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Blog | Wednesday January 15, 2025

A Year of Uncertainty: Ten Big Questions Facing Sustainable Business Leaders in 2025

Preview

As we begin 2025, and the second half of the 2020s, their promise of being a “decisive” decade for achieving crucial goals has—so far—fallen short.

Instead, we find ourselves facing more questions than answers. How we respond to them, and their second and third-order effects, may not be decisive, but they will be defining.

The momentum for sustainable business that was so evident in 2020 has stalled. There are many reasons for this: economic volatility, technological change, political instability and backlash, prioritization of regulatory compliance over action, and a fractured information ecosystem prone to mis- and disinformation.

Underlying all this, many in society have lost faith that they will benefit from a more sustainable economy. They not only see little in the way of economic benefit, but also view many of the messengers of a just and sustainable world as talking down to them and ignoring their realities. As the Chief Sustainability Officer (CSO) of one of our member companies put it to us in December: “When middle-class families are struggling to keep up, our ideas sound like empty slogans.” We have to overcome this cynicism amongst many outside the sustainable business community and take renewed action that achieves tangible results.

Here are ten questions that are likely to define progress in 2025:

How will businesses respond to ongoing attacks on sustainable business?

Many businesses have trimmed their sails in the face of online activists and political figures challenging the very legitimacy of sustainable business. There are important debates over how to take action on climate and diversity. But the current effort to delegitimize the very concept of sustainable business, despite considerable evidence that it is essential to resilient and innovative business, and highly valuable for social and economic progress, is undermining important progress. Careful communication is one thing; failing to respond to misplaced and inaccurate attacks is another. With diversity and climate efforts under particular attack, and misrepresentations and misinformation about sustainability generally running rampant, when will business leaders decide that it is time to call out the inaccurate and damaging arguments that are based more on ideology than objective reality? 

Do businesses have a “red line” when it comes to rule of law?

2024 was a record-breaking year of elections. This year, businesses face an environment in which the rule of law is being questioned and undermined by elected officials, other political influencers, and amplified on social media. Observers like Rachel Kleinfeld have argued that when these trends advance, economies overall and individual businesses face more challenging conditions. After a burst of comments and commitments on such matters several years back, most business leaders have retreated, choosing not to call out attacks on the rule of law and the rise of populism. Will this continue? Or is there a point when companies and individual business leaders conclude that they need to contest the decline of rule of law?

Will sustainability regulations in the EU be scaled back?

With a new European Commission and Parliament, political uncertainty in many European member states, and concerns that the regulatory frameworks governing various aspects of sustainable business are too onerous, expensive, and complex. There are growing signs that the regulatory requirements may be changed, with options ranging from consolidation, to delayed implementation, to withdrawal. Should changes come to pass, the question then becomes whether they are viewed as a pullback or U-turn from the Green Deal, or a refinement designed to make the rules more effective and efficient. Europe is likely to remain an engine of progress in formalizing sustainable business, but the pace and scale of that leadership is unclear as we enter the year.

Will companies pay a price for missing or reducing their targets?

Many companies are missing their targets, on important issues ranging from Scope 3 emissions to nature to diversity. As a result, many businesses are rethinking whether and how to set new goals looking out to 2030 or beyond. Regardless, the question remains: will companies face meaningful criticism from customers, employees, investors, stakeholders, or even litigants bringing legal challenges for these shortfalls? The ways that companies make sense of the simultaneous need both for pragmatism and ambition has huge consequences. It is not an option to choose only one of these two directions.

Will the focus on regulation prove transitory, giving way in 2025 to greater innovation and ambition?

This is a question of massive importance. Companies have spent untold hours, dollars, and euros preparing for new regulatory compliance regimes. The net result has been more effort dedicated to measuring performance than achieving progress. This is not a formula that will produce the innovation or positive outcomes that are urgently needed. With the 2026 implementation date for the CSRD looming, one big question is whether this is the last year of compliance readiness, and we return to our regularly scheduled programming, or whether regulatory readiness continues to predominate.

Will COP30 herald the demise of COPs as we have known them?

