Forecasting 2026 based on opinions from 300+ sustainability professionals:

If 2025 was the “sustainability recession,” what will 2026 look like? 

To get a clearer picture of what to expect, we asked our subscribers four questions about their forecast for the year ahead. 

If there were one phrase to sum up more than 300 responses, it would be "cautious optimism." As you review these prognostications, please add your thoughts in the comments section.

Looking back to last year’s predictions, we were not too far off the mark. Here are our eight predictions for 2025 with our self-grading - let us know in the comments if you think we got it right.

2025 Predictions Grade

Here are five predictions for 2026 derived from our reader poll

More than half of the respondents reported being cautiously optimistic. However, the emphasis could be on caution. Strong optimism was the least represented outlook, and a fifth were pessimistic. 

There are lots of reasons to be optimistic. The state of California will implement its corporate climate reporting mandate, and around a dozen countries will begin implementing climate reporting regulations aligned with the International Sustainability Standard Board (ISSB). More innovations and faster adoption in clean tech and EVs are likely everywhere except the US, and there may be another shot to save multilateral cooperation (again, without the US).

However, the caution stems from the clarity we gained in 2025 of what to expect from the Trump administration on climate and sustainability: 

Over the holidays, the administration halted five East Coast offshore wind projects totaling $25 billion worth of investment and the capacity to power 2.5 million homes. The US Environmental Protection Agency (EPA) plans to finalize many of the climate rollbacks it announced in 2025, including repealing the “Endangerment Finding,” the bedrock of U.S. climate regulations. Further cuts to critical climate-warning systems, scientific research, and recovery efforts are also likely. And we should also expect the US to continue to pressure other countries to abandon climate and sustainability in favor of fossil fuels.  

There will be more ‘simplification’ of sustainability policy from Europe. A new Omnibus process, similar to the one that diluted many of the EU’s cornerstone sustainability rules last year, will focus on agriculture, waste, batteries, and more. 

So, while those working in sustainability are inherently a positive bunch, the headwinds against the sustainability movement are unchanged. What seems to have changed is the resolve from the sustainability community to adapt and be resilient.  

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This one was a bit of a surprise for me. Most of you selected low executive priority as the biggest barrier to progress. I thought the lack of public/government support would be the biggest headwind, but that may influence how executives prioritize sustainability in 2026. 

After the shock-and-awe in 2025, many of the rules the EPA attempted to repeal, such as the Endangerment Finding, will be challenged in court. Bush-era EPA air Chief Jeff Holmstead said, “I’m going to go out on a limb and say that there’ll be a lot of litigation,” in 2026. 

Most legal experts agree that if the administration does a poor job of justifying these roll-backs, for example, by failing to respond to the more than half a million comments on its endangerment finding proposal, the underlying policies will be upheld by the courts.

In addition, the renewable energy companies at risk of losing billions from cancelling projects near completion have also begun to litigate against Trump.

US states will continue to fill in where the federal government backtracks. California is moving forward with its climate reporting rules, and other states, such as New York, are following suit. Four of the seven states with extended producer responsibility (EPR) rules will begin implementation in 2026. More states are expected to introduce emissions trading systems and climate super funds. 

EU politicians and the business community are also beginning to push back against its deregulatory moves. EU Commission Vice-President, Teresa Ribera, has claimed the EU must resist business and US pressure to weaken rules, adding that “it’s the green and digital agenda that are the main drivers of competitiveness.” Businesses are expressing frustration with the EU’s uncertainty regarding rules such as the Deforestation Regulation (EUDR), which was delayed by an additional year just two weeks before it was scheduled to take effect. 

In 2025 (as in most years), sustainability programs had to prove their worth. A series of reports and surveys last year showed that companies continue to report, set targets, and invest in sustainability, mainly driven by the business case. Most of you expected “return on investment” (ROI) to remain the biggest driver for progress in 2026. 

