2025 is set to be a transformational year for sustainability practices with new global and local regulatory changes, technological advancements driving innovation, and a growing demand for transparency from organisations around their sustainability.
Climate change, resource scarcity, and social inequities are challenges that continuously shape the world around us, and corporate sustainability is rapidly growing as a key differentiator in an increasingly competitive marketplace.
It’s essential that businesses understand what the latest sustainability trends and key drivers in the market are, as it’ll help them assess their own sustainability practices and adapt to new challenges with a tailored approach.
1. The Importance of Measurement & Disclosure
‘If you can’t measure it, you can’t improve it’.
Accurately measuring an organisation’s sustainability is one of the core areas for businesses to focus on in 2025, as this will give a clearer profile of their actual social and environmental impact.
With businesses becoming ever more global, the size and complexity of organisational supply chains have increased dramatically.
This represents a challenge to measuring sustainability, requiring organisations to consider not just the sustainability of their direct operations but also those of their suppliers and other stakeholders throughout their organisational value chain.
For example, Scope 3 emissions – those that are generated outside of the direct control of the company – are estimated to constitute around 90% of an organisation’s total emissions profile on average (however, this can vary depending on the industry and company size).
Overcoming the challenge of accurately measuring sustainability requires organisations to invest in a robust data collection and management system to gather sustainability information from internal and external value chain stakeholders, tracking key sustainability metrics such as energy usage, carbon footprint, and waste.
For example, utilising key frameworks such as The GHG Protocol – the most widely used and internationally recognised greenhouse gas accounting standard – is a great start, as it will help organisations measure their greenhouse gas (GHG) emissions and set science-based targets for reducing them.
Having a robust sustainability measurement strategy in place will not only help organisations comply with strengthened ESG mandates and laws but will also help them:
- Track the progress and display the impact of their organisational sustainability efforts
- Help them communicate these effectively to stakeholders, regulators, and consumers
- Improve corporate resilience and brand image
Disclosure and Reporting
Disclosure and reporting on corporate sustainability has vastly increased in importance with the introduction of strengthened sustainability reporting legislation such as the Corporate Sustainability Reporting Directive (CSRD), Corporate Sustainability Due Diligence Directive (CSDDD), and the Green Claims Directive.
These pieces of legislation are largely a response to historically opaque sustainability reporting practices leading to misleading ‘green’ claims made by some organisations. A European Commission study in 2020 highlighted that 53.3% of environmental claims from organisations within the EU were found to be vague or unfounded, with 40% being unsubstantiated.
The CSRD for example, which entered into force on 5th January 2023, sets out strong rules for business sustainability reporting to ensure that investors can access data regarding an organisation’s sustainability and financial risks and promote investment in the most sustainable organisations.
Thoroughly understanding these new regulations will help organisations avoid hefty fines. Beyond compliance, the insights from the accurate measurement of sustainability can help prove an organisation’s green claims, avoiding ‘greenwashing’, and boosting brand appeal to an increasingly eco-conscious consumer base.
2. The Push Towards Circularity and Sustainable Sourcing
What is Circularity?
Circularity, and the circular economy by extension, is a principle and model of production that involves leasing, repairing, refurbishing, and recycling products and their materials for as long as possible – a shift away from the current ‘take, make, destroy’ model of production.
Through the EU Green Deal and the Circular Economy Action Plan (CEAP), the EU is legislating to increase circularity across the region, driven by several factors such as resource limitations and consumer attitude changes, to reach the goal of climate neutrality by 2050, tackling climate change, and limiting biodiversity loss.
For many businesses, this means sweeping changes. In order to comply with the various new regional laws under the EU Green Deal, many organisations will need to vastly increase their resource allocation and spending to meet compliance demands.
For example, manufacturers and retailers of industrial batteries need to comply with the enhanced Battery Regulation, adopted in July 2023, that aims to make certain types of batteries more sustainable and extend their lifecycle. The new regulation imposes strict due diligence, collection & takeback requirements, recycling standards, and the implementation of a Battery Passport.
The shift towards more circular business models isn’t without its benefits to businesses, through. Alongside regulatory compliance and avoiding hefty fines, embracing a circular business model can enhance customer trust, and improve brand perception and public image.
The reduced wastage of resources can also help to unlock operational efficiencies and build a more sustainable, resilient supply chain.
What is Sustainable Sourcing?
‘A company is only as sustainable as its supply chain.’
Recognising the importance of supply chains in the context of the circular economy, businesses are being encouraged to assess the sustainability credentials of their suppliers. Laws like the CSDDD focus on ensuring that a base level of sustainable sourcing is being implemented by the majority of large organisations.
Sustainable sourcing focuses on evaluating the supplier selection process and developing lasting relationships with suppliers that will ultimately help an organisation reach its sustainability goals.
This extends to environmental concerns, such as the ecological impact of raw material extraction, social responsibility, such as fair pay and conditions for factory workers, and building resilient supply chains.
