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Executive summary
Executive summary
Across the past 12 months, edie’s Sustainable Business Trackers have highlighted how policy, internal buy-in and expanding resources are all crucial enablers to the sustainability movement. As highlighted in the final Tracker of 2024, businesses remained committed to the cause and are primed to ramp up progress in 2025.
2024 will be looked back on as a tumultuous year for corporate sustainability efforts. The cost-of-living crisis has seen many organisations switch to short-term mindsets, which makes investing in projects with longer payback periods far less attractive to the board. The swelling resource requirements – both time and costs – to comply with regulation and disclose to voluntary investor demands are stretching sustainability teams. A change of Government could bring some much-needed agency to green markets, but many businesses feel it is too soon to tell whether this will act as an enabler.
Signing off on the year, the political processes of COP16, COP29 and the UN Plastics Treaty have been met with disappointment, but should reaffirm to businesses that they need to venture on with their own climate plans and stay ahead of the curve as global markets and policies eventually shape up.
With 2025 shaping up to be a crucial year for re-evaluating targets – with some helpful resources on the way from the Science Based Targets initiative (SBTi) and the UK Government – let’s first look back at how 2024 has shaped corporate sustainability, for better or worse.
Corporates content with ESG progress
For each Sustainable Business Tracker, edie asks respondents to rate their organisation's current level of ambition when it comes to delivering sustainability and climate action, on a scale of 1-10. The number tends to hover around the 6/7 mark and the overall average for 2024 sits a 6.74.
Additionally, our latest Tracker asked organisations to state how happy they were with the progress they achieved over the past 12 months. In total, 52% are happy with the efforts and initiatives delivered in 2024, compared to 33% who are unhappy. A further 15% believe that the level of progress they aimed to achieve has stayed the same.
Out of 10, how happy are you with your organisation's ambition when it comes to sustainability and climate change action? (Average for 2024)
Short-termism was the biggest thorn in the ESG movement
The economic downturn experienced in the UK has hampered corporate efforts to accelerate climate action. For each Business Tracker, edie asked its audience to rank the biggest macro challenge facing ESG, and short-termism often comes out on top. Indeed, in the latest Tracker, 32% of businesses say that the cost-of-living crisis is the biggest challenge facing their organisation, followed by political uncertainty (19%), escalating climate change (18%) and energy prices (15%).
This can be seen at a micro level too, with businesses highlighting that a lack of funding and investment is by far the biggest internal challenge stifling the sustainability movement. In total, the short-term mindset was cited by 29% as the biggest micro challenge, closely followed by a lack of funding and investment (25%). As such, more than half of businesses are being impacted by financial mindsets when it comes to delivering on sustainability targets.
2024 was the year of reporting
Sustainability professionals are meant to be forward-looking by nature; analysing the next innovation and forging transition plans that will help businesses meet long-term goals. However, many sustainability practitioners have spent 2024 looking back at the data in order to formulate reports and comply with legislation.
The alphabet soup of non-financial disclosure added some notable new frameworks (more on that in the Reporting and Resource Allocation segment of this report) and, unsurprisingly, reporting and disclosure was cited as the biggest focus area in 2025. In total, 32% of respondents highlighted that area of focus, followed by internal engagement (21%) and getting to grips with target-setting processes (18%). These focus areas look set to shape 2025 as a big reset year for corporate sustainability, as businesses set new targets and better integrate sustainability into internal functions that should ultimately mobilise ESG efforts.
New policies not yet driving net-zero action
One of the biggest stories of 2024 was the end of the Conservative Government. The General Election saw Labour storm to victory and the subsequent six months have seen some enabling policies introduced, including a landmark new emissions goal for 2035. Or at least, they should be enabling…
edie’s survey found that 70% of businesses believe it is “too soon to tell” whether the new Government will spur progress to net-zero. Worryingly, 20% believe the Government hasn’t helped at all, compared to 10% who believe that it is a welcome change. Clearly, more is needed from Government, but the UK’s impressive participation at COP29 could signal some positive change.
Proportion of respondents who believe it's 'too soon to tell' whether Labour will spur progress to net-zero.
The board is finally onboard with ESG
It is a common claim that some sustainability teams operate in silo, detached from the rest of the decision-makers within the business. While that is still the case for many, the deluge of new compliance frameworks and reporting regulations has made more businesses aware of ESG, and as a result, sustainability teams have a direct line to the C-suite.
edie polled its readers on the areas of the business that were most and least engaged with climate action. In terms of function, the chief executive is, on average, the most engaged, with 79% of respondents claiming their CEO was either “somewhat” or “highly engaged” with sustainability. This was followed by the board (75%) and marketing (74%).
However, as more scrutiny is placed on corporate green claims and the risk of greenwashing that comes with unsubstantial messaging, many businesses will need to spend 2025 getting their legal team aware, as it ranked as the least engaged function (44%).
Carbon markets aren’t yet viewed as an asset
If reporting was the big focus area for businesses in 2024, the ongoing developments shaping the carbon markets could well be the focal point in 2025. From (finally) formalising Article 6 of the Paris Agreement, to fresh consultations and codes examining the Voluntary Carbon Markets (VCM), businesses could, at long last, have some stringent guidance on how to interact with the contentious aspect of offsetting and carbon removals.
According to the Business Tracker, 23% are currently utilising carbon credits now, compared to 21% that have no intention of using them. The most common process seems to be that businesses will reduce emissions as much as possible and then explore offsetting (30%), and 54% of business “strongly agree” that offsetting should only be used for unavoidable emissions.
54% of business “strongly agree” that offsetting should only be used for unavoidable emissions
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