Sustainability is at a tipping point. Last year was the hottest on record, and the stakes have never been higher. And as the urgency intensifies, so do the rules of the game. Here’s a look at the key forces shaping the sustainability strategy and reporting landscape this year.
2024 saw global temperatures cross the Paris Agreement threshold for the first time, 1.5°C above pre-industrial levels. We are already seeing the impacts – most recently shown by the ruthless wildfires in LA. At the same time, the macroeconomic environment puts topics such as competitiveness, security and sovereignty highest on the agenda and voices are being raised to maintain the status quo, e.g., Trump’s vows to support the fossil fuel industry.
However, there are multiple developments towards a sustainable future. Renewable energy is being built out at a record pace. Energy flexibility solutions are in full development. AI empowered sustainability applications are evolving rapidly (e.g., lightweight materials, biotech discoveries). Many of these solutions are even expected to further accelerate, as they are also key parts of the sovereignty and security agenda, by reducing international dependency on energy and materials.
Within equality we have recently seen a DEI program discontinuation trend in the US, e.g., followed by Amazon and Meta. However, we have also seen influential companies such as Apple and Costco take a firm stand against this trend. The coming year will most likely spark a hot debate on how to best uphold DEI in the corporate world.

These developments underpin our impact investment strategy – contributing to the urgent need for a sustainable and equal future by investing in outperforming impact solutions. As we continue to drive meaningful change through our investments, it’s essential to remain agile in a rapidly evolving regulatory landscape. With the new U.S. administration cracking down on regulations, all eyes are on the EU—will it follow suit with an anti-regulatory wave? While the response unfolds, it’s crucial not to lose sight of what’s already in motion. Here are the key trends currently shaping sustainability strategy and reporting in 2025:
- CSRD raises the bar for sustainability reporting. The Corporate Sustainability Reporting Directive (CSRD) requires large EU companies to report on sustainability indicators from the financial year 2024, with likely ripple effects also on companies not yet in scope. We already see many early-stage startups aligning their sustainability efforts with the CSRD, e.g., performing a double-materiality assessment (assessing sustainability indicators likely to have a material impact on both the financial performance as well as on people and the planet). This will likely also increase the reporting of sustainability indicators beyond carbon, given that the CSRD includes a broader set of sustainability impacts.
- Increased requirements on responsible AI development. How to assess and mitigate adverse AI risks is a key topic for us investors, as the long-term viability of AI solutions hinges on carefully identifying and mitigating the key risks. In 2025, this will be further underpinned by the first parts of the EU AI Act coming into force, e.g., requirements on transparency, copyright and risk assessment for new general-purpose AI models.
- Emerging simplification and harmonisation of sustainability reporting. The EU has mentioned a potential ‘omnibus regulation’ to simplify and harmonise sustainability reporting in key directives such as the CSRD, the Corporate Sustainability Due Diligence Directive (CSDDD) and the EU taxonomy. Also, we see LP investors coming together and simplifying and harmonising the type and format of reporting that they require from VCs.
- Increased focus on supply chain due diligence. There is a clear uptick in startups seeking support in setting up supply chain due diligence processes, mostly driven by the German Supply Chain Due Diligence Act. This will likely increase even more with countries adopting the CSDDD in regulation – an EU directive similar to the German act mandating large companies to set in place a sustainability due diligence that needs to be adopted by member states by July 2026, applicable to the companies a year after. This will have effects across the supply chain as suppliers need to present documentation required by the large companies.
- New categorisations of sustainability funds. The EU is expected to publish a review of the Sustainable Finance Disclosures Regulation (SFDR) in early 2025. This is expected to change the labelling of impact funds and divide them into ‘sustainable’ and ‘transitional’ amongst other things. This means adding a category for transitional investments, which are aligned with the net-zero transition, but does not yet fulfil the EU’s sustainability definition, e.g., a solution with the industry best CO2 footprint where there is no feasible near-zero CO2 solution yet.
Fanny Widepalm,
Impact Lead