standards (ESRS). These reports will raise the bar on corporate transparency and lead to more aligned approaches to CSRD implementation across sectors. However, we can expect debates about differing approaches among reporting companies after the first ESRS-aligned annual reports arrive.
At the same time, reporting is set to become more “business as usual” as responsibilities are anchored beyond sustainability departments, with finance departments and the newly established ESG controllers taking the lead.
Will we see a backlash in 2025 against the strenuous auditing requirements many companies are facing? The Commission’s leading experts have been calling for “pragmatic CSRD implementation“, which starkly contrasts with what companies are currently experiencing.
3. The return of the truly transformative strategies
Once companies complete their double materiality assessment and pinpoint what disclosure requirements under the ESRS apply to them, attention will shift to strategic action and genuine impact management. The ESRS has plenty of strategic elements that companies must capture and address as part of their reporting. In 2025, we will see companies in the scope of the first and second wave of CSRD reporting not only wanting to improve how they disclose their strategies but also wanting to address the gaps unveiled by the double materiality exercise. This will be a much-welcome development, especially if companies dare to reach beyond their scope 1 and 2 (and let’s all hope we’re past that stage, shall we?).
4. The need for credible climate transition plans
Speaking of scope 3 – in 2025, climate specialists will again have their hands full, as more and more companies will need to improve their greenhouse gas inventories and establish detailed climate transition plans. This is positive news, as many organisations saw climate action stall while reporting obligations took priority. The push for more robust climate transition plans is driven not only by the CSRD and companies’ commitments to Science-based Targets but also by a specific requirement of the CSDDD (§22).
5. Hello, biodiversity – it’s finally your time
Among sustainability practitioners, there’s been a longstanding frustration about the lack of action on biodiversity. In 2025, however, we will see the slow but certain rise of biodiversity on the corporate agenda. This development is already emerging and primarily driven by double materiality assessments, highlighting the urgency of corporate biodiversity impacts. Companies eager to take action on biodiversity in the upcoming year should not wait. Even without detailed frameworks for measuring biodiversity impacts, companies can get started by assessing their primary biodiversity impacts, risks and opportunities and using that to build a strategy to mitigate these.
6. The rise of due diligence and human rights topics
Managing risks and impacts in your value chain is becoming increasingly critical for businesses. As part of the ESRS, companies must disclose value chain issues and outline the steps they are taking to address them. With the CSDDD on the horizon, thorough value chain due diligence is set to take centre stage. Human rights concerns are expected to rise higher on corporate agendas, and the OECD’s six steps for responsible business conduct will become a key part of company operations. This shift will bring new responsibilities for procurement teams, requiring them to consider sustainability and human rights when selecting or deselecting suppliers.
7. Navigating new AI offerings
Throughout 2024, new AI solutions in the sustainability space have started to emerge. Although many of these are still nascent, AI is set to be a disruptor in the sustainability space. Mid-sized companies, which often struggle with limited sustainability resources and lack visibility beyond tier 1 of their supply chains, will be particularly receptive to tools that help untangle data and value chain complexities. At the same time, many businesses may hesitate to adopt new solutions too quickly, given the overwhelming number of reporting and AI tools available. Additionally, as sustainability often involves navigating change in complex organisations, the human element will remain crucial – even as AI becomes a more integral tool for sustainability professionals.
Sustainability transformation in high demand
Sustainability practitioners will continue to see their roles expand, with sustainability becoming increasingly embedded in daily business operations in the upcoming year. However, political uncertainties within the EU and abroad, including recent US elections, will create somewhat of an unpredictable landscape for corporate action on sustainability.
As the new year approaches, one thing remains clear: transformative sustainability action is more needed than ever.
Is your organisation ready to embrace the opportunities and challenges ahead?
Connect with Anniina Kristinsson, Managing Partner at Nordic Sustainability.
Nordic Sustainability is a Copenhagen-based sustainability consultancy working closely with companies across Europe to accelerate business transformation.
Read more:
Author details
Anniina Kristinsson
Managing Partner
