Back in January, I said, “The pendulum has never swung so far so fast.” Back then, when everything was moving at lightning speed, we knew we were entering a very difficult period for sustainability. It’s fair to say we underestimated the speed and scale of the rollbacks, which are still unfolding every day.  

Some have characterized this period as a sustainability recession. Others have said that this year was a “necessary correction” - meaning overly ambitious sustainability aspirations have been replaced by more business-oriented and realistic commitments.  

But as we settled into the new reality, it became clear that despite the onslaught, most companies are continuing with their sustainability programs. Indeed, many are doubling down on sustainability even as regulations and incentives are pulled away. 

First, it was a trickle, then a deluge of surveys and reports confirming that more companies than ever are taking action on climate and sustainability.  In the famous quote from Mike Tyson “Everyone has a plan until they get punched in the face.”  As we wrap up one of the worst years ever for the sustainability movement, the data is clear - this profession took a huge punch, but kept moving forward. 

This year has been a whirlwind, and in some cases, our newsletter had a trigger warning for all the depressing news. It was hard to summarize everything that happened in 2025, but here are a few of the more epic events:

👉 We are doing a short survey below to get a feel for how the sustainability communities feel, moving into 2026. I would appreciate any responses. 

On January 20th, 2025, the 47th US President, Donald Trump, was inaugurated and signed a raft of executive orders, pulling the US out of the Paris Agreement, and signalling the end of the US focus on climate, what he called the “green new scam.” 

Subsequently, the Administration's flagship tax bill, “The One Big Beautiful Bill Act,” erased much of the Inflation Reduction Act – the most significant US climate bill ever. That, in addition to the removal of long-held environmental and climate policies under the US Environmental Protection Agency, resulted in a full 180-degree turn from the Biden Administration’s climate legacy.

The new Administration acted quickly to abandon the Securities Exchange Commission’s long-awaited climate reporting rule and rescind mandatory climate reporting for federal suppliers. Some of the significant moves from the EPA included:

Trump’s campaign against sustainability did not stay within US borders. The Administration withdrew from several multilateral agreements, including the Sustainable Development Goals and the Loss and Damage Fund. Additionally, trade and tariffs were used as leverage to convince other countries to relax their sustainability programs: 

These policies and Trump’s general opposition to sustainability have led to a year of ‘greenhushing,’ in which companies are less likely to talk about their sustainability progress. One Harvard study found that of the 85% of companies that have maintained or expanded their sustainability programs, only 16% have publicly reaffirmed those commitments. 

There was also a concerted campaign against the sustainability policies of both enterprises and financial institutions. Republican-led states passed laws against “ESG investing’ and pulled state funds from asset managers, prompting many to back away from their climate commitments. Many left groups like ClimateAction 100+, the Net Zero Banking Alliance (NZBA), and Net Zero Asset Managers (NZAM). 

As the ‘shock and awe’ wore off, states stepped up with their own climate policies. And companies that continued to work on sustainability were rewarded with customer loyalty. 

 In recent months, the asset managers that pulled back on climate action have felt the pinch:

This year has been dubbed the “Sustainability Recession.” However, as we shared in our most popular edition of the year, “What Sustainability Recession?” Companies may have been quieter, but they kept moving forward.

Dozens of surveys, reports, and studies show that corporate sustainability budgets will be maintained or expanded. Instead of listing all of these reports, we compiled this list of more than 30 reports from the past year, along with key takeaways for your review. Two of my favorites revealed:

Despite a global trade war and the US retreat, the energy transition continues to gather steam, driven by cheap Chinese clean tech and expiring tax credits. Here are some of the progress and milestones reached this year:

The EU’s ‘Omnibus Simplification Package’ was the most common theme across our newsletter this year, owing to the seismic nature of ‘simplifying’ many of the EU’s main sustainability regulations. As of this week, the Omnibus I has been adopted and finalized after a parliamentary vote on the simplifications we highlighted last week.

 Here is a snapshot of how each major EU rule will finish the year.

 However, Europe continued its leadership by setting a binding 90% emissions reduction 2040 goal and by following through on the world’s first carbon tariff, the Carbon Border Adjustment Mechanism.

 More environmental deregulation is on tap next year as the EU has already announced its next environmental Omnibus simplification effort.

 While the EU backtracked, other climate regulations moved forward:

There was more consolidation and interoperability across sustainability standards in 2025, however, fragmentation persists:

At the 10-year mark since the signing of the Paris Agreement, it seems ironic to concede that the goal of limiting global warming to 1.5°C is no longer attainable. Unfortunately, it appears that way. This month, the EU’s Copernicus program confirmed that 2025 will be the second- or third-hottest year on record, making it the third consecutive year above 1.5°C on average. And the temperature records aren’t likely to stop any time soon. 2025 was another record year for emissions, up 1.1% from 2024.

There were a lot of positives around global decarbonization in 2025, with China’s emissions plateauing and committing to its first emissions reduction goals. In addition to the UN’s Emissions Gap Report finding that the new country goals (Nationally Determined Contributions (NDCs)) now represent a warming of 2.8°C, down from last year's 3.1°C. 

However, these record-breaking temperatures are increasingly accompanied by worsening extreme weather events, wildfires, and heat waves. All contributing to the first half of 2025 being the most expensive 6-month period on record for climate disasters, following the most expensive year on record in 2024.

 The views expressed on this website/weblog are mine alone and do not necessarily reflect the views of my employer. 

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