Chaos, climate and corporate risk: What 2025 taught us about sustainability’s future

Welcome to Sustainable Views. To begin, I wanted to thank you, our listeners, for tuning into Sustainable Views this year, both reading our copy and tuning into this podcast. Today, it's really exciting to have the whole team together in the studio in London, and we also have Aniket over in India, and we'll be taking a look at what happened in 2025 and a look forward to 2026. Hello, team. Hello. So what a year it's been. Lizzie, I'd like to start with you. I think probably as the US editor, you've seen the worst parts of of the year perhaps, and the biggest pushback against ESG rules. Can you share with us some of the high or perhaps the lowlights of the year?

Yeah, how long have you got?

We've got a bit of time.

So it's been really striking, the scale and pace, obviously, as everyone has seen, of the Trump administration's cuts to clean energy, climate, environmental protections. We've obviously seen a lot of the Inflation Reduction Act gutted. That That surprised lots of people. Some of it does remain in place. We've seen a really clear agenda against wind power in particular, solar not so hard hit, but still projections have been revised down kind of across the board. And we've seen a lot of environmental protections rolled back as well and a reshaping of the federal disaster response, which is not great as extreme weather events are obviously becoming more frequent. On clean energy, it's obviously bad. And as I say, analysts have kind of revised their projections down across the board. But I have spoken to various people who are kind of working on the ground, and lots of people do say the Trump administration is making things harder, but at a kind of state, local level, if you're working on a project that doesn't need federal approval, then a lot of that is still happening because energy demand is obviously still surging. Obviously, that demand is largely being driven by the rapid rollout of data centres, and because they need energy quickly, that means renewables still remain the best option. So, While the Trump administration has been all about kind of drill, baby, drill, we haven't seen a huge surge in oil and gas production in the US. We also haven't seen an explosion of new coal mines, which is positive. We've also seen a huge amount of action in the courts. Obviously, lots of people suing the Trump administration, but we've also seen action against some climate policies. So the Securities and Exchange Commission's climate disclosure rule that is now gone after the SEC declined to defend it in court. And California's own climate disclosure rule has also been put on pause after litigation from the private sector that had been due to come in on January 1st. So a lot of uncertainty remaining for businesses working in the US. Indeed.

And this issue of uncertainty has not just been in the US as well. I mean, in Brussels where I'm based, we've Seen massive rollbacks as well in terms of the parts of regulation that were put in place under the EU Green Deal, most notably around the corporate sustainability and due diligence regulations. But also we're seeing a pushback against the carbon border tax, the methane regulation. So as you say, this difficult environment for businesses and as we hear from Trump and from EU leaders, there's a lot of claims that this is being done in the name of business. But obviously, as you say, when we speak to businesses, that's not at all the story we get. And it just seems to be these bigger companies like ExxonMobil and others that are kind of really pushing this, and smaller companies are having to kind of catch up quickly and see what's happening. In terms of the Trump administration, I mean, obviously you've said what's happening in the US, but in Brussels as well, we've also seen this influence of the US administration and US companies, as we've just mentioned. Could you talk a little bit more about that and what you've seen from your side in terms of the US influence on the EU?

Yeah, so this has been a pretty big story for us throughout this year, starting kind of right in January. We saw this kind of coordinated campaign against EU rules, particularly the CSDDD, as you mentioned. That was kind of—

Just, sorry, just to say, the CSDDD is the Corporate Sustainability Due Diligence Directive.

Thank you. Yes, so that was being driven largely by the private sector, but it became clear once the EU-US trade deal was signed in August that it was also getting a big boost from the Trump administration because that deal included concessions on sustainability regulations. We have also seen at the International Maritime Organization's meeting in, I believe, in September in London, the Trump administration working very hard to make sure that progress on that net zero rule did not happen. We've heard lots of stories about trade negotiators calling around lots of different countries' teams, even saying, you know, if you want to visit the US in future, you know, quite personal strategies there.

We obviously saw Trump as well putting out his own tweet urging countries not to vote in favour of the net-zero pathway at the IMO.

Yeah, it's been a coordinated effort. And earlier this month, we saw the publication of the National Security Strategy from the US. That made quite clear that the administration's goal is essentially to destroy Europe. And so that kind of puts everything in a much clearer context of exactly what they're trying to achieve. Because what we have heard, and we've talked about a fair bit on here, is that people have been quite surprised. You know, everyone expected a rollback of US environmental rules, but people have been quite taken aback by the effort to take that fight to the world stage.

