Should the headlines be believed, 2025 has been the year in which climate change and nature lost relevance to business and capital markets. It is easy to point to high-profile regulatory, investor and corporate walk-backs as emblematic of the death of ESG – as a ‘woke’ concept that has finally been conquered by financial sensibilities. The lack of significant concrete initiatives emanating from COP30 in Belem, Brazil did little to arrest that perception.

However, behind the generalisations, the empirics on the ground largely tell a different story. In fact, our monitoring of the trajectory of global corporate and capital market ambitions on issues like climate change, nature and DEI has been surprisingly consistent all year. While US federal and Republican State action continues to aggressively wind-back – and in some cases seek to aggressively challenge –ESG laws, policies and practices, this is being countered by the steady drum-beat of action on climate by Democratic States (which represent nearly 2/3 of US GDP) and in the rest of the world. And in China – the climate action trajectory is accelerating rapidly.

This is borne out by the numbers. Of the 74 policy changes related to climate made in Q325 globally, 51 were aligned with net zero or ahead of a net zero trajectory, while 23 were non-aligned. Of the 23, only seven were outside the US. This means that slightly less than 90% of all relevant policy movement outside the US in Q3 was pro-climate, while in the US slightly less than 85% was non-aligned. China pushed through four relevant changes, all aligned with net zero.

The data also shows that close to three times as many companies and investors are accelerating their climate commitments as are winding back (32% vs 13%). The strong majority of companies continue to quietly pursue their management of climate-related issues as an integral part of their strategy, business planning and financial risk management and opportunity capture. And among investors, the global self-reported uptake of ESG sits at 87% this year, down from 90% in 2024.

This conclusion continues to be reinforced by studies released in the last month or so, including:

• A UN Global Compact–Accenture 2025 CEO Study: 88% of CEOs globally believe the business case for sustainability is stronger than it was five years ago, while 99% plan to maintain or increase their sustainability commitments; and
• Deloitte’s 2025 survey of over 2,100 C-suite leaders globally reveals that sustainability remains a top business priority and confirms that investments are increasing.

This is not to say that the outlook is all positive. Recent studies on current warming trajectories, based on current policy settings, place the world on track for 2.5-2.9ºC of warming above pre-industrial averages – well above the Paris Agreement aims to limit warming to well below 2ºC, and to pursue efforts to limit it to 1.5ºC. Accenture reports that only 16% of companies, representing only 4% of global operational emissions, are on track for net zero by 2050. However, many prudential regulators, central banks, financial institutions and corporates alike are not taking this as a sign that the market is unlikely to transition in accordance with Paris Agreement targets. Instead, they are forming the view that this only increases the risk not only of heightened physical risks but disruptive transition – and are thinking laterally about their business strategy to navigate through waters that are not only unchartered, but increasingly choppy.

So while the phrase ‘there is light at the end of the tunnel’ seems a bit inappropriate for the physical and economic transition risks into which the global economy is facing, perhaps we can say that the benefit of strategic foresight – which recognises that the future looks nothing like the past – is only increasing.

This article offers just a glimpse into our thinking on this issue. We provide a range of tailored Insights services to support our clients. For more information or to discuss how we can support you, please reach out Pollination Law Managing Director Sarah Barker, or Head of Knowledge & Insights Kate Hilder, to discuss.