And there is plenty of value left to be discovered. A report from my company, BCG, and the World Economic Forum (WEF) late last year found that the green economy is the second-largest business opportunity this decade and that green revenues since 2020 grew twice as fast as conventional revenues.    

Even with the regulatory rollback, 2026 will mark an uptick in regulatory pressure as multiple jurisdictions roll out mandatory climate disclosure rules. 

As mentioned above, California will require thousands of U.S. companies to report climate risks and emissions in 2026.  Also, a dozen jurisdictions will begin to require reporting under the climate standard developed by the International Sustainability Standard Board (ISSB). Major economies such as  China, Hong Kong, and Singapore, will begin implementing or expanding their rules, most requiring Scope 3 – or value chain emissions reporting. The mandated Scope 3 element of these rules will inevitably push more companies to report, likely leading to another record year for corporate sustainability reporting. 

There will be another round of sustainability reports filed in Europe in Q1 and Q2. The EU will adopt the simplified version Sustainability Reporting Standards (ESRS) by mid-year, and they will apply to future reports under the Corporate Sustainability Reporting Directive (CSRD), albeit for far fewer companies. 

The EU also went ahead with the world’s first carbon border tariff, the Carbon Border Adjustment Mechanism (CBAM), despite strong lobbying from trade partners. CBAM will have long-term implications for companies importing covered products, such as steel and cement, into the EU. Even as the EU considers exemptions for fertilizers, CBAM is showing signs of working. Exporters of covered goods to the EU are exploring ways to remain competitive with EU-made goods by decarbonizing their processes. One analyst said, “CBAM is quite unpopular among major exporters to the EU, but it has already proven to be quite effective in pushing reticent countries towards building or expanding carbon pricing efforts.”

It seems like everyone is still bullish about the energy transition. However, commentators on this question indicated a clear distinction between the US and the rest of the world. 

In the US, tax credits for most clean tech under the Inflation Reduction Act will expire. Despite the lack of tax credits, many still expect clean tech to continue to dominate new energy capacity (in 2025, renewables made up more than 90% of new capacity). That said, new clean energy capacity would have been nearly 50% larger without Trump's policies. 

In China, all eyes will be on the final adoption of its five-year plan, scheduled for March, which is expected to focus on energy self-reliance through further investments in renewables and nuclear power. Emerging economies, mainly driven by Chinese clean tech, will continue to accelerate adoption. Africa’s largest solar plant is set to come online in Egypt, and the world’s largest solar-plus-battery project is set to come online in the Philippines. In developed countries (such as the EU and the UK) where renewables account for a significant share of the energy mix, the focus is on grid infrastructure to avoid blackouts like those in Spain in 2025. 

In the EV market, despite EU and US rollbacks, two innovations are set to drive wider adoption in 2026. The first vehicles with sodium-ion and solid-state batteries are set to be rolled out, with charging times far faster than currently possible.

In the first days of the Trump Administration, the US withdrew from the Paris Agreement and the UN Sustainable Development Goals soon after. This week, the US withdrew from the 1992 United Nations Framework Convention on Climate Change, the Intergovernmental Panel on Climate Change (IPCC - the world’s leading scientific body on global warming), the Green Climate Fund (GCF), and more than 60 other treaties.

The seismic shift in US foreign policy led some to believe the end of multilateral global agreements is nigh. However, in 2026, we could see a resurgence in cooperation on shared global goals, as countries regroup in the new global reality of US isolationalism. 

The election of a new UN Secretary-General this year will play a significant role in shaping global cooperation. COP31 in Turkey is also expected to be another opportunity to revive climate action. Ahead of the event, last year's host, Brazil, plans to release a roadmap to help countries decarbonize.

The first conference on transitioning away from fossil fuels will be held in 2026, following a commitment made at COP30. The event will be co-hosted by Colombia and the Netherlands in Santa Marta, where the 80 countries that agreed to the deal at COP30 aim to build support. In October, the International Maritime Organization (IMO) will have another chance to implement a global carbon tax on shipping, which was scuppered in by the US 2025.

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

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