In this blog, we focus on the top trend for sustainability in 2025—is your business ready to respond?

Recently, there have been big changes in global politics that might slow down sustainability efforts in the United States. For example, there are threats to roll back the Inflation Reduction Act (IRA) and relax environmental regulations. This could mean that the country might not focus as much on sustainable development. However, some states like Colorado, California, New York, and Massachusetts are taking the lead in sustainability. They are implementing policies and initiatives to reduce environmental impacts in their regions. This shows that sustainability in the United States is still progressing. Additionally, in 2025, European reporting requirements will become stricter, affecting many U.S. manufacturers and service providers. In short, the Federal Government is not the only player in sustainability.

In this blog, we focus on the top trend for sustainability in 2025—is your business ready to respond?

1. Circular Economy Takes Center Stage

A circular economy is a system where products, materials, and resources are reused, refurbished, and recycled. This is different from the traditional linear economy, which follows a ‘take, make, dispose’ pattern. By 2025, the circular economy will become even more popular. In this system, products are designed to last longer and be easy to take apart, so materials can be reused instead of thrown away.

Circular economy principles will not only reduce waste but also create new business opportunities. Companies will be under pressure to innovate with product design, packaging, and resource management to ensure that materials can be recovered and reused. Governments, too, are likely to implement policies that incentivize the adoption of circular models, making it a significant trend in the coming years.

2. Regulatory Compliance + Reporting

States, governments, and major buyers are requiring more reporting on sustainability. This makes sustainability initiatives a way to reduce risks. Although compliance and reporting can be challenging, they create transparency. This helps customers, employers, and investors make better decisions.

The shift is not merely a bureaucratic hurdle but an opportunity for businesses to enhance their operations and build trust with stakeholders. By adhering to rigorous reporting standards, companies can demonstrate accountability and commitment to sustainable practices, thus gaining a competitive edge in the marketplace. As these regulations evolve, businesses must stay informed and agile, ensuring they meet both current and future compliance requirements.

3. Lowering Emissions

Once companies know their environmental impact through compliance and reporting, they can take steps to lower emissions. More organizations are investing in technologies and processes to reduce their carbon footprint. This includes renewable energy projects and carbon capture and storage initiatives. Even if federal support changes, many private investors and state governments continue to focus on reducing emissions. This shows the importance of this trend in achieving a sustainable future.

These efforts are often passed down to suppliers—hence the prior note on compliance and reporting. For companies with bold emissions reduction targets, their suppliers are likely to be required to report and show annual improvements too.

4. Capturing AI and Its Emissions

Artificial Intelligence (AI) is becoming a powerful tool in the fight against climate change. It offers innovative solutions for sustainability and emissions tracking. By using AI, companies can optimize energy use, predict equipment failures, and improve resource management, leading to significant reductions in carbon footprints. For example, AI can analyze data from smart grids to improve energy efficiency or monitor industrial emissions in real-time to reduce waste and pollution. Additionally, AI can help forecast environmental impacts, allowing companies to take proactive measures to mitigate adverse effects.

However, the rise of AI also presents a paradox in the realm of sustainability. The computational power required to train and run AI models is substantial, leading to increased energy consumption and, consequently, higher emissions from data centers. These facilities, which house the servers and infrastructure necessary for AI operations, are significant contributors to global carbon emissions. As AI continues to evolve and expand, the demand for data processing and storage will only grow, potentially exacerbating the environmental impact. Therefore, while AI holds promise for enhancing sustainability, it is crucial to address its own carbon footprint by investing in greener technologies and more efficient data center operations. Balancing the benefits of AI with its environmental costs will be essential in ensuring a sustainable future.

5. Sustainable Finance and ESG Investing

Environmental, Social, and Governance (ESG) investing is poised to grow substantially in 2025. Investors are increasingly recognizing that sustainability is not just a moral imperative, but also a financial one. A growing body of evidence suggests that companies with strong ESG practices outperform their peers in the long term, making ESG investing an attractive option for both institutional and retail investors. But, the term ESG may go away amidst political pressure.

Green bonds, sustainability-linked loans, and other forms of sustainable finance will continue to rise, providing capital for projects that aim to address environmental challenges. By 2025, companies and financial institutions will likely face more stringent regulations and reporting requirements regarding their ESG performance. As investors continue to demand greater transparency and accountability, sustainable finance will become a cornerstone of global markets.

Conclusion

Sustainability in 2025 will be shaped by a combination of technological advancements, societal shifts, and increasing awareness of the environmental challenges facing our planet. The trends outlined above represent just a fraction of the progress expected in the coming years. From circular economies to net-zero emissions, nature-based solutions to sustainable finance, the path toward a more sustainable world is already being forged. As we approach 2025, it’s clear that businesses, governments, and individuals all have a crucial role to play in ensuring a more sustainable future for generations to come.

Laura Steinbrink and Emerald Built Environments, a Crete United Company, help teams identify whole system visions for sustainability that create practical success for stakeholders. They use keen facilitation skills to move clients and project teams through difficult decisions by pinpointing what matters and exploring team knowledge for innovative solutions. Laura has directly participated in over 50 LEED projects nationwide, including BD+C, ID+C, O+M, C+C, ND, and Homes. She is the firm’s founder and managing member and continues to work with clients, helping them set and achieve sustainability goals and strategies. Recently, she's been busy leading the firm's E in ESG practice area, which supports sustainability strategy development, stakeholder engagement, GHG emissions reporting, and compliance frameworks, including TCFD and GRESB for large privately held companies.