The climate, biodiversity, and desertification COPs in 2024 were widely seen as failing to deliver. What does this suggest about the viability of COPs as they are currently constructed and organized? Cristiana Figueres and Ban Ki-Moon took the lead in suggesting reforms to deliver more decisive and effective outcomes, only to be largely dismissed by the UN system. It is nonetheless clear that the inherent difficulty in achieving consensus amongst nearly 200 countries with highly diverging interests and power is preventing clear outcomes. Are the COPs destined to be considered in the same light as Churchill’s famous comment about democracy, “the worst form of government…except for all the others that have been tried?” COP30 in Brazil will be yet another stress test, not only for climate action, but also for the very COP model itself. And if the current version of COPs is not working well, what alternatives exist?

Is it better for COP30 to have the Trump-led US in or out?

In 2017, President-elect Donald Trump withdrew the United States from the Paris Agreement, ignoring calls from business, civil society, and many others to have the world’s largest economy and historic emitter remain. It is widely expected that he will do the same in 2025. This time around, there is a real question about whether the global effort to fight climate change would be better off with the US in or out. Should a Trump Administration remain in the Paris Agreement, the US might be a net negative, interfering with ambitious action at COP, and joining forces with other major oil and gas producing countries to water down, if not prevent, a meaningful agreement in Belem. Might it instead be better for the countries that are genuinely committed to progress on climate to move boldly ahead without the US?

Who will emerge as the new wave of sustainable business leaders, and how will they be different?

The last wave of sustainability ambition was characterized by high-profile CEOs, mostly from Western companies, who proclaimed new commitments and weighed in on many social issues. This was immensely valuable in catalyzing action and raising awareness. Today, the profile of leadership is changing. There are innovators coming from all corners of the world, not only the global north. There is a recognition that the voice of the rising generation that will be wrestling with the greatest impacts of climate change and technological innovations needs to be heard. The nature of leadership is also changing. While broad proclamations are important, delivering the goods is even more so. It is never easy to predict when and where leaders will emerge. But the next wave of leaders will be younger than the last, more globally representative, and more focused on delivery.

How will the role of the CSO evolve: will they be playing defense or offense, preserving gains, or pushing forward?

We closed 2024 with a look at how the role of the CSO is evolving, focusing on three archetypes: the steady manager, the integrated strategist, and the transformative change agent. Following the US elections in November, we added the “defender-in-chief,” a CSO who focuses on, well, sustaining progress to date as various forces push back on existing activities.

In 2025, it is likely that every CSO will have to play some defense. But it is equally true that any CSO who is unable to or prevented from painting a picture of transformative change will not be serving their company well. The world is experiencing transformative change, some of it directly related to sustainability, some of it indirectly related to sustainability. This presents both a massive opportunity to shape and leverage this change for positive sustainability outcomes. It also opens the door to link these changes to outcomes that benefit people and communities. And at a minimum, it demands attention to the many ways that companies can be resilient in the face of profound change.

Finally, and perhaps most importantly, how can we talk about sustainability in a way that will resonate with the general public, and demonstrate convincingly that these efforts will improve their lives and well-being?

It is increasingly clear that in the US and Europe many citizens, public officials, consumers, and others find the sustainability narratives that have been used over the past 30 years tired, uninspiring, and sometimes rather off-putting. Many in the public feel that an agenda is being forced on them that disregards their needs or interests, and is cooked up by elites they hold in low regard. Some of this is the fault of those of us in the world of sustainable business: we use too much jargon, providing opponents with a golden opportunity to mischaracterize—cynically—topics such as DEI and ESG to advance their own agendas. Addressing this, however, demands far more than simply seeking a “script doctor” for sustainability, or doubling down on arcane facts. The answer lies instead in a renewed effort to put people at the center of sustainable business. If we do not find ways to generate economic security and opportunity amidst massive technological, environmental, and social change, we can expect ongoing opposition to an agenda that will remain irrelevant at best, and dangerous at worst for many in the public. This will further stoke political blowback.

