Top Sustainability Trends to Watch in 2025

Navigating New AI Offerings

Generative AI (GenAI) is set to revolutionize sustainability management by enhancing compliance, improving reporting accuracy, and streamlining resource allocation. Leaders in sustainability have recognized the transformative potential of GenAI to augment resource-stretched teams, enabling a sharper focus on value-driven initiatives beyond mere regulatory compliance.

While many AI tools for sustainability are still in their early stages, they offer significant promise, particularly for mid-sized companies struggling with limited resources and visibility into their supply chains. These companies are likely to benefit most from AI tools designed to untangle data and address value chain complexities. However, the overwhelming array of reporting tools and AI solutions has left some businesses hesitant to adopt them prematurely. As the technology matures, GenAI is poised to become a disruptor in sustainability, helping businesses unlock efficiencies and actionable insights.

The Continued Dominance of Sustainability Reporting

In 2025, sustainability reporting will remain a cornerstone of corporate responsibility as global regulations expand. While federal climate disclosure rules in the U.S., such as the SEC Climate Disclosure Rule, face delays, state-level mandates and international frameworks like the EU CSRD are set to take effect in 2025-2026. These regulations are shifting sustainability reporting from a voluntary effort to a mandatory requirement.

Businesses must rise to meet these heightened expectations by adopting robust data systems that support comprehensive, accurate reporting. CFOs and sustainability teams must collaborate to understand their greenhouse gas emissions, climate-related risks, and overall impact. Fully automated data collection systems and standardized data protocols will be essential to ensure compliance and drive efficiency.

Preparing for compliance

Not all companies are created equal regarding their ESG maturity levels and ability to transform and reduce carbon emissions. However, 2025 will necessitate that companies meet certain minimum standards regarding their reporting endeavors as regulations such as the EU CSRD and California’s Climate Rules start to take effect.

• Fully automated data collection systems, integrating real-time inputs for greater efficiency
• Fully standardized data, ensuring compatibility and comparability across organizations and frameworks.
• Reporting is assured by a third-party
• Extending sustainability management to the entire value chain
• Risks & opportunities quantification (financial impacts)
• High granularity benchmarking
• Integrated risk management and scenario planning
• Use of AI for data analysis, scenario planning, and predictive insights

Heightening Technology’s Role in Carbon Accounting and Reporting

The growing complexity of emissions tracking—particularly Scope 3—demands advanced technological solutions. Automated data collection and AI-driven tools are becoming indispensable in helping companies streamline their carbon accounting processes. These innovations offer:

• Comprehensive Carbon Footprints: Technology allows organizations to track emissions across operations and supply chains, enabling granular reporting and compliance with frameworks like CSRD and California’s climate laws.
• Improved Data Verification: AI detects anomalies and ensures emissions data accuracy, reducing the risk of errors in regulatory submissions.
• Enhanced Scope 3 Reporting: By integrating primary supply chain data with spend-based estimates, technology helps companies better reflect real emissions and identify actionable reduction opportunities.
• Predictive Insights and Scenario Planning: AI tools analyze emissions trends and model future risks, equipping businesses with actionable insights for strategic decision-making.

Climate Risk and the Role of Insurance

Physical risks from climate change are becoming more evident, with extreme weather events such as floods, droughts, and wildfires setting new records each year. In 2024 alone, Hurricane Helene’s unprecedented inland flooding in North Carolina and global heatwaves underscored the urgent need for resilience and adaptation.

Businesses face increasing insurance premiums or, in some cases, the loss of insurability for assets in high-risk areas. In response, there is a growing emphasis on climate risk quantification and adaptation financing. Investors and companies alike are prioritizing strategies to mitigate these risks and build resilience in their operations and portfolios.

Businesses that fail to adapt to climate risks like extreme heat could lose up to 7 percent of annual earnings by 2035, an impact comparable to nearly half of the economic losses caused by COVID-19. This is shown in a new report by the World Economic Forum. Additionally, as climate change increases the frequency and severity of extreme weather events in highly insured regions like Europe and the U.S., corporations and homeowners may face rising insurance premiums or, in the worst-case scenario, find their properties uninsurable.

Demand for Low-Carbon Buildings

The push for low-carbon, energy-efficient buildings is intensifying. Grade A smart buildings, equipped with energy management systems, are becoming the gold standard. Businesses are exploring strategies such as waste heat recovery, partial or full electrification, and LEED certifications to reduce their environmental impact while managing costs. Additionally, optimizing space usage to increase occupancy rates and recover energy efficiencies remains a priority for real estate portfolios.

Reevaluating Climate Goals at the Midway Point to 2030

With 2030 milestones on the horizon, many companies are taking stock of their climate goals. While some organizations may avoid publicizing their progress (a trend known as “greenhushing”), data shows that significant strides are being made. For example, 25% of companies reporting to CDP now have a Climate Transition Action Plan (CTAP) in place. Over 60% of the largest companies in the Financial Times Stock Exchange (FTSE) are on track to meet their climate targets.

This progress highlights the strategic advantage of sustainability. Companies aligning their goals with long-term ambitions and regulatory requirements will be better equipped to navigate market changes and investor expectations.

Market-Driven Sustainability Amidst Shifting Federal Priorities & Policies

Despite political shifts, the market’s demand for sustainability is unwavering. Local and state-level initiatives, bolstered by federal investments, have driven advancements in energy efficiency and building resilience. Key drivers include:

• Corporate Demand for Sustainable Spaces: High-performing buildings are becoming essential for attracting talent and meeting market preferences.
• Investment in Climate Technology: Solar energy, green transportation, and energy storage solutions are seeing significant growth, with the U.S. solar market projected to reach 37 GW of annual installations by 2030.
• Global Collaboration: While the U.S. has focused heavily on transformative legislation like the Inflation Reduction Act (IRA), it accounts for just 10% of global investment in climate and energy transition solutions. This highlights the vast potential for growth and collaboration on the international stage, where additional opportunities for climate action and investment continue to emerge, regardless of whether IRA funding is threatened in the years to come.

How Tango Supports These Trends

Tango’s innovative solutions empower businesses to stay ahead of these trends. From AI-powered data analysis to automated reporting tools, Tango simplifies complex sustainability challenges. Whether it’s managing carbon footprints, optimizing real estate portfolios, or benchmarking climate risks, Tango helps organizations turn data into actionable strategies.

More About WatchWire by Tango

WatchWire by Tango is a market-leading, energy and sustainability data management platform that uses cloud-based software to collect, automize, and analyze utility, energy, and sustainability data metrics. WatchWire streamlines, automates, and standardizes your sustainability reporting process by integrating directly and/or providing reporting exports to ENERGY STAR Portfolio Manager, LEED Arc, GRESB, CDP, SASB, GRI, and more. The platform provides customizable dashboards, which allow asset managers, sustainability managers, engineers, and more to monitor individual key performance indicators (KPIs) and create custom views for specific use cases.

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