2024 has been a challenging year for corporate sustainability in theory and in practice. For instance, debates about the value of organizations’ sustainability policies played out in the media. At the same time, climate-change influenced weather events left some localities struggling to recover while highlighting the urgent need for brands, organizations, and governments to embrace or enhance sustainability solutions and actions.
Rising public concern is also driving corporate sustainability practices. Public pressure to act on sustainability initiatives will continue to rise in part because many consumers don’t think industries are doing enough yet. For example, a 2024 federal consumer attitude survey found that almost half of Americans (49%) think airlines need to do more to mitigate their environmental impact, while 38% hold the same opinion about the financial industry as a whole. More than a third (36%) believe the tech sector should also do more.
However, many companies are embracing circularity principles. More than 70% of global organizations have embraced recycling in their manufacturing processes, have water stewardship programs, and measure the energy they use for industrial processes. Consumers don’t make policy, but their preferences will drive companies’ decisions to do more -- not only to meet customer demand but also to remain competitive in a market where 27% of consumers are willing to pay more for sustainable products.
Despite their motivation to buy sustainable items, many consumers don’t feel they have the information they need to make informed purchasing decisions. One survey found that 52% of all consumers think that organizations and brands “are greenwashing their sustainability initiatives.” Among Gen Z consumers aged 18 to 24, 76% hold this belief. Regulations that require transparency about supply chains and emissions can help meet customer expectations and verify companies’ sustainability efforts.
The European Union is leading in this area. The EU Carbon Border Adjustment Mechanism (CBAM), which takes effect in 2026, will require EU-based businesses that import goods to document the carbon emissions and pay adjusted carbon taxes on those goods. The goal is to level the cost of emissions embedded in products regardless of where they’re produced, in order to keep cheaper higher-emissions goods from undercutting more sustainable ones.
Another sustainability regulation, the Corporate Sustainability Reporting Directive (CSRD), took effect in the EU in 2023. The CSRD requires large and publicly listed companies (with a few exceptions) to report their sustainability actions, impacts, risks, and opportunities to the public. The first of these reports are due from companies in 2025, giving regulators and consumers a clearer picture of what companies are doing and how they’re sourcing their products.
Taken together, the data required for CBAM and CSRD can help inform the digital product passports that will be required in the EU starting in 2026. The passports will trace their origins and impacts from raw materials through manufacture, transport, and sale, facilitating a clearer understanding of circularity. Once EU companies offer this kind of consumer-facing transparency at the retail level, shoppers--even those outside the EU--will almost certainly expect all companies to provide the same kind of information. Once lawmakers and policy advisors have a chance to see how the EU regulations work in practice, it’s likely that the US will adopt similar rules. These initiatives could also lead to the implementation of holistic sustainability scorecards that help consumers assess the impact of products by making apples-to-apples comparisons among different types of environmental impacts, such as water quality and energy consumption.
The CBAM goal of accounting for supply chain emissions highlights another trend that will continue and perhaps even accelerate in 2025: efforts to curb carbon emissions and reduce the concentration of existing carbon in the atmosphere. Recently, carbon dioxide removal (CDR) efforts have stepped up and included more novel technologies, according to the 2024 international State of Carbon Dioxide Removal report. More than $3.5 billion in recent federal funding for regional direct air capture hubs in the US underscores the scale of the effort to remove carbon from the atmosphere as quickly as possible. Given the energy intensity of many carbon removal pathways, continued innovation in carbon reduction will be especially important as demand for electricity continues to increase.
One reason energy demands are rising is that AI — especially generative AI — requires a lot of power to function. In the short run, the growing use of AI has the potential to increase greenhouse gas emissions. However, we expect to see the growth of AI accelerate demand for grid optimization and renewable energy usage that reduces the pollution caused by AI and other industries.
We also expect AI to play an increasingly important role in supporting sustainability initiatives in 2025 and beyond. For example, consider the amount of documentation required to comply with regulations like CBAM and CSDR. AI can help organizations assess their readiness for compliance, assemble the thousands of documents required to comply, and analyze supply chains for opportunities to optimize.
On a wider scale, AI-enabled sensing and monitoring systems have the potential to make virtually every process more efficient. For example, more powerful analytics will make it easier to track the use and preservation of key natural resources, like tree cover in rainforests. AI and related technology can also help find resources for the decarbonization transition. The US Geological Survey recently used machine learning alongside water testing to find a lithium reserve buried beneath Arkansas that could exceed the amount needed to supply all of the world’s electric vehicle batteries. That could have a global impact on emissions reduction that far surpasses the emissions impact of running the ML model.
One solution to the plastic waste crisis -- using a marine fungus to digest the plastic -- points to a trend of greater interest in using natural systems to address sustainability challenges. Having options like this and using macroalgae to capture and store carbon, for example, can help humanity address the carbon and plastics problems from multiple angles. These strategies also emphasize the fact that our best carbon sink is a healthy planet with healthy interconnected systems. Especially within CDR, one can expect to see an increase in the number of companies focusing on nature-based pathways to carbon removal.
As far as the sustainability industry is concerned, a growing awareness of planetary boundaries and resource scarcity leads us to another key trend in 2025 -- a greater understanding of and commitment to circularity. Whether that circularity takes the form of source-to-store sustainability passports, new regulations on carbon emissions, or energy grid optimization with renewables, the public and consumers will continue to push for healthier options and greater accountability in the year ahead.
Martine Stillman, VP of Engineering at Synapse, part of Capgemini Invent, leads the engineering team in staying at the cutting edge of innovation, ideation, and technical excellence, and is one of the architects of Synapse’s Sustainable Product Development practice.
Dylan Garrett, VP and Head of Climate Tech Business at Synapse, works with companies that are leveraging hardware technology to fight climate change with solutions that range from carbon dioxide removal, water conservation, waste management, energy storage and production, and beyond. He is also the host of the podcast Hardware to Save a Planet.
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