The year ahead will no doubt deliver questions we are not anticipating now. Over the last few years, we have experienced unexpected developments that seemed to flip the script for business and the wider world overnight. The pandemic was not predicted, and very few observers thought that sustainability would flourish once it hit, but that’s exactly what happened. With the new year only just underway, we have seen devastating wildfires turbocharged by climate change, more companies retreating from diversity efforts and content moderation, and renewed questions about the march of AI. These remind us of the urgency of our task.

At the same time, we also start the year with a good deal of focus on headwinds that have led to the so-called “sustainability recession.” These headwinds may obscure, though they do not erase, the underlying reasons why a more equitable economy that addresses planetary boundaries is so fundamental for innovative, thriving, and resilient companies, and to improve the lives and livelihoods of people and communities around the world.

Inevitably, there will be events that—for better or worse—provide a sharp reminder of that reality, and will catalyze a new sense of urgency. Will this happen in 2025, and if so, what and when? 

Blog | Thursday January 9, 2025

CSOs Are All Business: The Role of the CSO in a New Context

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Do the results of the U.S. election change the role of the Chief Sustainability Officer? Based on a new round of interviews with sustainability leaders, the collective answer is: somewhat, but not as significantly as you might expect.

BSR recently published a new report: The CSO at a Crossroads: Three Paths Forward for Sustainability Leaders. Based on interviews with more than 30 Chief Sustainability Officers (CSOs), we charted the evolution of the role and described three archetypes: The Steady Manager, the Integrated Strategist, and the Transformative Change Agent.

The results of the US election raised questions about how dramatically the landscape for business and sustainability might shift. To explore this, BSR spoke to over ten participants from the original study—along with ongoing conversations with members—to see whether the election changed their perspective about their role. 

Taken together, the interviews point to the resilience of the sustainability function and the business-savvy of sustainability leaders. This does not make the role easy; on the contrary, many CSOs feel their role and strategies are under heavy scrutiny, with reanimated arguments about the business case.

One CSO characterized their current role as “the defender-in-chief, speaking with C-suite executives almost every day” to retain commitments to company goals.

Yet multiple CSOs noted that they had already substantially adapted to address the backlash against sustainability. As one CSO declared: “It’s hard to say how I will change my day-to-day because I’ve already changed it.” Every CSO interviewed confirmed that the direction of the report, and the relevance of the three archetypes, still hold true, but they are now adapting to a changed political context.

CSOs will continue to emphasize business fundamentals such as regulations, business resilience, and performance

The CSOs we spoke with consistently pointed to foundational reasons why sustainability is critically important, citing the role of sustainability in compliance with global regulations, building business resilience, and creating positive impact on business performance.

For global companies, non-US markets are also essential. One CSO observed that their company “is more focused on EU and UK regulations—the outcome of the US elections has not really changed any of these priorities.” Another emphasized “a focus on metrics and numbers and business impacts. That hasn’t changed, and is the way to keep the work grounded.” The focus on business impacts may extend to highlighting the role sustainability can play in job creation and quality, such as through investments in new technology. That framing may hold appeal to executives as well as policymakers.

Commenting that there may have been “role creep” in recent years, one leader urged: “We need to give everyone a course on materiality 101 and get CSOs to be vigilant on what is material to their business. If they maintain that focus, then all we are talking about is business viability and profitability.” 

Companies will continue to show caution, especially on commitments and communications

At the same time, interview subjects anticipate a reduction of voluntary commitments and communications. “Communications around performance won’t change, but any additional communications will likely cease. We’re not looking for bold. We don’t want to be a target. We’re meeting what’s required by the law, but that’s it.”

Some executives may also be looking for an “excuse” to reduce resources and exposure on sustainability: “I’m worried about the skeptics using the election as a reason not to do voluntary things.” This concern is especially potent at companies where sustainability is less embedded.

