Webinar Recap: 2025: A Changing ESG Landscape
The point of this webinar was to share insights into how ESG has changed following the 2024 election and early signs of the Trump administration. Using both direct insights and crowdsourced opinions from professionals, the webinar covered key trends, how we got to where we are and what the future will look like.
Over the past five years, Environmental, Social, and Governance (ESG) has gone from a buzzword to a battleground. While once driven by voluntary corporate commitments and innovation, ESG in 2025 is increasingly shaped by regulations, compliance pressures, and shifting corporate priorities.
The Evolution of ESG (2020-2024)
Looking back, the early 2020s were marked by enthusiasm for sustainability initiatives. Companies embraced ESG as a way to engage employees, respond to consumer demand, and prepare for anticipated regulations. Several key trends shaped the ESG movement:
Corporate Push for Net-Zero: Many organizations announced ambitious net-zero commitments, particularly in the EU.
Social Justice and ESG: The death of George Floyd and increased attention to diversity, equity, and inclusion (DEI) led to ESG strategies that prioritized social responsibility.
Rise of Carbon Accounting: Measuring and reducing carbon footprints became central to ESG strategies.
Stakeholder Capitalism Gains Momentum: Employees, customers, and investors increasingly expected companies to go beyond shareholder profits.
Early Signs of ESG Backlash: Skepticism around ESG began to emerge, particularly in the U.S., as companies faced political and financial scrutiny.
By 2023, the ESG conversation was changing. Extreme weather events highlighted climate risks, but companies were also contending with economic uncertainty and regulatory shifts.
Why Did Companies Embrace ESG (2020-2024)?
According to industry professionals, the primary motivations for ESG initiatives during this period included:
“Doing the right thing”
Climate change concerns
Consumer demand
Regulations
Investor expectations
Cost savings
Board pressure
Fast-forward to 2025, and the reasons behind ESG adoption look noticeably different. Key forces shaping sustainability have whittled down to three main rationales.
Regulations
Cost savings
These motivations and the history of ESG since 2020 foreshadow how ESG looks in 2025 and beyond.
Related: Why B2B Companies are Setting Science-Based Emissions Targets in 2024
Key Trends in 2025
So, what’s really happening on the ground? Industry professionals—sustainability consultants, ESG advisors, and corporate leaders—are sharing their perspectives.
These professionals agree that ESG remains relevant but is evolving rapidly. Here are the top trends shaping ESG at the start of 2025:
Private Markets Taking the Lead: With public companies scaling back voluntary ESG efforts, private markets-including investors and limited partners-are stepping in to push sustainability forward.
Regulatory Compliance Over Voluntary Action: ESG is shifting from a proactive strategy to a compliance-driven necessity, particularly with the EU’s Corporate Sustainability Reporting Directive (CSRD) and emerging U.S. state-level regulations.
Public Companies Pulling Back: Many large corporations are reducing their focus on sustainability, prioritizing compliance over innovation. Greenhushing-the practice of downplaying or hiding sustainability efforts- is on the rise.
DEI Under Pressure: Diversity, Equity, and Inclusion (DEI) programs are facing backlash, with some companies scaling down their commitments. Regulatory changes in the US are leaving many companies with questions on their DEI programs.
A Shift Toward ESG as a Cost-Saving Measure: Companies are finding value in framing sustainability initiatives regarding financial benefits, such as resource efficiency and supply chain resilience.
Related: Strategies for Addressing Sustainability in RFP Responses
Survey Data: How ESG is Changing
A survey of industry professionals provided additional insights into these trends:
81% agree that EU regulations are driving U.S. companies to act on sustainability.
69% believe companies are still making progress on ESG but are communicating less.
50% say public companies are reducing their focus on ESG.
38% agree that ESG efforts among corporate peers are declining.
56% believe ESG is becoming more about compliance than innovation.
