Five Questions for Just and Sustainable Business in 2025
The year 2025 is a special year for math(s). This is the only year in the 21st century where the year is a perfect square (45 x 45 = 2025); it also provides this neat equation: (20 + 25)2 = 2025
Unfortunately, I am a business and human rights consultant and not a mathematician, so I am left to calculate what might happen this year in the messy field of just and sustainable business instead. While the answers will be far less precise than math(s) equations, here are five questions I will reflect upon this year.
How do companies address a multi-polar world? In the EU, we will see companies preparing for compliance with the EU Corporate Sustainability Due Diligence Directive (CS3D), publishing their first reports using the European Sustainability Reporting Standards (ESRS, under the CSRD), and contemplating an “omnibus simplification package.” In the US, by contrast, we will see a new administration take office with an agenda of attacking all things DEI and ESG. China may emerge as a global leader in climate change, but certainly not human rights. These developments create widely diverging signals for sustainability and human rights teams inside global companies, whose colleagues may simultaneously tell them that their agenda is both thriving and dead on arrival. These developments illustrate that the best strategies are based on enduring principles of responsible business and long-term sustainability challenges, not the latest political cycle.
Do companies pursue the spirit of the law or only comply with the letter of the law? While polarizing ESG and DEI debates will rage in the US, companies doing business in the EU will have to get on with the tactics of achieving compliance with new laws regulating just and sustainable business. However, as I have written elsewhere, it is too easy to dismiss compliance as a basic and binary requirement rather than exploring the many different ways compliance can be achieved in practice. A fundamental question remains around whether companies will pursue compliance with the “spirit of the law” (i.e., what the law seeks to achieve) or the “letter of the law” (i.e., what the law requires of companies). Both are important, but one of the top priorities for all of us working in the field of just and sustainable business must be to harness compliance in service of our vision of improved responsible business conduct; we miss a massive opportunity if compliance becomes an exercise in documenting business-as-usual.
What do the readers of company reports and assessments do with them? The EU Digital Services Act (DSA) only applies to a few of the world’s largest technology companies, but it provides a thought-provoking early window into how regulated due diligence and disclosure requirements may influence just and sustainable business. Late last year, designated companies (including Google, Meta, Amazon, Apple, and Microsoft) all published the results of systemic risk assessments, which are essentially EU-oriented mandatory human rights due diligence requirements for large technology companies. These reports are an audited summary of how these companies perceive their current efforts and were written not voluntarily but in response to regulatory requirements; during 2025, there will be plenty of opportunities for civil society, investors, and regulators to respond to these reports and pressure the companies for improved performance. Over time, this same dynamic will play out with the EU CSRD and CS3D.
Does the just and sustainable business community speak up or stay quiet in the US? Following the US presidential election results, I participated in several discussions with companies, investors, and civil society to debate how we should respond to Trump’s victory. Some led with the instinct to “keep our heads down” and carry on with the vital work of social justice, equity, and sustainability quietly and behind the scenes, waiting for the political winds to change over time and for the “anti-woke” agenda to run out of steam—or at least turn its malicious attention elsewhere. Others were more combative, emphasizing that now is the most important time to stand up for our just and sustainable business vision. I was struck by a Financial Times article exposing a $1bn effort to “crush liberal dominance” in corporate USA, reinforcing my view that we must emphasize and defend the essentials of our case for just and sustainable business. In our bubble, it is easy to get trapped in nuanced and complex debates about terminology, methodology, and process; however, when the fundamentals of our work are under attack, we must be strategic, forceful, and coordinated in our response. Costco just set a good example.
How do investors respond to this moment? I am in the just and sustainable business field for reasons of ethics and values, not enterprise value, competitiveness, or a “business case.” However, with our field being tested like never before, I have been struck by how often I emphasize investors' interest in companies addressing the risks and opportunities of just and sustainable business. This is especially true for large universal investors holding stakes in companies across the entire economy and for whom climate change, the rule of law, and respect for human rights are non-diversifiable risks that all companies must address. In one area of focus for me—artificial intelligence—investments will only be successful if new technology, products, and services are safe, fair, and trustworthy. How investors respond when these ideals are attacked will be a central variable during 2025.
The past decade has witnessed significant progress in just and sustainable business. Undoubtedly, global forces beyond the realm of any single company have shaped this progress, like the urgency of climate action and social justice. However, progress has also been due to the hard work, perseverance, and innovation of real people working inside companies, investors, and civil society. This work is never as neat and tidy as a mathematical equation and certainly doesn’t have a single endpoint; however, like math(s), it requires determination, problem-solving, and critical thinking.