CSOs expect uncertainty and risk in particular areas including DEI, geopolitics, the business operating environment, and employee protections

CSOs cited several areas of greater uncertainty and risk of negative impacts post-election, including:

• DEI: “DEI as DEI will change,” explained one leader. Companies are likely to pivot to a broader consideration of “inclusion” and “belonging,” putting existing DEI efforts (like employee resource groups) in jeopardy and potentially affecting hiring, retention, and development of diverse talent. They may also innovate with aspects of diversity that are not tied to race or gender, such as disability, neurodivergence, or economic mobility.
• Geopolitics, Supply Chains, and Trade: A potential global retreat from cooperation and open trade (exemplified but not exclusive to the US elections) threatens global action on climate change. It also imperils efforts to build more resilient and sustainable supply chains. There is also renewed concern that intergovernmental processes, such as COPs, will not succeed, imperiling progress and adding uncertainty.
• Focus on Industry-Specific Matters: Many of those interviewed said their business was much more focused on the industry-specific risks they expect from the new context, rather than broader attacks on sustainability issues. This will include uncertainty caused by deregulation, as well as product-specific attacks on a range of issues from vaccines to food ingredients to new technologies or renewable energy.
• Employee Protections and Benefits: Threatened rollbacks in areas like LGBTQ rights and reproductive rights, paired with aggressive action to restrict immigration and increase deportation, may create direct harms to employees and their families. Companies would then be forced into rapid response to help employees, retain trust, and respect human rights.

CSOs can leverage compliance, foresight, and expanded stakeholder engagement to build resilience and maintain impact

“Sustainability is not a four-year political term. We’re here for the long term. Every sustainability person is thinking about 2030 as well as 2040 and 2050.”

Our interviews don’t point to a major revision to BSR’s three archetypes for future CSOs, yet the incoming administration means that a key aspect of all sustainability leadership roles will be to defend against backsliding. The urgency, scale, and impact of current challenges will require CSO leadership to reassert ambition in strategic integration, innovation, and transformative change to create a just and sustainable world.

The interviews do point to three recommendations for CSOs to build resilience and maintain meaning and impact in their roles over the next four years:

1) Leverage compliance to achieve impact. Many global companies are now required to develop a double materiality assessment (CSRD), a robust approach to emissions tracking and climate risk management (California laws, ISSB, etc.), and human rights diligence (CSDDD). Compliance also requires professionalization and integration of sustainability to maintain appropriate governance, rigor, and investment—all of which serve as a bulwark to pull back. Moreover, companies are not obliged to “work to the rule,” and focus only on narrowly defined compliance; they can take a broader, more intentional approach to the spirit of the rules/laws. Compliance may define the “floor” for businesses, but it is not designed to establish the “ceiling.”

2) Prepare for uncertainty. For a wide range of reasons, including the US elections and economic, geopolitical, technological, and cultural volatility, companies will face many uncertainties in the years ahead. CSOs will benefit from futures thinking, simulations, and scenario analysis that illustrate and elevate the relevance of sustainability in understanding a changing world. Longer-term foresight is also a helpful way to put current headlines into the context of sustainability realities (like climate risk) and future “snapback.” A good place to start is BSR’s work on “Between Two Worlds: Sustainable Business in the Turbulent Transition.”

3) Reimagine stakeholder engagement. More effective stakeholder understanding and engagement can help companies better anticipate and navigate newly volatile topics such as health, geopolitics, political risk, and the links between sustainability and employment.

Employees will be an important stakeholder group, as many of the biggest risks of the coming years will show up for companies via employee impacts in areas like economic security and mobility, DEI, reproductive rights, and immigration. Companies will benefit from more internal stakeholder listening and relationship building, and advance preparation to respect human rights. Finally, the election results raised alarms that central tenets and language of the sustainable business movement may not be connecting with key audiences and intended beneficiaries. 

CSOs (and the field more broadly) may benefit by going to less “comfortable” settings and reaching out to stakeholders who feel left out of the movement. As one leader observed, “None of our sustainability slogans speak to how difficult it is to be middle class in America.”

“We need to reflect on how we talk about sustainability to get away from the jargon and go to topics that the average person will care more about. We’re talking to ourselves too much and we’ve missed the plot.”

BSR members can access new guidance in all of these areas in 2025.