To the question, “Where do you think ESG is headed?”, one anonymous respondent put it bluntly:
“A pause in urgency for four years. There will be no push from the Trump administration, so why spend money and effort? There will be grassroots, employee-led engagement but little meaningful progress.”
Other professionals echoed similar concerns. One ESG consultant admitted:
“I don’t know, and I’m scared of what the answer will be.”
Uncertainty seems to be the constant for industry experts and many expect to continue being unsure about what the future holds.
Industry Voices: What ESG Experts Are Seeing in 2025
Beyond survey data, professionals working in ESG have shared their first-hand experiences. Their insights provide a reality check on where ESG is headed, based on the earlier identified trends.
Public Companies Scaling Back
A Senior Sustainability Consultant noted:
“Compliance to reporting standards and EPR, and the understanding and appreciation of third-party auditing [are increasing]. A step up in rigor-it’s a maturing the sector has needed. Away from vague claims to more concrete data.”
Meanwhile, a Head of Sustainability at a Fortune 500 company pointed out:
“The biggest shift is the nervousness around communication. Greenhushing is everywhere!”
Private Markets Taking Charge
Private investors and venture capitalists are stepping into the ESG leadership void left by public companies. While regulations tend to focus on public companies, the trickle down effects of these regulations are hitting private companies, too. Many companies are seeing increased supplier requests for ESG data.
A financial sector ESG Advisor explained:
“European regulatory requirements like the CSRD are driving the most action, as well as expectations of suppliers from larger companies with climate commitments.”
Private markets are also seeing ESG increase in all parts of the deal making process, including diligence and exit.
ESG as a Cost-Reduction Strategy
Rather than focusing on social impact, many companies are shifting their ESG efforts toward financial gains. Sustainability professionals are framing benefits in a way all stakeholders can understand: financial benefits and cost savings.
An energy sector banker highlighted:
“Sustainability to reduce costs seems to be trending, i.e., recycling water, materials, etc., as part of onshoring sentiment and local supply chain efforts too.”
Where Is ESG Headed?
Despite concerns, ESG isn’t disappearing-it’s transforming. Industry experts predict that:
ESG will become more compliance-driven, particularly with EU and U.S. state regulations.
Companies will focus more on financial benefits, risk management, and cost savings.
ESG teams will shrink, requiring businesses to do more with fewer resources.
Climate initiatives may become distinct from ESG, with dedicated strategies emerging.
One ESG consultant summed it up:
“More formal integration into business practices and reporting, with a streamlined approach-less topics, focus on the ones that matter and are associated with risks & opportunities.”
Related: 5 Proven Strategies to Reduce Scope 3 Emissions in Your Business
If This Is the Reality, What Can We Do?
For professionals navigating this shifting landscape, there are still ways to keep ESG momentum alive:
Keep moving forward. Even in a more compliance-driven era, ESG remains a critical tool for business resilience and long-term success. Experts should use tools like financial materiality and a strong business case to help internal skeptics understand the value of continuing sustainability programs.
Use industry strengths: collaboration, learning, and optimism. By sharing knowledge and best practices, professionals can continue driving meaningful progress. These strengths have been true in the market as long as ESG has existed. Experts can and should find motivation in these strengths.
Report on the value-add of ESG. Companies that talk about ESG as “the right thing to do” as the rationale for completing the work are not finding success getting buy-in from stakeholders. Companies need to demonstrate the tangible benefits of sustainability, not just for compliance but for business performance.
Despite the uncertainty, ESG professionals agree that the work isn’t over. As regulations evolve, companies that integrate ESG strategically rather than reactively will be the ones that succeed.
Final Thoughts
ESG in 2025 is not what it was five years ago, or even five months ago. While the landscape has shifted from innovation to compliance, from public commitments to quiet action, it remains a defining factor for businesses worldwide. The challenge for ESG professionals is clear: adapt, stay informed, and continue to drive impact, even in an increasingly complex and cautious corporate environment.
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