Yeah, and that's very, very apparent in Brussels, as you say, in terms of I saw a cartoon this morning and there was Putin and Trump and basically them carving up Europe, which doesn't bode well for the future. So Flo, from the UK, things are obviously not great in Brussels and the US. What have you been seeing in the UK over the past 12 months? Do you have any more positive news to report on?

Yeah, I think it is slightly more positive when we look compared to the kind of wider global context. The UK has been more consistent in committing to its sustainability policy. When you dig a little bit deeper, it is a bit more of a complicated picture. But on energy specifically, the government has remained steadfastly committed to its Clean Power 2030 mission, which is this goal to have an almost entirely clean power system by 2030. And throughout the year, the government's kind of come forward with the various levers that it's planning on using to make this target happen. So it's reformed the grid connection queue, it's established Great British Energy, which is being called a public energy company, it's essentially an investment vehicle to establish new energy projects. And they've also published their specific Clean Power 2030 plans, which outline what the energy mix will look like by 2030. Nuclear energy is very much a part of these plans, including small modular reactors. And this year we saw the beginning of building on the first one, which is in Wales, and it's being built by Rolls-Royce with support from the UK government. And, you know, Lizzie's just been talking about the US and its wider influence. I think nuclear has been one of the ways in which the UK has tried to build a relationship with the US. We've kind of seen a little bit of cozying up to the US perhaps, and nuclear has been one of those points where they've tried to build a common language. However, despite the progress on energy, other parts of the sustainability picture have been a bit more murky. Energy, we've had Ed Miliband, our energy minister, who's really taken ownership of that project, and it's been a very clear message from government However, clear leadership on nature and transport has been lacking when you think about sustainability.

Yeah, so that's one thing that I wanted to ask you was the nature, because as you say, I think the energy side of it, I mean, when I speak to people, I was at a conference on electrification last week and there was definitely a lot of praise for the UK and that much of what the UK has done can be seen as a model for elsewhere. But nature seems to be a little bit more complicated. We've heard Chancellor Rachel Reeves sort of suggest that nature is a cost rather than something that's needs to be protected or even restored. And also we've got this biodiversity net gain policy, which the UK, when it came out with it, was sort of very proud of. It was a landmark piece of legislation. And yet I think this week we're talking towards the end of December, the UK's likely to come out with a rollback on this. Could you explain a bit more this dynamic between nature and energy and growth that the government seems to be struggling with?

Yeah, absolutely. So yeah, as you say, this Labour government has pledged to, in the words of Steve Reid, build, baby, build, kind of copying that Trumpian language. And it's saying no to NIMBYs is also one of their favorite phrases. So it's this idea that nature is a barrier to growth somehow. It's a barrier to building. This idea that nature assessments or environment assessments are a big blocker. And that's the reason why the UK isn't building enough housing or infrastructure. Obviously this premise has been challenged by many, many groups. And as you say, nature underpins the economy and this kind of relationship has been contested by many groups. But the government is committed to this idea that nature's the problem. So we've seen the Planning and Infrastructure Bill, it's currently going through its final stages before it will achieve Royal Assent. And many nature groups have criticized it. They say that it will mean fewer protections for nature. The government says that the opposite is true. It includes a nature restoration fund within the bill, which we're still awaiting the finer details on, but essentially it would allow developers to pay into the fund to compensate for their nature damage on site, and nature would be developed or restored elsewhere. But, you know, speaking to nature experts, they tell me that this idea is a bit problematic because the carbon sequestration potential and ecosystem services of an older habitat, like an old forest, cannot be matched by simply planting some new trees.

It also seems to be quite complicated for businesses to implement as well. I think Aldersgate Group recently put out a report suggesting that.

Yeah, absolutely. The Aldersgate report was essentially saying that the government hasn't really come forward with how this fund is going to work, who's going to be required to pay, where the payments are going to go to. So I think all that clarity is missing and something that we'll be looking for in 2026. And then you also mentioned biodiversity net gain, and we've got this big news this week on whether that will be rolled back. So this rollback was a consultation that was launched in May, which would see restrictions eased for small sites and a simplification, in the government's words, of rules for medium sites. Many groups have criticized this, not only for the loss of kind of what was, as you say, once a world-leading policy, but also Nature consultancies like Arbtect, which I've been speaking to, have warned that scaling back the policy could actually lead to a collapse in the biodiversity credit market because there wouldn't be sufficient demand to sustain habitat banks. So yeah, that's definitely one to watch. We'll see this week what happens with that, and I'll be covering that for Sustainable Views.