While these tactics may not be sufficient to meet the urgency and scale of global challenges, they may help sustain and advance progress through a challenging period.

For amid the realism, uncertainty, and caution expressed by CSOs, we were once again struck by their determination, acuity, and optimism. 

CSOs continue to work every day to build coalitions that create stronger companies, thriving economies, and a just and sustainable world. As one CSO commented: “We can’t change society with just one political party—we need to win over bipartisan audience and figure out a way to bring people with us.”

Audio | Wednesday January 8, 2025

A Conversation with Darsh Myronidis, Group Director of Sustainability, Virgin

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Darshana Myronidis, Group Director of Sustainability at Virgin Group, chats with BSR Managing Director, Transformation Christine Diamente, and host David Stearns about of the evolution of her role at Virgin, strategies for embedding sustainability within a company, how to maintain momentum in the face of externalities developments like the recent outcome of the U.S. election, and where the greatest opportunities for significant progress lie.

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Darsh Myronidis

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Blog | Thursday December 19, 2024

A Launchpad for Action: Key Tech and Human Trafficking Priorities in 2025

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The third Tech Against Trafficking Summit, hosted by Amazon in London, convened over 160 anti-trafficking and tech leaders to identify priority action for leveraging technology to combat modern slavery and addressing its misuse.

Over the three-day program of policy roundtables, plenary sessions, workshops, and a dedicated tech day for NGOs, the discussions focused on three top-of-mind tracks for the anti-trafficking field. 

With insights gathered from human rights leads at global companies, suppliers, anti-trafficking NGOs, and experts with lived experience, here's what we learned about the key individual and collective priorities for business in 2025.

Key Priorities for 2025 

Supply chain data sharing on forced labor 

1) Streamlining forced labor data points collected by business: TAT consultations over the past year have highlighted that there is a lack of clarity about precise actual or proxy data points collected by business on forced labor. The ILO indicators offer a useful blueprint for business, but they remain imperfect with differences in how these are interpreted and integrated into businesses’ human rights due diligence tools. Too many data points by business are collected with limited understanding about their effectiveness and in a way that is extractive for information holders.

Through a multi-stakeholder convening in 2025, Tech Against Trafficking will look to streamline and consolidate list of forced labor data points in alignment with ILO indicators. A more focused set of data points aims to help business reduce the volume of information collected and requested from suppliers and enable a better tracking and measurement of improvement over time.

2) Bringing corporate suppliers into the conversation on the forced labor data ecosystem: Corporate suppliers are required by clients to provide data on forced labor via self-assessment questionnaires (SAQs), surveys and audits (desktop and on-site). Yet they are not always kept informed about how their data is used. 

In 2025, businesses with global supply chains have the opportunity to engage with selected corporate suppliers, including small and medium-sized enterprises (SMEs), to understand the challenges they face in collecting and sharing data points on forced labor and find opportunities to make the current system less extractive. 

Addressing trafficking on digital platforms 

3) Building effective information sharing platforms for identifying and disrupting trafficking networks. Secure platforms, forums, or mechanisms for sharing information, such as trends, data, patterns, and indicators, are needed to enhance business awareness of online harms and investigative capabilities. Collaborating with peer companies, law enforcement agencies, and financial institutions can facilitate the exchange of critical information and lead to more effective investigations. Further information gathered from individuals with lived experience and experts can bring additional perspectives. 

Through its dedicated workstream on online trafficking, Tech Against Trafficking will bring together leading tech companies to share practices and challenges, as well as information about emerging threats to address the misuse of technology platforms in a collaborative manner. 

4) Leverage technology to maximize impact, including via collaboration: While there are limited resources for companies and organizations to address online trafficking issues on their own, scaling up the use of advanced technologies, like machine learning, can enhance detection capabilities and streamline investigative efforts. Tech solutions deployed should account for and be calibrated to the rapidly evolving tactics employed by traffickers. Tech companies can also look to collaborate across sectors, such as financial services and child safety, to share insights, tools, and technologies. 

