What to expect in sustainability in 2026

Welcome back to Sustainable Views, the podcast looking at sustainability policy and regulation in depth. My name is Philippa Nuttall, and I'm editor of Sustainable Views. Today we're going to be discussing what the heck is going on in the world and what it all means for sustainability. With me to shed some light on some of the darker subjects we will be discussing today are our UK correspondent Florence Jones. Hi, Flo. Hi. And our US editor Elizabeth Meagher. Hi, Lizzie. Hi. So we're only in mid-January, yet since we returned from the Christmas break, US President Donald Trump seems to have done his best to turn the world upside down. As we record this podcast, he's just about to take to the stage in Davos at the World Economic Forum's annual meeting. He's doubling down on his desire to take Greenland and he's in the process of appointing his so-called Board of Peace for Gaza.

The Board of Peace, so important. This board has the chance to be one of the most consequential bodies company's ever created. And it's my enormous honor to serve as its chairman. I was very honored when they asked me to do it. We had an idea to do it, and then they came, they said, you'll be the chairman. And, uh, but I, I take it very seriously. We have a great group of people.

So, Lizzie, um, I wanted to turn to you as our resident US expert. You wrote a piece earlier this month which was interesting that was saying that companies are now more scared of Trump and what comes down the pipeline from him than any kind of litigation that might arise from ESG legal cases, which is obviously a big thing on their mind a couple of years ago. Can you tell us a little bit more about this research and exactly what it shows?

Yeah, absolutely.

So this was a survey by law firm Norton Rose Fulbright that they do every year. And what they found was twice as many companies are worried about political pressure this year than were last year. So they didn't get too into the specific details of what companies are worried about, but there have been various Department of Justice investigations into corporate practices. Most relevant for Sustainable Views readers and listeners will be diversity, equity, and inclusion programs, and a lot of companies have those. I think it's really striking because it's hard to imagine companies feeling that way under almost any other US president, where they're more worried about direct political attacks than regulation or lawsuits from environmental groups or other stakeholders. And one more thing is a quarter of companies still expect higher levels of ESG-related dispute risk, and they see a lot of that coming from class actions, which is lawsuits brought by groups of consumers. So they're usually greenwashing cases. So it's an interesting kind of conclusion there that could be that consumers are the kind of the last bastions of accountability on sustainability claims where investors have kind of fallen away.

Interesting. And I mean, you sort of gave us a little bit, I suppose, I'm not quite sure I can call it positive news, but it wasn't all negative in the sense that obviously, as you said, consumers may still come forward with class actions. And there's obviously still some pressure and some eyes on companies in terms of what they're doing around sustainability. Could you talk a little bit more widely about this sort of the transition and sustainability as a whole? I mean, is it going to be really sort of focused on perhaps more niche issues, like you say, like greenwashing in the next couple of years? Or do you still see that there's momentum in terms of the transition in the US despite Trump's drill baby drill sort of rhetoric at home and then obviously his rather belligerent actions abroad, which often are also based on this idea of resources, national security.

So I think that it's, as we've talked about at various points on this podcast in recent months, it's very much about kind of affordability, energy, and kind of applying sustainability to that kind of logic, looking at it through that lens. So it's a different way of coming at it. As we've talked about, you know, it's not the worst thing in the world if companies don't feel the need to kind of fluff up their sustainability claims in the way that they used to. But it's definitely through a different lens. So absolutely not kind of time to give up on the transition in the US, but totally different way of looking at it.

And in terms of renewables, for example, you know, are we still seeing investment and renewables come online in the US or is this shift— I mean, we've seen the shift Aniket wrote recently for Sustainable Views about the investment into nuclear, which still seemed, I think, quite small in comparison to renewables. But yeah, yeah. What are we seeing inside the US itself?