Yeah, no, great. And I mean, I think this idea that a lot of what the governments are talking about, similarly to the US and the EU, is this idea of growth competitiveness, but actually we're leaving businesses with a lot of uncertainty and Both businesses and investors have made it very clear if the transition is to happen, they need to know what they're doing and where the money is going to come from. And so, yeah, definitely plenty to watch there. And with this sort of lack of clarity, Erin, we're seeing increasingly lawsuits, cases of litigation arising around ESG. This year we saw the International Court of Justice ruling on climate change, which many lawyers and climate campaigners heralded as really, really important in terms of climate action and ensuring that things change. Could you talk us through a little bit about that and perhaps what's happening in the wider ESG landscape in terms of litigation?

Yeah, so as you say, the International Court of Justice issued its advisory opinion in July on the obligations of states on climate change. The court ruled that states must take stringent action to protect the climate system as a shared resource to limit global warming to 1.5. And even though, as we know, most experts now agree that 1.5 is kind of widely out of reach, having that target spelled out, people say that strengthens the legal argument that states have an obligation to return to 1.5 after it's already been overshot. As you say, the opinion was welcomed as a landmark moment for climate action, and many believe that it lays important groundwork for holding governments accountable for failing to meet the goals set out in the Paris Agreement. The ruling does focus on states and governments, but it also does make it clear that states must regulate businesses for the climate harms that their emissions cause, no matter where those harms occur. So it is important to note that as an advisory opinion, the ICJ's ruling is not legally binding, so it can't trigger a lawsuit in and of itself. It does help build legal precedent, and we've already seen it being referenced in a number of recent climate cases. For example, it was cited in a recent lawsuit brought by more than 100 Filipinos against Shell over the damage caused by Super Typhoon Odette in 2021. And linking back to what Lizzie was saying about the US, the rollback of federal climate rules, it's important to note that it actually removes a key line of defense for a lot of US companies, which is essentially the claim that climate issues are already handled fully at the federal level. So with fewer federal laws in place and fewer federal rules and action, companies arguably have less protection. So that potentially raises their legal risks and makes it easier for states and cities to bring their own climate cases and harder for companies to get those cases dismissed. And of course, this is all happening amid a huge rise in climate litigation. A recent UN report published in October found that 2019 was the first year where more than 50 climate cases were filed. And by June of this year, more than 3,000 climate cases have been filed.

Well, that's a big increase as we have an increasing lack of clarity.

Yeah, and a lot of this is happening over in the US, and almost 2,000 of those cases were filed in the US alone. So yeah, even as the Trump administration is working to roll back a number of these core climate rules, US companies can't afford to be ignoring the obligations.

Yeah, no, I think that's really true. And we've seen this under the changes to the EU Corporate Sustainability Due Diligence Directive, the CSDDD. The need for companies to say how they will implement climate transition plans has been removed. And exactly the same thing, lots of lawyers are warning that actually this removes almost a level playing field, a safety belt for companies, and therefore you end up with more litigation as either EU member states puts things in place. So you end up with 27 bits of legislation, so everything just gets more complicated. So Aniket, over in India, you've been writing a lot about data centres this year, and as Lizzie also already mentioned, they're a massive user of energy and this is only expected to increase. Could you tell us a little bit what you've been seeing during your coverage of AI and data centres and and how the impacts this is having on the energy transition.

Yeah, definitely. This year we have seen massive investment globally in data centers, which is expected to reach about $580 billion. And that's actually more than the total investment in global oil supply this year, which was about $540 billion. And we're expecting strong growth in the coming years as well. Despite all this expansion, the International Energy Agency projects that data centers will account for less than 10% of global electricity demand growth between 2024 and 2030. But this demand is geographically very concentrated. We are talking about 3 major hubs here: US, EU, and China. There is also a lot of, a lot of concerns around amount of energy used by data centers. Tech companies are looking at different possible energy sources here where we have seen new data centers powered by fossil fuels, fossil fuels mainly, many of them using natural gas. We have seen companies signing contracts with existing nuclear plants and investing in advanced reactor developers. There is growing investment in smaller modular reactors up to the size of 300 megawatts and micro reactors up to somewhere sizes between 1 to 30 megawatts. These are particularly becoming popular because of their scalability and small physical footprint. They can be built in factories and deployed at a much faster pace than the conventional large reactors. There is also a significant investment in renewables. Companies are signing power purchasing contracts with solar and wind farms, and they're exploring new assets like geothermal plants and hydropower upgrades to meet clean energy targets. And interestingly, Some people suggest that the growth of AI could actually help speed up the energy transition by pushing more financing into clean energy.