Tech innovations, AI, and human trafficking 

5) Engaging end users and lived experience experts in the design of anti-trafficking technology solutions: This includes lived experienced experts who can inform the design and deployment of tech tools. This is particularly critical to scale the potential of technology, prevent harms for those in situations of human trafficking (in terms of accuracy and bias of data), and ensure trauma-informed or victim-centered approaches. 

This effort can take a variety of forms, including the involvement of end-users in the design of technology solutions to ensure they are contextually relevant, as well as collaboration with survivor organizations. 

6) Building a culture of trust with end-users: Developers of anti-trafficking technologies should ensure transparent communication with stakeholders (especially end users) about technologies being used, including what they are, why and how they are being used, and how information processed through them will be managed. This will likely build trust in utilizing tech solutions and make such technology innovation effective. 

2025 will likely bring new opportunities in how tech is deployed to address human trafficking and forced labor globally, including how to inform corporate forced labor data collecting and sharing efforts. On the flipside, tech will also continue to present challenges in how online platforms are leveraged by traffickers. Addressing these six priorities is a good start for the broader anti-trafficking community to co-design context-specific anti-trafficking solutions and respond to changing tactics in a collaborative and effective manner. 

BSR is the secretariat of Tech Against Trafficking, a coalition of leading technology companies collaborating with global experts to help eradicate human trafficking and modern slavery using technology. Explore the TAT Summit's outcomes and for more details about how to join Tech Against Trafficking, contact the Tech Against Trafficking team. 

Insights+ | Tuesday December 17, 2024

From Commitments to Action: A Business Guide to Address Forced Labor Across Value Chains

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Case Studies | Wednesday December 11, 2024

Conducting a Double Materiality Assessment with a Financial Institution

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Introduction

Beyond Bank Australia (“Beyond Bank”) approached BSR to conduct a materiality assessment to proactively identify, assess, and prioritize the bank’s material environment, social, and governance (ESG) risks, opportunities, and impacts. As a customer-owned bank, Beyond Bank’s senior management was keen to undertake this exercise despite not being under mandatory regulatory pressure to do so. By opting for a double materiality assessment over a traditional perception-based materiality assessment, Beyond Bank demonstrated its long-term commitment to its customers by evaluating the impacts of material ESG issues on its enterprise value as well as its broader commitment to communities by holistically assessing the impacts of its operations and supply chain on society and the environment.

Background

Beyond Bank is one of the largest customer-owned banks in Australia. As a purpose-driven mutual bank, Beyond Bank aims to change the lives of its customers and communities through financial well-being. It also strives to reduce its environmental footprint by using resources efficiently, reducing consumption, and helping its customers and people to do the same.

The Challenge

The quick evolution of disclosure requirements, such as the European Union’s Corporate Sustainability Reporting Disclosure (CSRD)'s double materiality requirement, has accelerated the shift of stakeholder expectations for companies to adopt and disclose impact-based material issues. Despite not being within the jurisdictions in scope of these legislative disclosure requirements, Beyond Bank understood the importance of ensuring it is well-placed and ready to meet potential changes in the regulatory landscape.

Senior management at Beyond Bank recognized early on the benefits of completing a materiality assessment using a double materiality approach, which considers how sustainability topics influence a company's enterprise value (“financial materiality") and how the company's activities affect the environment and society (“impact materiality"). Even without the disclosure and reporting obligations a listed financial institution would be subject to, Beyond Bank was able to secure buy-in from the Board, management, and internal stakeholders involved based on the rationale and benefits that a double materiality assessment would confer to Beyond Bank.

Beyond Bank also sought to develop its internal/in-house capability to be equipped with the tools and know-how to independently conduct a double materiality assessment to ensure it remains agile and well-positioned to refresh the exercise after any significant business changes in future.

BSR’s Response

The entire exercise was a collaborative effort between BSR and the Beyond Bank sustainability team—from level-setting the Beyond Bank team with an ESG 101 training to walking through and partnering to complete the double materiality assessment process. The Beyond Bank team completed the internal stakeholder interviews, while BSR conducted interviews with external stakeholders and representatives from Beyond Bank’s Executive Team and Board.