So a lot actually. And the timing is good because we have a lot of figures that have just been released. I'll try not to fire too many at you. And so just first kind of the bad news. And so yesterday The Clean Economy Tracker published its figures for December, and they have found that while there was $519 million worth of new clean economy— so that includes kind of manufacturing and energy investments— announced in December, there was $4.35 billion canceled in the same month. So that's around 8 times more worth of projects canceled. But the good news, and these are from figures that came directly from the government, was by the end of 2025, solar was responsible for nearly three-quarters of all new US electricity generation. Installed utility-scale solar is now bigger than wind, not surprising given the issues that the administration has with wind specifically. And in the next three years, the government forecasts solar growing to bigger levels than nuclear or coal, so growing by 46% in the next two years.

And do you think that is, I mean, partly because of affordability? I mean, do you think there's a sort of understanding from Trump that, you know, things like solar do bring down energy prices, or is it just kind of people— it's projects carrying on in the background almost, not making too much noise about them?

So it's very difficult to work out why the administration seems more kind of comfortable with solar than wind. It might be, you know, the golf course point, that wind turbines ruined his view.

There are windmills all over Europe. There are windmills all over the place. And they are losers.

There has been this kind of all-out war on wind in the past year and actually in the past few weeks the courts have allowed, have kind of unblocked a few of those wind turbine wind projects, allowed them to proceed that the government had canceled. It's, yeah, it's again, you know, trying to get into the psyche of the administration is difficult. But what I have heard anecdotally is that those kind of really big projects like Revolution Wind that are catching the attention of the administration, they are having issues. But it's the smaller kind of community-level projects which I guess tend to be solar and that are allowed to proceed because you don't need federal approval for them.

Interesting. So I mean, to sort of summarize what's going on, do you— is it kind of glass half empty, half full, or is it definitely a lot more empty than, than full at the moment?

I would say also, I guess keeping it just on energy, it's, it's not too bad. You know, it's really about separating the rhetoric from the administration, from the reality on the ground. And those two things are very, very different. I have been asking investors and analysts over the past week or so about their attitude to clean energy prospects in the US, and they remain really bullish even despite these huge roadblocks. And I think the story is kind of imagine how well clean energy would be doing in the US if the credits hadn't been removed, the administration wasn't being so aggressive about it because it's still looking pretty good.

Okay, well, that's a little bit more positive than I was expecting. So we'll take that as a win for today. And I mean, in Brussels tomorrow, which is Thursday, obviously will already happen by the time this podcast comes out, but there's the EU summit to kind of discuss how Europe's going to stand up to Trump over Greenland. And there really is this call for renewables to sort of be sped up the transition. So I think we'd had this call when Russia invaded Ukraine. It seemed to calm down a little bit. There's been a lot of focus on LNG. And now there's really this, I think, realization that we're just becoming hooked to get on US LNG, given where Trump now is, that this is again a security and an energy threat and that it could have the result of actually speeding up the transition in the EU if policymakers decide that's where they want to go, because it's another, yet another occasion where fossil fuels, it's not just their climate impacts or their environmental impacts, but also very much their security impacts that are being brought to the fore. So yeah, really lots to, lots to keep an eye on and out of a bad situation, I suppose something vaguely positive could unfold. Flo, I wanted to come to you next. We're seeing this growth everywhere, but notably in the US around AI and data centers, which obviously have a massive energy and water footprint and emissions are going up. These companies, the tech companies, often in the past were very proud to sort of show that they were moving towards carbon neutrality, that they were investing massively in renewables. This has definitely shifted a bit and emissions are increasing. And you wrote recently about Microsoft's investments in soil carbon credits as a way to offset some of its growing emissions. And I just wondered if you can just sort of talk us through that a little bit more and how serious is this seen as kind of a way for the tech companies to continue growing in terms of AI, but also to meet their carbon targets?