Thanks, Aniket. So positive and negative news there. I'm still to be convinced that AI is going to speed up the energy transition, but no doubt somebody cleverer than I am can explain exactly how that will happen. Flo, last time we were talking on the podcast together, we were talking about COP30. One of the things I found particularly interesting was the inclusion of trade in the final agreement for the first time. Time and this idea that, well, they're kind of forcing to say that any climate measures that are put in place shouldn't impinge upon trade. And obviously we've got the EU carbon tax supposedly coming into place on the 1st of January. And so very much a warning from the rest of the world almost. Yeah. What were you looking at? What did you sort of struck you at COP and yeah, what will you be looking out for in terms of how those measures are now taken forward?

Yeah, I mean, it was definitely an eventful COP and much much came out of it, but also many people were left disappointed. I think for me, one of the main things I'll be keeping an eye on is these roadmaps that we were promised to phase out both deforestation and fossil fuels. They were supposed to be a part of the final deal signed by delegates, but countries failed to reach an agreement on their adoption. The Brazilian presidency said that they were going to go ahead and work on them anyway. So I'll be keeping an eye on what they look like, what impacts they have on the wider economy, and whether anyone even follows them if they're not a part of the kind of final COP agreement. Otherwise, I'll also be keeping an eye on the Tropical Forest Forever facility, which was this financial mechanism which I've spoken on the podcast about before, launched at COP30 to compensate tropical forest countries for leaving their forests standing. When we last spoke, the fund had raised around $6.7 billion from governments and is seeking to raise $25 billion from philanthropic and public capital. That still sits at about the same rate today. So there's not been much change there. So we'll have to see whether the fund successfully manages to get that $25 billion, which in turn is hoped to crowd in $100 billion of private capital. So it really kind of hinges on that initial investment. And if the fund goes well, I imagine there'll be people looking to kind of emulate this kind of mechanism with other kinds of climate and nature finance. It all kind of hinges on the success of the TFFF. So I'll be keeping an eye there.

Yeah, definitely something to keep an eye on from the European government's point of view as well, given that the EU has just decided to delay its deforestation regulation for yet another year. So that's 2 years it's been delayed for and watered down various bits of it. And obviously many of those governments would be governments that normally would give a substantial amount of money to such funds. So yeah, let's see what happens there. Lizzie, in the US, things going to get better or worse next year? What are you looking out for?

Uh, maybe the same.

Um, we'll take that for now. That's probably a win, I think.

I think so. Um, so I think we're going to see a lot more focus on energy affordability. We definitely saw, uh, that coming up in the few elections that we did have in November, and Democrats did pretty well, uh, kind of running on that ticket. I did speak to, um, a former member of Trump's team a couple of weeks ago who talked about energy affordability and access to energy being the most important things, and whether it's clean green or not coming further down the list of priorities. Obviously, as I said earlier, renewables do win there in a sense because they are very quick to build. So that's going to be a big issue for politicians, for businesses, and obviously for households. Obviously, US investors are still very worried about climate risk, still trying to find ways to manage it. They're just, you know, as we've said 1,000 times, talking about it a little bit less. But a big problem for investors in the US, and I think particularly going into the 2026 proxy season is this stripping away of investor kind of powers in favor of corporate boards. It was just last week the Trump administration released a new executive order about proxy advisor firms. Essentially, it looks like they are just kind of wanting to block any kind of dialogue on climate, environmental sustainability issues. So I think this proxy season is going to be definitely not a lively one, maybe, but I think the data is going to be very interesting to see how much those policies are taking hold. And then very briefly, more broadly, we're going to see a lot of countries implementing their climate reporting under the International Sustainability Standards Board's standards. I'm also going to be keeping an eye on CARBON measures, which is this Exxon-backed new kind of method of carbon accounting, which will be getting properly up and running in 2026. And finally, and not related to those subjects, methane. So that's another area where US companies have been lobbying and the US government against the EU on their methane regulation. And I think that that's going to be a big one to watch next year as well.

