Actionable Insights: Top ESG Themes in 2025

Overview

A review of global issues likely to influence ESG investing in 2025 reveals two related trends. First, despite some expected headwinds in the United States, global supervisory authorities are moving from articulating ESG principles to making such principles mandatory through regulation. Second, protecting the environment and mitigating climate change is set to remain at the top of the agenda for many stakeholders, due to various rising physical, transition, and systemic risks. Both trends suggest further pressure on companies and investors to continue to improve their environmental and social performance.

The expansion of mandatory ESG standards is apparent in national and regional regulation, such as the European Corporate Sustainability Due Diligence Directive and the EU Forced Labor regulation, that is meant to uphold corporate due diligence duties related to human rights impacts. Regulators are also taking action against companies engaged in “greenwashing,” that is, making misleading sustainability-related claims.

Another expanding area for regulation is curbing the environmental and health impacts of plastics. UN Member States are in the process of negotiating an international legally binding treaty to address plastic pollution. The Treaty could enhance corporate accountability for safe and environmentally sound plastics management and increase regulatory, reputational, financial, and litigation risks for companies tied to plastic pollution.

The impact of Artificial Intelligence (AI) technologies illustrates how ESG goals are evolving. Such technologies consume considerable energy: generative AI and cryptocurrencies could drive data centre consumption of electricity to more than 1,000 TWh by 2026. As curbing greenhouse gas emissions remains a challenge for the Magnificent 7 technology companies, despite their efforts to align with Net Zero, mitigation measures may become more ambitious in the future.

Given current environmental concerns, a new approach to ESG issues that may be useful is to draw on the Planetary Boundaries Framework (PBF). The PBF provides an expansive view of the interactions among Earth’s climate, land, and water systems. While this framework cannot be directly applied to specific companies, indicators such as a company’s approach to freshwater use can serve as proxies for assessing that company.

As both regulation and concerns about companies’ environmental impact expands, data on corporate ESG performance and related ESG indicators may assist investors in discerning current risks and opportunities. As Actionable Insights: Top ESG Themes in 2025 details, ISS ESG solutions can support investors in this process.

Explore ISS ESG solutions mentioned in this report

• Identify ESG risks and seize investment opportunities with the ISS ESG Corporate RatingESG Corporate Rating.
• Assess companies’ adherence to international norms on human rights, labor standards, environmental protection and anti-corruption using ISS ESG Norm-Based ResearchISS ESG Norm-Based Research.
• Identify, evaluate and act on modern slavery risks and their impact on investments with the Modern Slavery ScorecardModern Slavery Scorecard.