As part of the assessment process, 35 internal stakeholders and 12 external stakeholders shared their perspectives across a broad range of material issues. Internal stakeholders included leaders and management teams across the country and the organization, ensuring both regional and functional representation. External stakeholders included customers, community group partners, suppliers, industry groups, rightsholders, and NGOs. In addition, a customer survey and internal employee survey gathered input from both key stakeholder groups on their ESG priorities, with over 2,000 customer responses and nearly 200 employee responses.

These conversations and consolidated input helped to inform and refine the definitions of risks and opportunities for each ESG topic within the Australian context, and ultimately the prioritization of material issues based on Beyond Bank’s unique operational model/activities and footprint.

Impact

This collaborative process helped to strengthen internal capability within the Beyond Bank team in relation to knowledge of ESG topics and its potential impacts, risks, and opportunities, as well as a greater sense of buy-in to the process and confidence in the outcome. Insights from meaningful conversations with both internal and external stakeholders also provided Beyond Bank with valuable information on strategic priorities going forward. Building on the outcome of this double materiality assessment, Beyond Bank is referencing the identified priority issues to inform the organization’s sustainability strategy, and it is also considering reporting on specific GRI and SASB indicators for priority material topics.

"We enjoyed partnering with [the] team at BSR Singapore, and the insights we gained with respect to our material ESG topics [were] extremely beneficial to our strategic planning processes. We also feel very well positioned for any future changes that may come to the sustainability reporting landscape in Australia.”

- Brooke Avory, Sustainability Manager, Beyond Bank Australia

Conclusion

Despite not being in scope of the CSRD, it is evident that the European Union is setting the bar and precedent when it comes to ESG reporting and disclosure requirements, and it can be reasonably expected that a wave of regulations is forthcoming across the different jurisdictions. The double materiality assessment will position Beyond Bank well to meet such potential changes in the regulatory landscape.

Companies will benefit from staying ahead of the curve and understanding where their ESG risks and opportunities lie. The outcome of the double materiality assessment provided Beyond Bank with data-driven insights on what ESG topics to prioritize, and it helped to inform its sustainability strategy in the longer term. Moreover, with the Beyond Bank team equipped with the know-how of conducting the double materiality assessment themselves, they are well-placed to refresh the exercise after any significant business changes in future.

Get in Touch

For more information on how BSR works with companies on sustainability management and strategy, please get in touch with BSR's Transformation Team.

Blog | Thursday December 5, 2024

Integrating Climate and Nature: A Dual Approach to Business Resilience

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In today's rapidly evolving business landscape, forward-thinking companies understand that addressing climate change and protecting nature are intrinsically linked. While the private sector has historically been focused on reducing greenhouse gas emissions, systems that work together in the natural world require similarly collaborative solutions.

This dual approach not only yields better environmental outcomes, but also creates more resilient business models. That means taking a clear-eyed view of the world, appreciating the interconnectedness of our systems, and grasping that climate change, biodiversity preservation, economic opportunity, community well-being, and human rights are deeply interconnected opportunities to address.

To date, the climate and nature agendas have been separated—to say nothing of societal considerations. Our institutions, global convenings (e.g., COPs), frameworks, guidelines, initiatives, and targets are siloed. And for the most part, so are the teams working on these critical initiatives within businesses.

Through careful planning, integrated strategies, and a commitment to combining goals, businesses can create lasting positive impacts while building more sustainable and resilient operations for the future. The need for a de-siloed approach is particularly evident after this year’s Biodiversity COP16 in Cali and Climate COP29 in Baku. 

Understanding the Climate and Nature Nexus 

Fragmented approaches to interconnected environmental challenges are counterproductive. Solving the climate crisis requires a holistic understanding of nature's critical role, and integrated strategies are the most productive way forward. 

Healthy ecosystems act as natural carbon sinks, while climate change accelerates biodiversity loss. Climate impacts disproportionately affect vulnerable communities, and transitioning to more durable economic models can displace traditional workers and harm local communities without careful planning.