Yeah, absolutely. So as you mentioned, the emissions from the tech sector are soaring, which is largely prompted by the adoption of generative AI, things like ChatGPT or other chatbots, which are extremely energy and water intensive to train. Tech companies are therefore expanding their data center fleets, which are basically where the servers used to power these models are housed. They're also used for things like cloud storage, so a whole range of services. Um, but they're also acting interestingly as a huge boost to the US economy. And you mentioned kind of Trump's support for the tech sector. Um, so in the first half of 2025, US GDP grew 3.8%. And when you exclude data centers from that, it only grew 0.1%. So that data from S&P just shows the scale at which data centers are really kind of providing this economic boost. Um, interesting. Yeah, but all the while emissions are on the rise. Microsoft, where we mentioned, is no exception. 23.4% emission rise in 2024 compared to a 2020 baseline. And that's its own kind of sustainability reporting. It does have very ambitious climate targets, which leads us into the soil carbon credit deal. The company says it's going to be carbon negative by 2030 and that by 2050 they're going to remove from the atmosphere, the amount of carbon dioxide that's equivalent to all the emissions the company's ever produced since it was founded in 1975. So that those are very, very ambitious targets. And by its own admission, this is going to take carbon credits. There's no other way. So that brings us to this carbon credit deal, which is the largest ever soil carbon credit deal. And the company is going to buy 2.85 million carbon credits from another tech company called Indigo Ag, which does regenerative agriculture-based carbon credits. So the idea is that the money from Microsoft, from the purchase of the credits, will be distributed to US farmers to support them adopting regenerative agriculture practices. So that could be things like no-till farming or reducing pesticide use, and that can promote healthy soils, which then allows soils to absorb rather than emit carbon as they do when they're degraded.

You know, we've had a lot of discussion in the past around offsets or carbon credits, and they've always been quite controversial in the sense of whether they're really achieving anything. There was a lot of reports came out a few years ago suggesting that in terms of nature, there was actually very little, if anything, really being achieved. Is this somehow different, or is this sort of a repetition of the past? And to come back to what Lizzie was talking about, you know, are we greenwashing again, or is there a real change here?

Yeah, I think there are a number of different potential issues with the carbon market, and some of them are more kind of fundamentally ideological and some of them are more to do with the specifics. So on the specifics, there's obviously been a lot of work in recent years to improve the integrity of the carbon markets. And we have things like the Council for the Voluntary Carbon Markets core carbon principles. So kind of standardization essentially across the market. This is the first soil carbon deal to feature credits approved under the ICBCM principles. So that in terms of assuring the integrity of the deal is a step forward. However, as you say, there are people who have more of a fundamental issue with the idea of carbon credits that a company can essentially pay to offset their emissions rather than reducing their own emissions. There's kind of no avoiding that. That's within the whole concept of a carbon credit. So as long as carbon credits continue, that criticism will always appear from certain groups, I'm sure. And then on kind of the regenerative agriculture side of carbon credits, it is complicated. Regenerative agriculture is in itself quite a woolly concept and it covers loads of different practices. And farming is quite hard to predict. Different things can happen and different things happen on different farms. So I've been speaking to some investors about this deal and some of them have kind of raised that as a potential area to keep an eye on, you know, ensuring that these practices are adopted properly and that ensures that the carbon is absorbed. That being said, investors are for the most part very excited about this deal. I think it shows that money's going into the sector, which hasn't seen that much money in recent years. And then we have the issue of the permanence of carbon removals. And this is an issue which continues to plague the carbon markets. The idea that if you kind of absorb carbon on a farm into the land, how long is that carbon staying there? And does that mean it's equivalent to the emissions produced by a company like Microsoft? So a 2024 study, which was published in Nature, kind of lit a match to this whole kind of bonfire of criticism, which found that to store carbon in the soil, you would have to store carbon in the soil for 1,000 years to kind of neutralize the CO2 released from burning fossil fuels. And typically, nature-based carbon credits require carbon to be stored for about 40 years. So there is still a lot of dispute within different groups who are operating in and around the market as to how long carbon needs to be stored to effectively neutralize or remove carbon that's emitted by a company.

Okay, so still quite a few unanswered questions, but yeah, interesting to follow. And do you know any of other companies that are sort of looking at similar schemes at the moment?