Yeah, definitely. I enjoyed Trump's little tour, was it last week, on supposedly on affordability, and he went off on his tirade about inflation was no longer a thing. And what did he say? That, you know, nobody needs more than $10 at Christmas. So why do you need $10 at Christmas or something? But I don't think I think he mentioned energy affordability once.

The economy is A+++. Indeed, indeed.

And another thing that just struck me in what you were saying was the fact I think we've mentioned Exxon about 3 or 4 times during this podcast, which was definitely something we weren't doing in previous years. Erin, in the legal area, what are you looking out for in 2026?

Yeah, so there have been quite a few areas in climate-related litigation that have really moved in 2025 that I'll be keeping an eye on because I think it'll be really interesting to see how they evolve in the coming One that stands out to me in particular is growing focus on chemicals, in particular PFAS. In the US, PFAS cases have kind of already made quite a big mark in recent years, and with a number of settlements reached with chemicals companies involving contaminated water supplies and things like that, involving companies such as 3M, DuPont, Chemours. And then over in the EU, we've seen similar sort of cases involving chemical plants in northern Italy, for example, in July, which is a really big case. Case. Uh, in the UK, PFAS-related litigation is kind of still in a bit— it's a step back, it's in its early stages, I would say. And it's definitely an evolving space.

I think it was mentioned in the environmental impact plan, wasn't it?

Yeah, so I think it's definitely an evolving space that we'll be hearing a lot more about in next year. And as you say, especially following the plan that was released earlier this month from the UK government, which— in which the government pledged to publish a strategy for addressing PFAS contamination Legal experts have said that the plan's emphasis on tackling harmful chemicals and applying the polluter pays principle creates potential grounds for litigation and warns that companies that fail to align with these commitments may be risking regulatory penalties and civil proceedings. So I think it will definitely be a bigger focus of next year. Something else I'll also be keeping an eye on is how attribution science develops across next year. It's a really interesting field of research which essentially looks at the role of climate change in extreme weather events. and it essentially makes it clearer for scientists to trace specific harms such as heat waves, sea level rise, and wildfires to particular activities or even specific companies. So right now, attribution science is a really interesting area within climate law, but it's definitely got a long way to go before it comes to actually driving more litigation. It's been named in a few recent cases. For example, the Shell case, that was a big part of it. That said, I think it's definitely something that would be interesting to watch, and I think it's really great to see how something that started off as quite a theoretical concept can grow to play a more meaningful role in climate mitigation.

Yeah, and something that's quite new as well. I mean, I don't think we really talked about climate attribution— attribution even, sorry— until the last couple of years. So yeah, definitely something. And just for our listeners, PFAS, in case you don't know, which I'm sure you all do, but are forever chemicals chemicals that are found in waterproof coats or non-stick pans and the foam that firemen use to put out fires, etc. Sorry, fire people, I should probably say, shouldn't I? Not firemen. And which now are increasingly linked to various health effects such as cancer and other impacts. And perhaps one thing we should just mention as well, in the EU simplification drive, they're looking to reopen the Water Framework Directive potentially, which could again open up this whole hornet's test in terms of, for companies, in terms of how they're actually regulated around PFAS. Aniket, what's on your mind in 2026?

Again, going back to artificial intelligence, I'm hoping that next year will give us more clarity about what the real impact of artificial intelligence is and what this technology actually means for energy transition. We know that data centers, we know that artificial intelligence and data centers are quite energy intensive. They will, they will, they will take any energy clean or non-clean possible. But we don't know exactly, like, what is the real impact of this technology. Experts have spoken to say that we are not quite sure what, what, what is the impact of this technology yet. We also don't, don't have the tools to properly assess the claims which companies are making about how AI will help the energy transition. So I'm hoping the conversation will be a bit more mature as we gather more data about the actual impact.

Yeah, no, I think that's a great point. And perhaps we need a bit more mature debate on everything, not just AI and data centres. So thanks to all of you for a really great conversation and lots of great insights. And I look forward to continuing the conversation with you all next year. Thanks again to all our listeners. And remember, if you want to keep up with sustainability laws globally and changes to rules and regulations, sign up for a free trial of Sustainable Views at sustainableviews.com.

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