Trends Shaping 2025: The Shift Toward a Sustainable Future

Unlocking Opportunities in Green Technologies, Investment Strategies, and Circular Economy Practices

Jan 01, 2025

We are just five years from achieving our 2030 goals, and significant trends are rapidly setting the stage for our transition to a cleaner, greener economy.

Public and private corporations realise that technological advancements alone do not define our growth or progress; combining them with sustainability will lead us to an agile, responsible future.

Reporting and Regulation

Businesses are responding to consumer and investor pressure. The work is ongoing, whether rebranding to combat greenwashing issues or rebranding to green brands themselves to get favourable responses from stakeholders.

Many companies consider sustainability pivotal for risk management and market competitiveness. The risks of climate change go beyond financial implications. We have not just natural disasters to worry about but also food and water shortages, loss of livelihoods, forced mass migration due to low natural resource availability, destroyed infrastructure in climate-affected areas, and, mainly, geopolitical risks that make operating businesses in vulnerable countries difficult.

The Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD), Taskforce on Nature-related Financial Disclosures (TNFD), Global Biodiversity Framework, as well as International Financial Reporting Standards (IFRS) – the S1 standard for material sustainability risks and S2 standard for climate-related risks will be pivotal. Governments will soon mandate a science-based transition and detailed accountability and reporting for corporations. Companies may shift from net-zero carbon targets to nature-positive ones, that is, science-based targets for nature (SBTN), and these Sustainability targets, disclosures and reporting could extend beyond 2030. The goals can go beyond cutting emissions to reducing freshwater or plastic usage and becoming zero waste.

Green Finance and Sustainable Finance

Bloomberg reports that sustainability assets will reach USD 50 trillion by 2025—more than one-third of the anticipated USD 140.5 trillion in total global assets under management.

ESG-linked financial instruments and green bonds will become more significant, and ESG investing will surge. Due to regulatory pressures, ESG metrics, especially environmental metrics related to carbon management metrics, are being tied to incentive plans and KPIs for C-suite executives. Due to imminent climate risks, investors will prioritise resilience and adaptation in their portfolios and low-carbon transition.

We will also see the rise of popular debt instruments, especially Green, Sustainable, Social and Sustainability-linked bonds (GSS+), to finance energy transitions, which could exceed USD 1 trillion. Sustainability-linked loans and bonds (SLLs and SLBs, respectively) linking debt issuance to particular sustainability performance goals will rise. Extracting materials like lithium, vital for green technologies, or manufacturing insulation materials to help reduce construction-related emissions are green-enabling projects that would attract such bonds.

Family offices are aligning investments along family values to harness goodwill and legacies beyond monetary gains, so impact investments targeting biodiversity, climate solutions, and inequality reflect this focus. Also, to have robust impact measurement frameworks like the Global Impact Investing Network (GIIN), five impact dimensions (What, Who, How much, Contribution, and Risk) help.

Green Talent, Workforce and Social Sustainability

The Silver Tsunami—the retirement of Baby Boomers by 2030 may cause various challenges, including brain drain from a retiring workforce and workforce shortages.

Various countries see a growing demand for green talent across sectors. In Europe, the new and improved regulations and the renewable energy transition drive competition for green talent. The United States and the European Union are seeing a demand for green skills, especially in carbon accounting, emissions trading and carbon credits, while the demand is also increasing in Costa Rica, Saudi Arabia, and Singapore.

Social value initiatives like data-driven Diversity, Equity, and Inclusion (DEI) to scrutinise biases using analytics and AI may take centre stage. We could see a regulatory focus on Inclusive leadership, intersectionality, neurodiversity initiatives, pay gaps, fair wages, safe working conditions, ethical labour practices, diversity metrics, workforce representation and wellness, etc.

Water Stewardship

New desalination technologies, such as algae-based impurity removal techniques, are helping to turn saltwater into freshwater. Greywater recycling, irrigation, and smart water grids optimise water usage.

Air-to-water generators (AWG) use sophisticated filtration techniques, such as reverse osmosis, UV, and charcoal, to transform ambient humidity into safe, clean drinking water.

Since water is a key resource needed to power data centres that provide AI processing power, we will see innovations booming in the water management and water equity sector. Due to critical water shortages, private and public entities will prioritise water ecosystem preservation in the coming years.

Climate Resilience

Community-centric sustainability initiatives will be prominent, especially those fostering climate resilience, such as community-led green infrastructure projects like community solar or flood water management systems.

