27 January 2025 / WORDS BY Pollination
To kick off 2025, we asked leaders across Pollination to predict what may happen in the year to come. Our experts have cast their predictions on what to expect for the climate and nature transition broadly, as well as what to expect in certain regions and industries. So, what do we foresee? From financing to regulation, reporting to turning promises into reality, here’s what Pollination’s leaders believe is on the horizon for 2025.
Billions in capital that has been allocated to fund managers to decarbonise the global economy will be under increasing pressure to find a home.
Billions of dollars of capital have been allocated to global fund managers to invest in the transition to net zero.
Many financiers have committed to phasing out investments in fossil fuels and investing more in green infrastructure, clean fuels and transport, clean energy, regenerative agriculture and supply chains such as critical minerals.
However, capital has been reluctant to move at scale into greenfield development, venture or growth to support the critical solutions needed to address climate change as we breach 1.5C.
We have seen increasing public support with the Inflation Reduction Act and in Australia through institutions like the CEFC and NRFC.
There is now a critical need for this committed capital to be deployed, to take greater risks to fund solutions and for public and private capital to work together.
While others talk about distant nuclear promises, householders talk about cheap, renewable energy reality.
Renewable energy’s exponential cost reductions and residential installation rate have led to the greatest democratisation of energy since the Industrial Revolution.
By the end of 2024, more than 4 million Australian households installed solar PV on their rooves.
Householders are now in control and, for the first time in our electricity history, are making decisions about how they use, make and store energy (if they have a battery or EV).
In 2025, we’ll see more discussion and action on the engineering and regulatory work required to ensure we maintain and improve reliability of our electricity systems, led by the role that everyday Australians will play.
Technology in the household (IoT), technology in solar panels and inverters, technology in smart meters and technology in EV’s (vehicle to grid) will continue unlock a wave of new business models, demands for regulatory refresh and continued opportunities for private sector investment from households to commercial to industrial prosumers.
All in service to a cheaper and cleaner energy future.
Corporate emissions target resets will be common but will actually be a good thing for transition planning and for investors.
The arrival of mandatory reporting around the globe means transition plans and targets are now unambiguously financially material information.
This raises the bar for companies setting and declaring transition targets and plans, in an already dynamic environment.
It’s likely that many companies globally will need to re-state and reset their targets in response.
Some observers may see this as reducing ambition, but these new targets will be more rigorous, likely backed by capex expectations and more integrated with company strategy.
Mandatory reporting will help us identify real transition commitments, gaps and needs for further investor and policy engagement, more effectively driving decarbonisation.
AI will help relieve the load of sustainability reporting and disclosure on corporate teams so they can refocus on real world implementation.
AI has been undergoing a fast-paced evolution from predictive AI where technology can make educated recommendations, to generative AI where technology can produce informed replies and knowledge creation. Increasingly we will have access to AI agents who can independently perform tasks, make decisions, and take action.
For sustainability professionals this means huge opportunities to unlock their time from unrelenting reporting and disclosure, RFP and due diligence processes.
There are still challenges to overcome (not least of which is the impact of AI on energy and emissions), but the possibilities are encouraging.
2025 is the year leading organisations will better engage with AI for sustainability purposes, even if just to help them clean data up and get started with strategic response, identify inaccuracies and duplications – to erase the ‘tech debt’ many organisations face.
In 2025, the global transition to a low carbon economy will speed up as cost curves continue to plummet.
Some things are sure. The word climate will fall out of favour in the new Administration. The U.S. will withdraw from key international climate negotiations. And C-suite sustainability functions will undoubtedly be hushed to avoid unnecessary political exposure.
But actions speak louder than words. Follow the money.
We expect the U.S. economy and U.S. corporations to continue driving toward a lower carbon future, with the quiet support of federal and active support of state policy around the country. Why? The transition is no longer driven primarily by environmental considerations. In 2025, companies will continue to transition their business models because it makes economic sense.
And the U.S. Government has compelling economic, competitive, and geopolitical interests for its companies to continue leading the transition to a global low carbon economy. There’s no going back. The race is on.
Food companies will take communal leaps forward in tackling challenging FLAG emissions.
Most food companies now understand that +70% of their GHG emissions inventory is embedded behind the farm gate in FLAG emissions and that lack of leverage means that they are hard to abate. But doing so is critical for meeting SBTi targets.
They also understand that competitors and non-competitors sourcing from the same supply shed are facing the same challenge. With that consciousness, companies will form collaborative groups to galvanise all the actors in a shared supply chain, using a programmatic approach to decarbonise.
Costs and benefits will be proportionally shared from farmer/grower through to brand owner/retailer. Innovative transition finance models will scale the companies’ limited access to capital. In rolling the programmatic approach out across multiple collaborations and supply chains, companies will make significant steps toward their SBTi ambitions.
According to our leaders’ predictions, 2025 will be a year of significant progress in terms of the global climate and nature transition. We look forward to contributing to that progress through our work to accelerate the transition to net zero across strategy, law, and investment.
Stay up to date with our latest thinking here.
Receive latest news and global perspectives from Pollination.
By clicking submit, you agree to our Terms & Conditions.