So there's a lot of growth in, in these kinds of credits, so it's definitely an emerging area. It's not one of the major types of carbon credits we've seen. Those, of course, of course, tend to center around things like tree planting or kind of restoration of nature in certain areas. This is slightly different and it's new. I think there's various kind of startups which are cropping up in the sector, and it will definitely be something I'm keeping an eye on. And I think in general, it kind of follows the wider trend towards regenerative agriculture, which has existed as a concept and an idea for a long time, but in recent years has really kind of gained traction and has become more of a sustainability buzzword. And I think that's reflected in the growth of this market. Companies are kind of hearing about regen ag, oh, that sounds interesting. And that drives demand for credits such as this.

Yeah, and it's interesting, isn't it? Because regenerative agriculture also seems to be one bit of sustainability that Trump or the Trump administration seems to think is positive. I think Robert Kennedy touted it as, you know, a way to make America healthy again. And I think earlier this week, the US Department of Agriculture came forward with, I think, $700 million this year for a US regenerative agriculture pilot scheme. So yeah, that seems to be one bit of it, like his solar panels that seem to have escaped the wrath against the rest of the sustainability agenda. So yeah, let's see what happens. But yeah, definitely interesting, this sort of tech area and kind of what's happening in terms of AI and then emissions and how they still see themselves as sort of part of the solution in terms of moving forward with the energy transition. So Lizzie, just before we finish, I'd like to come back to you and just in terms of kind of what you're really looking out for in the US at the moment. And it's obviously a very fast-moving landscape and who knows what sort of Trump does next, but sort of beneath the headlines a little bit like you've been doing, kind of, yeah, what are you looking out for at the moment? Where do you think the The interesting stories are going to be starting with the headlines, putting aside geopolitics.

I think that we are going to see some movement from the Environmental Protection Agency to further kind of roll back environmental standards. I also think we're going to see some changes from the Securities and Exchange Commission ahead of kind of shareholder proxy season, annual general meetings, to kind of roll back shareholder rights even further. And we'll be kind of exploring exploring that throughout the year. And then beyond that, so one of the questions that I keep putting to European sustainable investors is whether, at what point they would kind of look to de-risk from the US. And I keep kind of seeing this theme popping up in various places. The answers that I've got so far is, sure, yeah, but it's the US, you can't. And, you know, one investor said to me, if any other government was behaving this way, you you know, you would look to underweight it, but you really cannot be missing out on the performance of US equity markets at the moment. So it does kind of seem like the, the administration, certainly from an investment in the US perspective, can kind of do what it wants for now, um, because no one wants to miss, um, that kind of— is it a bubble, is it not— but amazing kind of stock performance. So I'm going to keep asking that.

Excellent. We've got plenty to do. You're busy. I noticed the other day, I think it was yesterday or the day before, that Denmark's academic pension fund said that it's going to sell off its US Treasury bonds worth, I think, $100 million. So there's a little bit of movement there in terms of that certain sort of smaller funds perhaps are trying to move their way out of them. And they're obviously doing it, I think, because of what's happening in Greenland. But it'll be interesting to see if, yeah, as you say, if others follow suit.

Yeah, absolutely. It seems to be much more viable for private investors. Um, see these big public pension funds, it's very difficult to explain why you missed out on the AI boom, um, at the moment.

Indeed. I suppose it could be when, if the bubble bursts, perhaps they'll be glad that they weren't involved. Well, thanks to both of you for, for, for all of that. I mean, it's super interesting, and let's hope But yeah, everything is still very up to date when the podcast comes out. It's, as we've all said, it's very fast moving at the moment, what's happening in terms of geopolitics in particular. But for our listeners, to make sure that you keep most up to date with sustainability and environmental regulation and these changes in geopolitics that are influencing sustainability, be sure to sign up for a free trial of Sustainable Views and for our daily newsletter at sustainableviews.com. And we'll have a new episode of this podcast at the beginning of February.