Sustainability professionals now work in a place where business and government collide.
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If it hadn’t been clear before, the first several weeks of 2025 make plain that many of the foundational elements shaping the global economy over the past three decades no longer define the intersection of business and society.
The many – and often dramatic – shifts emanating from Washington are the most discussed and visible changes, potentially re-ordering America’s role in the world and the way trade and politics are defined.
A closer look, however, shows how profoundly the tectonic plates have shifted globally.
Now, it seems uncertainty defines our times. And while much remains not clear, we can see the many ways our world changes – and we must adapt to them while staying focused on the core objectives of the sustainable business agenda.
A new sustainability framework for 2025
Uncertainty best describes business in 2025 with public policy and geopolitics only part of the shift. This year, the sustainability dynamic can be placed into five categories of change.
Economics
The period since the fall of the Berlin Wall and China’s return to a leading role in the global economy had seen relative calm and steady integration of nations and peoples. Today, the world risks a slide into nationalist trade policies, seen most visibly in the tariffs promised by the new US administration, but also questions about the European Union’s omnibus proposal to “simplifiy” sustainability for businesses, and the stability and direction of the Chinese economy. The notion that economic integration would lead to less conflict can no longer be assumed.
Emerging technologies
With the rapid rise of generative AI poised to upend energy markets, great power relations, and the nature and availability of work. We are still seeing profound impacts from last-gen technologies like social media, which have fueled mis- and disinformation on a global scale, which in turn has deepened social divisions.
Environment
The climate crisis and its cousin biodiversity loss have “mainstreamed” extreme weather, with rising economic costs, social dislocation, and risks to infrastructure. The shift away from the many climate commitments made at the start of the decade is discordant when compared to the clear evidence of climate disruption: something’s got to give.
Geopolitics
Tensions between the US and its post-WW2 allies are at a level not seen in decades, possibly since the rise of the postwar world. A shooting war continues in Europe. China continues to rise and build its influence. Global cooperation as represented by the UN system limps along – the failure of the COP negotiations on climate, nature, and land in 2024 suggests a model teetering on the verge of collapse.
Public policy
Incumbent parties fared exceptionally poorly around the globe in 2024’s year of elections. Policymakers are challenged by all the changes listed here and implement new laws impacting businesses which often conflict with those of countries where their companies do business.
These changes are profound, and for the most part create more risks than opportunities. One might conclude that sustainable business should now take a backseat for companies. That would be a dangerous misreading of what our times require, and what strong, resilient business strategy demands.
Indeed, five underlying realities are every bit as relevant for business today as five years ago. In fact, they are likely to grow in importance over time. At a minimum, these five realities must coexist with the current turmoil; in fact, they may well end up having more staying power than our volatile moment.
Climate crisis
Election results do not change the law of physics. The financial costs of the climate crisis threaten to hobble business planning for some time to come. Many companies now undertake scenarios to understand the transition risks and physical risks of a heating climate. These scenarios are now being crafted in a world in which climate scientists are struggling to make sense of developments that deviate from their modelling. This should send a chill through every boardroom. On the plus side, a multi-trillion-dollar opportunity for companies addressing climate and nature remains – whether incumbents or new and more innovative entrants – that deliver needed products and services that enable resilience.
Diversity
While the US government has fostered a rhetorical and policy attack on “illegal DEI,” gender equality remains a business imperative – especially in markets in Asia which are further behind on diversity. No business can afford to ignore that their employees and customers are diversifying. Any company that does not value the importance of inclusion will alienate rather than attract the most valuable customers and employees, and risk falling behind on innovation, employee satisfaction and retention, and reputation.
Employee opinions
Despite tumult and a backlash in the West, employees expect the companies they work for to address sustainability issues. The most recent annual survey of global workforces in 21 countries conducted by Deloitte found that 61 per cent of staff wanted to see their companies do more to address climate and diversity.
Regulations
Even with Washington pulling out of sustainability commitments and regulations, and Europe likely pulling back on some, the architecture that remains in place is significantly more robust than it was at the dawn of the 2020s. What’s more, it is also far more global, with regulators across Asia requiring climate disclosure, European regulators sustaining if streamlining the approach across the EU, and American states and cities, including California, the fifth largest economy in the world, setting important rules. Whatever emerges from Capitol Hill, the biggest companies operate globally and most consider multiple jurisdictions in their sustainability plans.
Rule of law
Finally, the most foundational matter of all, the rule of law, remains essential for business. With democratic decline evident in many corners of the world, the rule of law remains non-negotiable for business. Indeed, greater engagement by business continues to be not only not “just political,” but a matter of self-protection to enable the sanctity of contracts, fair dispute resolution, and stable supply chain relationships.
What to make of all this? At a time when laws and regulations are being eliminated or rewritten, the sustainability imperative remains strong but companies need to adjust their approach.
Here are a few ways companies should update how they think about sustainability.
- Focusing more attention on business value, measuring financial impact, and promoting innovation.
- Keeping ambitious commitments but communicating the uncertainties and dependencies on which the achievement of the goals depends.
- Shifting the narrative – as well as priorities – so that the needs of the average person the business impacts in their operations and services are addressed and communicated.
- Standing firm with investors on the importance of creating value and resilience for the long-term.
- Respecting the basic principle that the rule of law remains sacrosanct.
Moments of turmoil always bring change and innovation. With the sustainability agenda buffeted by multiple crosswinds, companies that come through this period of change healthy will be the ones that stay true to their principles while showing how their efforts improve business performance as they rapidly adapt in how they pursue them.
In 2025, sustainability has never been more critical to a company’s bottom line.
Aaron Cramer is president and CEO of BSR, a sustainable business network and consultancy, and Steven Okun is CEO of APAC Advisors (Singapore) and a senior advisor to BSR.