Circular Economy and Circular Bio-economy

With more focus given to extended producer responsibility (EPR), the focus would be on product life extension, resource efficiency, product reuse, repair, refurbishing, upgrade, and recycling, reducing the lifecycle impact of products, sustainable packaging (mushroom-based and algae-derived plastics as well as plant-based and mono-material packaging), and reverse logistics embracing circular supply-chain logistics.

According to McKinsey research, a 10% reduction in packaging across global supply chains may reduce CO₂ emissions by roughly 50 million tonnes yearly.

E-waste will receive a special focus. The United Nations Global E-waste Monitor 2024 reports that in 2030, we will produce about 82 million tonnes of e-waste.

In the circular bioeconomy space, waste-to-resource technologies, especially waste-to-fuel ones like anaerobic digestion and gasification, are gaining importance. Bioplastics and compostable plastics are increasingly used in packaging. Strain as a Service (StaaS) solutions are rising to drive the sustainable biofuel industry by substituting conventional ones for transportation. Insect-protein farming is also going mainstream to turn low-grade food waste into valuable proteins and fats.

Nature & Regenerative Practises

Nature as an asset class will gain more prominence. Biodiversity-positive initiatives and strategies focused on regenerating ecosystems, especially Nature-based solutions (NbS) focusing on ecosystem restoration, habitat protection, regenerative and climate-smart agriculture, rewilding and reforestation initiatives, and conservation projects to address climate change, biodiversity loss, and land degradation, will become prominent along with carbon-capture technologies.

Precision biologics solutions like engineering crop microbiomes enhance crop resilience, nutrient uptake, and soil carbon sequestration, lessening the need for chemical fertilisers.

Companies slowly realise that biodiversity and climate change are interlinked with business resilience. Organisations will focus on reducing emissions, offset unavoidable emissions in high-integrity nature markets and make their supply chains more sustainable, aligning financial performance with ecological impact.

World governments would prioritise restoring degraded landscapes, halting desertification and biodiversity loss, and addressing forced migration.

Decarbonisation & Energy

The crux of decarbonisation depends on energy management so we will see a surge in strategic renewable energy purchases, energy efficiency and storage (especially long-duration energy storage (LDES) and Hybrid Energy Storage Systems (HESS) for microgrids), fuel switching, low-emission tech, distributed energy generation and transmission technologies, and data-driven user incentives to accelerate renewable energy adoption. Solid-state batteries, Perovskite solar cells, green hydrogen, and offshore wind platforms will address storage, efficiency, grid resilience, manufacturing issues, and durability against environmental hazards. Utility-scale energy storage systems (pumped hydro, lithium-ion, and vanadium flow batteries) will be explored to provide on-demand electricity.

By enabling electric cars (EVs) to feed electricity back into the grid, vehicle-to-everything (V2X) solutions are improving resilience and fortifying energy networks.

As the transition to clean energy accelerates, fossil fuel assets may be retrofitted to support low-carbon technology, especially renewable fuels, Direct Air Capture (DAC), and Carbon Capture, Utilisation, and Storage (CCUS). By 2030, the annual cleantech project investments would exceed $900 billion.

Industry 5. 0 focuses on Sustainability and Climate

The primary use of AI, robotics, and automated systems is to digitise the grid for energy security and grid reliability. The focus will be smart energy distribution and efficiency to ensure optimised energy use during high demand and scale back during off-peak periods.

The sophisticated use of big data analytics to predict supply-chain risks and make autonomous decisions in real-time will increase. Industrial AI will optimise manufacturing and operations using smart warehousing, route planning, predictive maintenance, fleet efficiency, fuel usage, vendor selection, last-mile delivery, or carbon insetting. For instance, AI-powered solar tracking systems are improving energy management.

AI will also model climate scenarios and execute carbon tracking as carbon intelligence platforms rise. Digital transparency and traceability will be pivotal — especially while offering product traceability and clean labels to combat greenwashing. Right now, investments are skewed and flowing more towards electric vehicles. Through proper monitoring, AI can help redirect capital towards logistics, manufacturing, etc. AI-driven recycling robots are now being used for sorting and segregation.

With the rise of blockchain and quantum computing, sustainable technology, Green IT and IT Sustainability, and web sustainability will be inevitable. Google, Microsoft, Meta, and Amazon will invest in nuclear energy (if not already) as a clean energy source to reduce the climate impact of AI on electric grids. Also, issues like privacy, data breaches, and copyright infringements may put more focus on tech's social sustainability.

Initiatives abound, like using DNA fragments discovered in soil or water to track species and ecosystem health in a non-invasive manner for more precise conservation.

Credits

This article is written by Deepa Sai, the Director of ecoHQ

ecoHQ