Responsible Alpha’s top ten themes in 2025 encompass a broad set of interconnected issues which we believe are relevant in 2025 to executives, managers, and regular folks, just like us, for all organizations globally.
Let’s jump right in, have some fun, toast the new year, and predict 2025’s outcomes.
Responsible Alpha’s 2025 Top Ten:
10. ESG In Your Backpack, Ready for Travel: Standardized and Portable ESG.
9. Sustainable Finance Grows ex-US: US Fumbles.
8. Against Global DEI Pushback: We Won’t Go Back.
7. Pays to Be E$G Says C-Suite.
6. Drought and Deluge: Water Everywhere and Nowhere Grows the Regenerative Blue Economy.
5. Round and Round: Circular Economy Iterates.
4. Nature Mean$ Money: Beware Biowashing.
3. Renewable Energy Growth Grows.
2. Climate Leadership Fills the US Vacuum.
1. To Stay in Power…. Authoritarians Befriend Sustainability.
The Details
10. ESG In Your Backpack, Ready for Travel: Standardized and Portable ESG
Demand for standardized and simplified ESG reporting that can be transported across geographies will grow. While ESG is an acronym used for the first time in 2004, many of the underlying ESG metrics are much older. In fact, the metric “reporting the number of members of a board” – a commonly used governance metric dates to its mandatory use under the NYS State Corporate Law of 1811. In 2025, the anti-ESG forces will continue to mimic Don Quixote and chase imagery enemies.
9. Sustainable Finance Grow ex-US: US Fumbles
Sustainable finance will grow despite the new US administration as US sustainable assets are only 11% of global sustainable AUM, as per the Morningstar definition.
8. Against Global DEI Pushback: We Won’t Go Back
Despite targeted efforts to dismantle DEI, global DEI efforts will grow with increasing data driven approaches, adoption of intersectionality, and inclusive leadership recognized as a core competency.
7. Pays to Be E$G Says C-Suite.
Standardized ESG metrics linked to executive compensation are now normal globally. Guess what? Currently, 81% of companies globally use ESG metrics in executive compensation plans, up from 68% in 2020. Back in the day, it used to be 0% of companies globally using ESG metrics in executive compensation plans.
6. Drought and Deluge: Water Everywhere and Nowhere Grows the Regenerative Blue Economy.
From drought to deluge, increasing extreme weather continues to drive water scarcity affecting 1.8 billion people will only increase economic risks facing countries, organizations, and companies’ supply chains. For example, Finland's Water Stewardship Action Plan and others are emerging to address this critical issue on a national and international scale.
Given this, it is important to understand that the Blue Economy is not simply the ocean part of this Green Economy.
5. Round and Round: Circular Economy Iterates
Circular economy models will continue to iterate with standardization of deposit return schemes (DRS) and extended producer responsibility (EPR) programs adopted in 2025 while forever chemicals will see increasing bans globally. Sustainable packaging innovations will accelerate, with companies moving away from single-use plastics.
4. Nature Mean$ Money: Beware Biowashing
Since the Kunming-Montreal Global Biodiversity Framework (GBF) was adopted in 2022, countries have committed to ambitious goals, like the "30x30" pledge, to protect 30% of land and marine areas by 2030.
But despite significant momentum, The EU’s Corporate Sustainability Reporting Directive and Nature Restoration Law have further cemented these objectives, 85% of countries missed their COP16 NBSAP submission deadline. while nations like China have submitted National Biodiversity Strategies and Action Plans (NBSAPs) to solidify their commitments.
Major economies like Germany and the UK have not delivered updated plans, while the U.S. is not a signatory.
Since now nature means money, organizations must address biowashing risks given increasing legal and reputational risks, parallel to the greenwashing risks facing climate commitments.
3. Renewable Energy Growth Grows
Despite the new US administration’s expected pro-drilling policies, demand for oil and gas will continue to both thin and weaken, as battery storage combined with renewables is increasingly cost competitive. Global solar and wind should rise from 13% at the end of 2023 to 30% in 2030.
In the US, 77% of announced clean energy projects since the IRA, representing 92% of investments, are in states where President-elect Trump prevailed in the 2024 election. 18 Republican Senators wrote a letter in August calling on house leadership to defend the IRA.
Proposed US tariffs on China may backfire and only strengthen China’s growing EV and green tech leadership.
Staying ahead of the curve, US tech companies (Microsoft, Amazon, and Google) have signed deals to gain access to reliable nuclear electricity 24/7 for their data centers.
2. Climate Leadership Fills the US Vacuum
The global economy is a bad, bad overachiever, sailing past 1.5ºC above pre-industrial levels in 2024. Climate is a global concern, not just a US concern.
While the current US administration announced new goal to reduce U.S. greenhouse gas emissions by 61% – 66% by 2035, on a 2005 basis, the incoming US administration intends to exit the Paris Agreement, furthering eroding the US as a trusted global partner across this and many other treaties, this opens the global leadership vacuum for other political leaders.
Amongst the mayhem and noise, BNEF’s US clean energy 2035 forecast under the new US administration shows 83% of renewable energy deployments when compared to Biden’s original IRA.
1. Authoritarians Befriend Sustainability… To Stay in Power.
Happy New Year from Responsible Alpha.
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