Where Corporate Sustainability Stands at the End of Q2 2025
Following up on our previous blog, The State of Corporate Sustainability: Key Takeaways from Q1 2025, we’ve added some insights from Q2.
Halfway through the year, the corporate sustainability landscape is notable for quiet action, regulatory complexity, and reduced external communications. Companies in all industries are increasing spending and evolving their internal strategies, without sharing their approaches. Below are takeaways from client experience, expert discussions and industry news.
Companies Expand Carbon Removal Investments
Companies taking the lead in climate are investing more in carbon removal along with their reduction initiatives. Carbon removal investments in direct air capture, ocean-based removal, and mineralization are becoming standard practice following leaders like Microsoft and Shopify.
The Harvard Law School Forum on Corporate Governance listed carbon removal as a “top 10” priority for 2025 with sustainability teams. Carbon removal helps companies address hard-to-abate emissions and position themselves as innovators in an increasingly regulated global market.
Regulatory Uncertainty Fuels Anxiety Around SB261
California’s SB261 requires in-scope companies to disclose climate-related financial risks by January 1, 2026. In July, the California Air Resources Board (CARB) published guidance clarifying timelines and enforcement. Even with CARB’s assurance about good-faith efforts, companies without TCFD-aligned reporting experience are anxious about what data to include and ways to assess financial and climate risk exposure.
This uncertainty has sparked internal reviews and scenario planning, but hasn’t yet translated into detailed public disclosures. With a January 1, 2026 due date, many companies are still building the systems and oversight needed to report, with many waiting to see how peers respond before publishing themselves.
Sustainability Reports Are Delayed
Despite increasing sustainability spending, many companies hesitate to communicate about ESG initiatives. The recent EcoVadis study found that 87% of U.S. firms boosted budgets, yet public updates remain sparse.
Along the same lines, formal sustainability reports have declined this past year. As highlighted by Sustainability Magazine, only 432 Russell 3000 companies issued reports in H1 2025, a 52% decline from 2024. Companies are delaying or skipping reports altogether.
This trend doesn’t mean sustainability work is stopping. It’s happening behind the scenes, with public messaging becoming more risk-averse. In some organizations, this allows them to budget for and focus on the actual work, rather than spending time and energy on a report.
International Buyers Keep the Pressure On
While domestic communications slow, multinational supply chain demands push U.S. companies to act. European and Asian companies, motivated by regulations like the EU CSRD and a non-political understanding of climate risk, have not stopped asking US suppliers for detailed greenhouse gas data, risk disclosures, emissions reduction targets and evidence of mitigation strategies.
Companies that have not committed to sustainability reports are still allocating resources to measurement, data systems, and carbon accounting to win business and remain competitive. Across industries, procurement and legal teams engage in sustainability and ESG discussions in organizations to help solidify nascent strategies.
Halfway through 2025: Quiet Action, Regulatory Deadlines, and Global Expectations
Halfway through the year, we continue to see the same trends as in Q1, with some cooling down on the initial panic and uncertainty seen in January and February.
Greenhushing and political pressure are still no match for companies that understand the competitive advantage that sustainability provides for their business. The rest of the year will continue to be a face-off between corporate pressure from clients and regulatory pressure against political backlash and legal risk.
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