2025 Sustainability Trends: sustainability reporting rule changes and more

Last updated on February 11th, 2025 at 01:42 pm

In 2025, businesses will find themselves facing quite a shift when it comes to ESG practices.

With new legislation that will impact businesses across Europe, the UK introducing new sustainability reporting standards and revisions to sustainable finance regulation, the landscape is set to shift with implications for businesses of all sizes. Like with any change, there will be opportunities and challenges, including for communicators.

Here we break down the trends that are set to shape the ESG landscape in 2025, and how they are likely to shape ESG communications.

Greenwashing won’t go away and legal ramifications will increase

Preventing greenwashing will continue to be a key focus for both EU and UK regulators, as they seek to improve the quality and reliability of sustainability information.

A proposal to address greenwashing was put forward at EU level in 2023, and is now being negotiated, with a view to creating the Green Claims Directive. It’s not yet clear when the Directive will come into force, but developments are highly likely this year.

The proposal would require companies to back up their voluntary green claims, allow for the banning of false environmental claims, generic ‘green’ labelling and claims based on carbon offsetting schemes. Crucially, the proposal would address eco-labelling, seeking to create a more standardised approach to help consumers to make more direct comparisons between products.

In the UK, a key development for the investment market in 2025 will be the April compliance deadline for Sustainability Disclosure Requirements. Financial advisors will be obliged to pass on consumer-facing disclosures and new sustainability reporting information to clients. This is likely to see funds’ names changed, for example if the word ‘Impact’ or ‘Sustainable’ has been used to name a fund, it must be substantiated.

Other regulators including the CMA (Competition and Markets Authority) and the ASA (Advertising Standards Authority) are also ramping up efforts to combat greenwashing. The CMA is taking a sector-by-sector approach, with fashion under the spotlight. In April, will gain new powers to fine companies for breaking consumer protection laws.

While there are no specific updates expected from the ASA during 2025, the organisation is continuing to expand its remit and focus on enhancing transparency in advertising and online marketing. In 2023, the ASA started using an AI monitoring tool to identify adverts which may be breaking greenwashing guidelines for review.

For marketers and communications professionals, this marks a shift towards monitoring a high volume of ads online and offline, rather than waiting for consumer complaints, or in the case of the CMA, focusing only on high-profile cases. It will be more important than ever for those involved in creating adverts to understand the rules around substantiating green claims.

CSRD goes global

The Corporate Sustainability Reporting Directive (CSRD) aims to increase transparency by empowering companies to report on their sustainable impact and performance. In 2025 the CSRD will be continuing to expand its reach, gradually applying to more non-EU companies who have a significant presence in the European Union.

The CSRD requires detailed reporting on supply chain practices, meaning companies who are not required to report are still implicated, as a result of being part of global supply chains.

With sustainability reporting going global, companies the world over will now face pressure from investors and markets to align with these standards.

New UK sustainability rules

This year, the UK Sustainability Reporting Standards (SRS) are set to evolve further, with a big focus on interoperability with international frameworks.

The UK government looks set to consult on the drafts of the new UK SRS in Q1 of 2025 and these standards will form part of a wider Sustainability Disclosure Reporting framework led by HM Treasury.

If the SRS is endorsed, this will be a big step forward in regulating investments.

This new set of standards will require the disclosure of transition plans, the creation of a UK green taxonomy and require UK-listed companies to report their ESG-related disclosures to investors and regulators.

The guidance says that it will consider “costs to reporting companies and benefits to investors who may want to use this information”. Close attention will be paid to the rules for companies of different sizes and structures, with this consultation taking place in the first half of the year.

Wider trends and implications for communicators

Clearly legal requirements relating to sustainability reporting and compliance are increasing. The need for legal teams to work closely with communications, marketing and PR has never been greater, to ensure opportunities are maximised and risks avoided.

Taking the broader view, we can also expect 2030’s net zero targets to be a big focus for this year. It is clear that we are a long way off meeting these targets, both nationally and internationally. Businesses will need to balance growing environmental risks and a complex macroeconomic context.

We can expect nature and social responsibility to continue to dominate conversations too, as the connections between these issues, and the role of businesses in addressing them, are increasingly understood.

2024 saw a COP29 process fraught with challenges and frustrations. As businesses and the climate community prepare for COP30 in Brazil in November, we expect a big focus on ensuring there is public and community trust in the UN’s processes. The first year of Donald Trump’s presidency will also be well underway, with inevitable implications for climate and sustainability.

In summary

2025 looks set to be a significant year for corporate ESG initiatives, regulatory requirements, sustainable supply chains and the publication of sustainability related information.

With this comes the profound importance of communication. At times of change, communication, internally and externally, becomes exceptionally important.

And as sustainability and legal teams focus on ESG reporting and compliance, it is essential that communicators continue to prioritise sustainability and meet the changing needs of their consumers, investors, employees and wider stakeholders.

If you want to learn about transforming your ESG measures into effective ESG communications, then we’d love to hear from you. Our experience and expertise in ESG Communications can add value to your organisation, if you’d like to find out how, then contact us.