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Executive summary
Executive summary
We’re now officially closer to 2050 than 2000, and the hard yards of a just, net-zero transition are emerging. It isn’t an easy road to navigate, and our Sustainable Business Tracker highlights the short-term challenges and long-term aspirations of the sustainable business community.
Summer 2025, and climate change is more visible than ever. The floods in Texas claimed more than 100 lives, while the heatwave that stretched across Europe has been linked to more than 2,300 deaths across a 10-day period. As the impact becomes more severe, the response must be stronger.
It may feel like climate action is at yet another crossroads. Talks of an ESG ‘winter’ in the US with major banks reneging on their net-zero commitments. Globally, corporates are awaiting key updates to major standards that should provide some much-needed clarity on what best practice looks like.
To say that sustainability is on pause would be inaccurate; the movement trudges on, buffeted by the latest geopolitical setbacks. While this Sustainable Business Tracker will indeed point out the issues of political instability and short-term corporate mindsets, it will also showcase how many businesses are building robust Climate Transition Plans, investing in innovative solutions, and examining whether AI could be a game-changer for resource-constrained sustainability professionals.
It’s never a dull moment in the sustainability space, and as our survey proved, sustainability professionals see plenty of challenges, but also lots of opportunities, as they deliver on their remits in 2025. Here’s a summary of what will be explored in this report.
Politics is disrupting ESG
It is no surprise that political instability continues to be the defining macro-trend that is disrupting sustainability. The “Trump 2.0” effect has disrupted supply chains and seen investors shirk away from their ESG aims.
One-third (33%) of edie survey respondents listed political instability as the defining external trend that was disrupting their sustainability efforts right now. Second on the list was the escalating climate crisis (20%), as witnessed by the heatwaves across Europe, with sustainability disinformation (15%) rounding up the top three.
So, businesses are combating a disruptive political backdrop, rampant disinformation that has invaded both the political and public spheres, all while the climate crisis worsens. It is more important than ever that corporates have robust climate plans in place…
Of respondents say political instability is the defining external trend.
Climate Transition Plans are rising up the agenda
In June, Energy Secretary Ed Miliband outlined a vision to turn the UK into the “sustainable finance capital of the world” by introducing new support for large corporates and banks to develop and publish climate transition plans. The Government is consulting on what climate transition plans could look like for firms, building on the work of the Transition Pathway Taskforce.
When it comes to corporate ambition, 50% of edie respondents claimed their organisation already had a 1.5C aligned climate transition plan in place, while 40% of readers stated that climate transition plans were a “high” business priority for the rest of the year.
One thing slipping down the agenda is the Corporate Sustainability Reporting Directive (CSRD), following the EU’s Omnibus that weakens the requirements of the framework. While only 31% of edie respondents fall under the remit of CSRD, of those, 81% had already started compliance work. Read on to find out how businesses have responded to the Omnibus proposals.
Of respondents say their organisation has a 1.5C aligned climate plan in place.
AI could be both a blessing and a burden
Check any thought piece on AI across any medium, and an overarching message emerges: AI is “here to stay”. The sector is growing exponentially, and so is its energy and water demand. Despite those climate concerns, businesses are venturing into AI investments, and sustainability functions could stand to benefit.
According to our survey, 51% of businesses are planning to invest in AI over the next 18 months, though this is not exclusive to sustainability functions. Almost three in 10 businesses (29%) are currently using AI to help with sustainability delivery, with data and reporting the overwhelming area of focus. Our AI in Sustainability supplement of this report delves deeper into the topic, exploring attitudes, concerns and challenges on AI and whether businesses should be required to report on the environmental impact of using it.
Sustainability investments are lacking
Coupled with the macro-trend of economic stability, sustainability professionals listed short-term mindsets as the prevailing internal challenge that the ESG agenda needs to overcome. Based on the current economic downturn, and compounded by political instability, long-term sustainability targets are at odds with decision makers who are looking to the short-term for quick wins and stability.
Lack of funding and investment was cited as the biggest barrier to sustainability internally (32%), closely followed by a short-term profitability mindset (30%). The skills gap (11%), regulation changes (10%), and reporting and compliance workload (5%) round out the top five.
Of respondents cite lack of funding as the biggest internal barrier to sustainability.
Businesses eagerly await the new Net-Zero Standard
At the start of the year, the Science Based Targets initiative (SBTi) published an initial draft of its revised Corporate Net-Zero Standard for consultation. The current proposals outline changes to reporting methods for Scope 1 and 2 and explore the role that carbon credits can play in net-zero targets.
The past 18 months have been a tumultuous time for the SBTi, with experts threatening to quit the initiative over potential changes. The dust is starting to settle, and we can expect the finalised standard in early 2026. Regardless of the fine details of the standard, businesses are eager for certainty as to how they should approach the net-zero transition.
Only 55% of survey respondents were aware of proposed changes to the Net-Zero Standard, and of those, 64% believe that reshaping the standard will improve overall efforts to reach net-zero.
The past 18 months has been a tumultuous time for the SBTi, with experts threatening to quit the initiative over potential changes.
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