Over half the world’s total GDP is moderately or highly dependent on nature and its services, with an estimated US$58 trillion exposed to nature-related risk. To make these numbers tangible, consider that 75 percent of global food crops rely on pollinators, 70 percent of cancer drugs are inspired by or based on nature, as well as traditional knowledge of Indigenous Peoples, and 72 percent of companies are highly dependent on at least one ecosystem service.

More and more, science shows us that nature-based solutions are fundamental to addressing the climate crisis alongside local community health and wellbeing. These solutions include restoring forests, protecting wetlands, and regenerating grasslands, which not only sequester significant amounts of carbon dioxide—potentially offsetting up to 37 percent of global emissions cost-effectively—but are also critical in protecting communities from disaster risk, preserving vulnerable coastlines and maintaining clean water for consumption and disease prevention. 

Considering any of these issues in isolation can make the risks and vulnerabilities worse through maladaptation. By addressing climate and nature together, businesses can create many positive impacts, optimize synergies, and avoid unintended consequences and inefficiencies that stem from focusing on one aspect alone. 

Simply put, climate and nature resilience is business resilience. 

Societal Considerations of Integrating Climate & Nature

Against this backdrop, there are fundamentally important principles for incorporating societal considerations. This means human rights considerations, including decent work, respect for Indigenous traditions, and ensuring environmental solutions don’t exacerbate societal inequalities.

Human rights approaches provide an essential roadmap for business action. Meaningful engagement with affected communities is a crucial pathway to maximizing these positive impacts and understanding the risks of damaging actions of climate and nature solutions.

Doing this well includes recognition of and commitment to upholding human rights, including Indigenous peoples' rights, assessing impacts on and including the voices of workers and local communities in decision-making, effective grievance mechanisms, and ongoing engagement for continuous dialogue. 

To ensure economic opportunity is created, it’s crucial to invest in skills training for new economic opportunities, develop targeted training programs and inclusive supply chains, establish fair compensation mechanisms, and support local capacity-building initiatives. 

How is BSR Helping Businesses Integrate Climate & Nature? 

At BSR, we are guiding our member companies in creating integrated climate and nature strategies that consider impacts on human livelihoods through assessments, reporting and disclosure, strategy development, stakeholder engagements, and collaborations. 

2025 Climate & Nature Engagement Opportunities for BSR Members

Looking Ahead

The integration of climate and nature strategies represents more than corporate sustainability—it defines business resilience for the future.

Companies that recognize and act on the interconnected nature of these challenges will be better positioned to thrive in an increasingly complex operating environment. By working with nature rather than against it, these approaches provide a holistic, multi-benefit approach to combating climate change while supporting ecological resilience and human well-being.

Success requires shifting from siloed thinking to integrated action. By embracing solutions that simultaneously address climate change, protect nature, and support communities, businesses can build truly resilient models that create lasting positive impacts.

The key to success lies not in viewing climate and nature as separate challenges but as interconnected aspects of a single journey.

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Lara Birkes

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Lara is responsible for leading BSR's Climate and Nature team globally and driving the organization’s work with Member companies' impact consulting, grants, and collaborative initiatives.  

Lara is a sustainability and policy professional with over fifteen years of experience managing partnerships, sustainability initiatives and policy engagement with companies, international organizations, governments, and NGOs.  

Prior to BSR, Lara was Global Head of Sustainability at Sonder, joining in 2020 to establish the corporate responsibility function, implementing policies to engrain responsible business practices across the company pre to post IPO. 

She also serves on the Advisory Board of EQX Biome, a start-up working to mobilize financial markets to protect the world’s remaining biodiversity hotspots. In 2024 Lara started hosting a web series & podcast called Nature IS to raise awareness of the critical need for protection, conservation, and regeneration of biodiversity.  

Lara holds a B.S. degree in International Business & Management from the University of Montana, a M.A. degree in International Trade Policy from the Middlebury Institute of International Studies in Monterey, California and is a World Economic Forum Global Leadership Fellow.  

Insights+ | Thursday November 21, 2024

Sustainable Business in Context: US Politics and Global Impacts

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