While implementing sustainable sourcing as a goal may be challenging, its benefits abound. Naturally, it’ll reduce an organisation’s environmental impact as the suppliers they use will have proven the raw materials they provide are ethically sourced. This can have a positive impact on corporate image amongst the rest of the organisation’s value chain stakeholders.
Sustainable sourcing also reduces the exposure of an organisation’s supply chain to unnecessary risk. If the correct vetting of suppliers is not undertaken, it’s possible that they may get audited and found to have extremely poor environmental practices or subpar working conditions.
This could result in them being shut down and leave a sudden and substantial gap within the supply chain which can severely disrupt operations.
3. The Role of Digital Product Passports
One key innovation that has the potential to influence both the previous trends and the wider push for sustainability and a circular economy is Digital Product Passports.
Digital Product Passports (DPPs) are a tool for sharing all manner of product lifecycle and sustainability data with stakeholders throughout an organisation’s value chain. Accessible via a data carrier such as a QR code or RFID tag, DPPs provide a wealth of product data, including but not limited to:
- Raw Material Composition
- End of Life Instructions
- Instructions for Remanufacturing
- Sustainability/Carbon Footprint
- Recyclability
- Water Usage
- Overview of Harmful Materials
- Warranties
Democratising access to this data helps to foster collaboration between disparate supply chain stakeholders, empower sustainable customer and investor decision-making, and help businesses prove their sustainability claims to external auditors – allowing them to comply with legislation such as the CSRD and solidify brand reputation.
The driving force behind the adoption of Digital Product Passports (DPPs) is the Ecodesign for Sustainable Products Regulation (ESPR) which sets ecodesign requirements for products manufactured or sold within the EU, aiming to create a sustainability standard for physical products.
The ESPR came into force on 18th July 2024, mandating that Digital Product Passports must be attached to products across a wide range of industries, from Textiles to Manufacturing, Electronics, Batteries and beyond.
Beyond compliance with the ESPR, there are several benefits for organisations in implementing Digital Product Passports.
Product Lifecycle Management & Provable Green Claims
Many organisations have already invested in PLM and LCA solutions to track the lifecycle of their products.
However, the reliability of these systems is often questionable due to incomplete or outdated data, as well as a lack of consistent, granular reporting across disparate supply chains. This can lead to inaccurate sustainability reporting to regulators and organisations making green claims backed by unreliable data.
DPPs can integrate with these systems and provide a wealth of new data points and real-time insights into the lifecycle of each product. Implementing Digital Product Passports means assessing your organisation’s current data management strategy, identifying gaps, and ensuring access to accurate product sustainability data.
This enhanced data collection and management records key events from each product’s lifecycle, including repairs, maintenance and upgrades, as well as end-of-life and disposal events. This helps to build out an accurate product history and sustainability profile, as well as enable more efficient remanufacturing and circularity processes.
Additionally, for products to be compliant with the ESPR, the data contained within their DPPs must be accurate and verifiable. This requires organisations to thoroughly evaluate the data quality from their upstream value chain partners.
This data quality control throughout the value chain will help organisations more accurately assess the sustainability of their products, from the ethics of their raw material extraction to their manufacturing processes. Ultimately, this will help ensure that green claims made by these organisations are both substantiated and provable.
Augmenting the Customer Experience
DPPs also cater for the most crucial stakeholder in the value chain – the consumer. They provide unprecedented access to increasingly eco-conscious consumers who rate corporate sustainability highly within their purchasing rationale.
DPPs can provide them with a comprehensive environmental impact profile for their potential purchases, enabling the consumer to compare similar products to find the one with the least environmental impact.
When it comes to increasing circularity among consumers, DPPs can contain product-specific recycling information, reuse instructions and other pieces of information that help consumers get the most usage out of their product before they discard it.
For products that have resale value on second-hand marketplaces such as luxury goods, DPPs can contain ownership records and digital certificates that prove authenticity. DPPs can securely store and provide access to support documentation such as warranties, guarantees, and insurance.
Brands can even use DPPs as a new communication channel to connect with customers. When a customer accesses their product’s DPP, whether to find its warranty information or check its carbon footprint, they’re engaging with your brand.
This potentially creates usage data you can utilise to enhance your customer services. You can even proactively design the user interface of the DPP and utilise this direct communication channel to offer incentives to make further purchases like loyalty reward schemes, special offers, and discounts.
Conclusion
As the world moves towards building a circular economy and advances sustainability to reduce the environmental and social impact of consumption, we’ve noted 3 emerging sustainability trends for 2025.
Firstly, the importance of measurement and disclosure of sustainability data in an ever more complex business and regulatory environment. Secondly, the push towards circularity and sustainable sourcing to bring about a shift towards sustainable production across the board.
Finally, how Digital Product Passports can help support both of those aims and create a basis for sharing sustainability data on an unprecedented scale, as well as promoting eco-friendly consumption and augmenting the customer experience.
If your organisation would like to gain a competitive advantage, comply with the latest sustainability regulations, and align with circular economy principles, it’s time to start building your Digital Product Passport strategy.