Corporate Sustainability in 2025, Shifting Focus, Deeper Impact
Why in News?
As global climate concerns intensify, 2025 has emerged as a critical year for corporate sustainability. The last year saw several large corporations retracting their Environmental, Social, and Governance (ESG) commitments due to economic slowdown and regulatory complexity. However, new frameworks, biodiversity finance, and a shift toward measurable impact are gradually reshaping the future of sustainable business practices.
Introduction
Corporate sustainability in 2025 is no longer just a checkbox for compliance — it is becoming central to business strategy. Despite backtracking by some major firms in oil, gas, e-commerce, and FMCG sectors, there’s a growing realisation that responsible business is not optional but essential for long-term resilience.
Key Issues and Developments
1. Backtracking & Regulation Overload
Economic downturns have led to ESG initiatives being deprioritized. Complex reporting standards, especially for scope 3 emissions, have made ESG compliance difficult and expensive. In response, regulators are adapting:
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SEBI made its core ESG rules voluntary until 2026.
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The EU is simplifying requirements for smaller companies.
This has turned 2025 into a year of ESG adaptation rather than acceleration.
2. Climate Resilience
Recent extreme weather events — record-breaking snowfall in Seoul, wildfires in Bolivia, and floods in Central Europe — have pushed businesses to take physical climate risks seriously. Investment in adaptation strategies, both large and small, is growing.
3. Biodiversity Finance & TNFD
With half the global economy depending on nature, biodiversity has become a key sustainability issue. The Taskforce on Nature-related Financial Disclosures (TNFD) has helped corporates assess biodiversity loss and finance regeneration projects.
4. Greenwashing & Accountability
As green regulations tighten, the risk of greenwashing has increased. Companies may falsely present themselves as eco-friendly without meaningful changes. This is prompting calls for stronger audit systems, compliance roles, and data verification mechanisms.
5. Increased Role of Finance and Legal Teams
Sustainability is being embedded in finance and legal departments. Positions like “ESG controller” are becoming mainstream, focusing on integrating sustainability into core regulatory and financial practices.
6. Design for Sustainability
Product development is now being shaped by sustainability goals. Long-term thinking, lifecycle analysis, and responsible sourcing are being prioritized. Materials used must now support heat resistance, biodiversity, and efficient resource use.
Conclusion
Corporate sustainability in 2025 is at a turning point. While the previous year revealed hesitations and rollbacks, 2025 is marked by regulatory evolution, deeper integration, and a more sincere effort to blend sustainability with profitability. Businesses that adapt with honesty and innovation are likely to be more resilient and better prepared for future challenges.
Q&A Section
1. Why are some companies stepping back from sustainability goals?
Due to global economic slowdown and complex ESG regulations, some firms are treating sustainability as a lower priority in the short term.
2. What is TNFD and why is it important in 2025?
The Taskforce on Nature-related Financial Disclosures helps companies assess and finance biodiversity goals. In 2025, it is key in guiding firms to measure and reduce biodiversity loss.
3. What role do finance and legal departments play in corporate sustainability now?
They are now central to sustainability strategies, with new roles like “ESG controllers” overseeing compliance, data, and sustainable finance disclosures.
4. How are companies responding to climate resilience needs?
By investing in adaptation strategies — both infrastructure and operational — to manage increasing physical risks from climate change.
5. What is the focus of sustainable design in 2025?
Products are now being developed with long-term environmental impact in mind, using materials that promote energy efficiency, biodiversity, and responsible sourcing.
