ESG Monthly News Update: January 2025
Navigating the 2025 Corporate Sustainability Landscape
As we kick off 2025, the corporate sustainability landscape is anything but business-as-usual. Companies face a range of evolving challenges, from ensuring compliance with new and increasingly complex regulations to the growing need for investor-grade ESG data that can withstand heightened scrutiny. In this environment, the pressure to act on sustainability is intensifying, but so too is the opportunity to drive long-term value through strategic, integrated approaches.
One key shift is the narrowing focus of ESG strategies, with companies placing more emphasis on material risks and opportunities—those issues that will truly move the needle. As ESG evolves from a buzzword to a toolkit for managing sustainability, companies are moving beyond aspirational goals to building real, measurable impact into their operations.
As political and environmental uncertainty grows, especially with the ongoing challenges posed by extreme weather events like the California wildfires, companies must act quickly to adapt. The increasing frequency of climate-related disasters and unpredictable geopolitical shifts are underscoring the need for robust, adaptive strategies. The competition for climate innovations—alongside the need for improved risk management—will push companies to invest in new technologies and processes that not only drive sustainability but also future-proof their business.
In line with these shifting priorities, businesses must show measurable progress in managing both environmental and governance risks, proving their commitment to long-term resilience in a volatile world.
At Summit Strategy Group, we're here to help you navigate these changes and build a resilient, sustainable future. Contact us today.
Contributor Spotlight: Camille Fordy
Camille Fordy is the Vice President and ESG Practice Lead at Summit Strategy Group, where she advises organizations on ESG strategy, reporting, and stakeholder engagement. With experience in government and a background in corporate sustainability, Camille helps clients navigate the complexities of sustainability in an evolving regulatory environment, delivering strategies that create long-term value and resilience.
What We Read in January 2025
As sustainability continues to be a key focus in 2025, S&P Global outlines the top trends shaping corporate strategy this year. You can explore these insights in S&P Global's Top 10 Sustainability Trends to Watch in 2025 here.
The Sustainability Dividend: A Primer on Sustainability ROI
The Conference Board, December 5, 2024
As sustainability becomes a business imperative, companies face increasing pressure to measure the ROI of their sustainability efforts to gain stakeholder trust and ensure long-term success.
Unlike traditional ROI, sustainability ROI measures long-term financial, environmental, and social value, with companies needing to balance tangible (measurable) and intangible (harder-to-quantify) benefits, such as brand reputation and employee satisfaction.
Sustainability communication remains a key opportunity, as few companies capitalize on transparent communication to effectively showcase sustainability results, which is critical for internal and external support.
Many companies are integrating sustainability into core business strategies, with growing involvement from CFOs and GCs to align sustainability goals with overall business objectives.
41% of companies are unsure or underperforming in assessing sustainability ROI, highlighting the need for better frameworks and collaboration between finance and sustainability teams.
ESG in 2025: Significant adaptation in sustainability emerges as business-as-usual
Thomson Reuters Institute, January 3, 2025
Companies are expected to focus more on material risks and opportunities within their ESG strategies, narrowing the scope of their sustainability efforts to more practical, impactful actions.
Corporate governance will be increasingly critical, as businesses face heightened political and environmental uncertainty. “Uncertainty leads to an indirect tax on companies,” with governance practices becoming key to managing risks effectively.
ESG will become more deeply integrated into core business strategies. According to Miriam Wrobel from FTI Consulting, “At its essence, ESG is a toolkit for companies to identify material risks and opportunities. Being smart about maximizing opportunity and minimizing risk will never go out of style.”
The U.S. will see rising anti-ESG regulations under the new administration, but states like California continue to advance their own regulatory frameworks, such as carbon disclosure laws.
The risk of greenwashing litigation will increase as companies face greater scrutiny over their ESG practices, particularly in areas like supply chain management and net-zero claims.
Amazon Says Its Green Plans Won’t Change as Trump Takes Office
Barron’s, January 16, 2025
Amazon reaffirmed its commitment to net-zero carbon emissions by 2040, despite potential rollbacks in renewable energy subsidies under the Trump administration.
The company remains the largest corporate buyer of renewable energy globally, with investments in 33 gigawatts of renewable power across over 600 wind and solar projects, enough to power 8.3 million homes.
Rising electricity demands from data centers, driven by artificial intelligence and cloud computing, could add 44 gigawatts to the U.S. grid by 2030, emphasizing both the challenges and opportunities for scaling renewable energy solutions.
Big tech companies like Amazon are driving corporate investment in renewable energy, but as they expand AI and data center operations, their ability to meet long-term climate commitments remains uncertain amid increasing energy demands and shifting regulatory landscapes.
California Wildfires Are A Wake-Up Call For Climate Change Adaptation
Forbes, January 21, 2025
AccuWeather estimates the economic losses from the Los Angeles wildfires to reach $250 billion, surpassing damages from Hurricane Helene and the entire 2020 wildfire season.
Outdated infrastructure designed for mid-20th-century conditions is ill-equipped for today’s climate challenges, exemplified by L.A.'s reservoir system being unable to handle widespread fires.
Climate change intensifies extreme weather events, affecting food prices, tax revenues, bond markets, and energy grids worldwide, with hydropower reliability declining due to droughts and floods.
Adaptation strategies must prioritize maintaining critical infrastructure, redesigning systems to meet new climate realities, and retrofitting buildings to withstand hotter, more volatile conditions.
Brussels under pressure to curb green agenda in response to Trump
Financial Times, January 26, 2025
Big businesses, including ExxonMobil, are pressuring the European Commission to scale back sustainability regulations, citing their negative impact on investment. ExxonMobil warned that its €30bn investment in hydrogen and carbon capture technologies would be limited in Europe due to excessive regulation.
The European Round Table for Industry, representing major industrial, consumer, and energy companies, criticized the EU's sustainability rules for being overly complex and vague, with unclear reporting and disclosure requirements.
European Commission president Ursula von der Leyen has acknowledged concerns over the regulatory burden, promising a simplification of sustainability rules to boost EU competitiveness, which some EU member states, like France and Germany, are advocating for.
The backlash against EU sustainability rules comes as the U.S., under President Trump, pushes for deregulation, further challenging Europe’s ability to maintain its green agenda while staying competitive in a global economy.
Post-Davos, will companies redouble sustainability efforts - or heed Donald Trump?
Reuters, January 28, 2025
President Trump’s virtual address at the World Economic Forum (WEF) emphasized protectionist policies, urging businesses to relocate to the U.S. under threat of tariffs, while rolling back environmental regulations.
Global leaders, including WTO's Ngozi Okonjo-Iweala and China's Vice Premier Ding Xuexiang, advocated for international collaboration to tackle climate change, highlighting trade as a tool for achieving net-zero emissions by 2050.
The Democratic Republic of Congo announced the creation of the Kivu-Kinshasa green corridor, set to become the world's largest tropical protected forest reserve, aiming to blend conservation with sustainable economic development.
CDP's Corporate Health Check report indicates that while 46% of European companies are on track to meet their emissions targets, only 19% of Chinese companies are aligned with their climate goals.