State of corporate climate action 2025: what businesses need to know

On the heels of Climate Week NYC and the United Nations Global Compact Summit, the pressure on companies to show real, measurable progress on climate action has never been greater. In our recent webinar, State of Corporate Climate Action 2025, we explored the trends shaping the year ahead — from tightening regulations to shifting investor expectations and the emerging role of AI.

Here’s what you need to know about where things stand, what’s changing, and how to prepare.

The shift from voluntary to mandatory reporting

For years, many companies have been able to choose how and when to report their climate impact. That’s changing — and fast.

Globally, disclosure rules are converging and expanding. In the EU, the Corporate Sustainability Reporting Directive (CSRD) now requires companies to provide detailed disclosures on their environmental impact, including Scope 1, 2, and 3 emissions, along with climate-related financial risks. These disclosures must be verified by a third party, setting a new bar for accountability.

Here in the U.S., federal action has stalled. The SEC’s climate disclosure rule, once set to be a game-changer, has been put on pause following legal challenges. That leaves states like California to lead the way.

Two landmark laws — SB 253 and SB 261 — will require companies doing business in California to begin reporting emissions and climate-related financial risks starting in 2026. While legal challenges are ongoing, the California Air Resources Board (CARB) has been clear: businesses should make good-faith efforts to comply.

The bottom line? Whether your company operates in the U.S., Europe, or beyond, the days of voluntary climate reporting are over. Companies need to start aligning now with global frameworks like ISSB and CSRD to be ready for what’s coming.

The challenge of Scope 3 emissions

Scope 3 emissions — those that come from a company’s value chain — are notoriously difficult to measure and manage. Many companies report on them, but data gaps are everywhere.

The challenge isn’t just missing data. It’s inconsistent and unreliable information coming from suppliers and partners across the globe. Without accurate Scope 3 data, it’s nearly impossible to build a clear picture of total emissions or to demonstrate meaningful progress.

But there’s hope. AI and automation are starting to transform how companies collect and process emissions data, while new disclosure rules will soon require greater transparency. Companies that engage their suppliers now will be better positioned to meet these growing expectations.

AI: a solution and a challenge

AI is making waves in sustainability, but not always in the ways you’d expect.

On the one hand, AI can help companies streamline reporting, model climate risks, and analyze massive amounts of data faster than ever before. This can be a game-changer for managing Scope 3 emissions and preparing for complex reporting requirements.

On the other hand, AI comes with its own environmental costs. Data centers are energy-intensive, and the hardware that powers AI has a significant carbon footprint. As AI adoption grows, so does overall energy demand.

Companies will need to balance these realities, leveraging AI to advance their climate goals while keeping a close eye on the technology’s own environmental impact.

Money talks: the role of finance in driving climate action

Investors and insurers are sending a clear message: climate performance matters.

Private equity and venture capital firms are increasingly integrating ESG factors into their investment decisions, making sustainability a key consideration for companies seeking funding. Insurers are also shifting their practices, reducing coverage for fossil fuel projects and raising premiums for companies with high climate risk exposure.

For businesses, the takeaway is clear: sustainability isn’t just about compliance. It’s about maintaining access to capital and protecting your bottom line.

Corporate commitment is holding strong

Even amid political and economic uncertainty, companies are holding firm on their climate strategies.

While approaches may evolve, the commitment to reducing emissions and managing climate-related risks continues to expand across industries. This momentum shows that climate action is not a passing trend — it’s becoming deeply embedded in business strategy.