.svg.webp)
What you'll learn
Transcript:
SAIF: Welcome to another episode of the State of Sustainability. I'm your host Saif Hameed. In this episode, I'm going to do my personal wrap-up of what I saw over 2025 and my predictions — or hot takes — on what I'm expecting over the course of 2026. I know there are a lot of versions of this out there, so this is going to be my views, not the view of my organisation or any other organisation, and also not the general stuff you might find on LinkedIn, on the web, or if you ask your LLM of choice. I'm going to try and give you a nuanced, slightly edgy, slightly personalised view reflecting the conversations I'm part of and the circles I draw my insights from. I hope you enjoy it.
2025: What I Saw
I'm going to start with what I saw over the course of 2025. We sort of predicted or expected some of this at the start of the year, and some of it was maybe more pronounced than anticipated.
Organisational overhaul of sustainability teams. I'm seeing this both at the function level and at the team level. At the function level, in multiple cases we've seen entire sustainability functions move to sit under different functions. One of the biggest examples was Unilever, where a large chunk of the sustainability function moved towards procurement. That's a familiar path I'm seeing across many other businesses — sustainability getting tucked in under procurement. That tends to be the model at businesses that are maybe a little larger — by larger I mean more than a few billion dollars in revenue — and a little more environmentally exposed. In other businesses, I'm seeing sustainability get tucked in under the general counsel or the legal team, because sustainability ends up being more of a compliance topic there, versus a supply chain resilience topic in larger or more environmentally exposed businesses. I'm seeing a bifurcation in sustainability use cases: those that are more reporting-oriented — CSRD compliance, the new California regulations, SEC requirements — are moving under finance teams, dovetailing with existing financial infrastructure like financial controllers and budgeting processes, which have absorbed a lot of that compliance-related ESG workload. The stuff that ends up being more Scope 3 and voluntary-target related is moving more likely under procurement, because it ends up being a supply chain risk topic.
The decline of the Chief Sustainability Officer. CSOs came into fashion very quickly. Pre-2018, you'd have been hard-pressed to find more than 6 or 7% of Fortune 500 companies with a proper CSO — meaning a C-suite role reporting into the CEO. That number mushroomed over the early 2020s, and I'm now seeing it take a massive step back. Many CSOs I see and know are C-suite in name only and actually report into a different member of the executive team. I'm seeing a general demotion of the CSO role. Teams overall have become a little smaller — most sustainability functions I'm aware of have seen colleagues made redundant over the course of 2025, and it's no longer the open season on sustainability hiring I was certainly seeing in the early 2020s.
Elevated expectations for those who remain. Those who are entry level — meaning maybe a few years of experience — are facing a demand for much harder technical skills. Go back a few years and you had sustainability analyst roles that were fairly generalist, where sustainability affinity and a relevant internship was enough. I'm seeing a lot of that on the decline, and a demand instead for harder technical roles: LCA work, having run supply chain programmes, sustainability-oriented buyers, data scientists, something more quantitative. At the mid level — directors, senior managers — I'm seeing a push towards these individuals owning much more of the problem set. It's now quite common for senior sustainability leaders in my network to have been told their responsibilities have doubled or even tripled. If they were running a region, they're now running global — same title, same pay. If they were running just environment, they're now running environment and social. More is being expected of those who remain.
Programme consolidation. I started seeing this really at the start of 2025 and it played out all across the year. Contrast to the early 2020s, when it was not uncommon to find businesses targeting more than a dozen sustainability metrics. The peak I talk about is a business at around $8–9 billion in revenue targeting 218 different ESG metrics. That has more or less disappeared over the course of 2025. What I'm seeing now is the C-suite telling the sustainability function: you get three metrics — and really that means you get one metric and a couple of maybes. The one metric is typically carbon. Number two and three may be some combination of water, single-use packaging, or nature. But it's carbon first, and then quite a long distance to the next one, because carbon is the most heavily regulated right now. That's not entirely a bad thing — it tends to mean that the initiatives going ahead have more focus, more impact, and fewer pilots running in parallel. Unilever was one of the early movers on this: they got a lot of grief a couple of years ago for what looked like a big public step back from many commitments, but from what I could tell, the focus was shifting from talking about many things to doing a few things really well — even if the targets were lower, they were more likely to be achieved.
Methodological advancement. Whether you were keeping an eye out for SBTi, the Greenhouse Gas Protocol, the VCMI, or whatever the latest acronym within the offset space — there were developments, changes, movement. I don't think everyone was always happy with the movement, but there was definitely development. One trend I'd noticed taking shape in 2023 and continuing all the way through to the end of 2025 is the movement towards more granularity and accuracy in Scope 3. That meant moving from spend-based to activity-based data. Where activity-based emissions calculations used to be the gold standard in 2024, in 2025 this became more table stakes — and the new gold standard became refining those with supplier-specific emissions factors or product carbon footprints. I expect that to become more table stakes over the course of 2026.
So that's the rundown of 2025: the organisational shift of where the sustainability function sits, the shift in expectations of those within it, the consolidation of metrics and programmes, advancements in methodologies, and a shift in what good looks like in terms of emissions calculations.
[Sponsor break – Altruistiq]
2026: What to Watch
I've been playing around with drafting these predictions. I put in my own thoughts and then used a range of different LLMs — I was using Gemini as a sparring partner for some of my insights. I ended up discarding all the suggestions Gemini gave me, but what Gemini did tell me is that my outlook for 2026 is a cynical one. It even labelled it "the cynical view on 2026." So take this with a pinch of salt — this is a somewhat cynical, somewhat sceptical view on how the year plays out. But I think it has the benefit of being realistic.
Continued pain in the sustainability space. I'm seeing a lot of chatter on LinkedIn about how the great sustainability freeze is over, budgets have been unlocked, and everyone is now spending loads of money on sustainability. I actually think the sustainability slowdown has another year or so to go before it bottoms out. I'm expecting 2026 to be a subdued year. I'm expecting green hushing to continue — teams talking less about what they're doing, companies talking less about what they're achieving. I'm expecting the momentum towards reducing budgets, reducing incremental initiatives, and limiting team growth to continue through the year. There's a decent chance some of that shifts over the course of 2027 — I think there's a lag time on US policy shifts, and as we start to get perhaps a shift in the US midterms where the House and Senate potentially change hands, that might trigger a difference in the posture the US takes on climate, sustainability, and ESG-related topics. But even if it does, there's going to be a lag of at least several months before that drives any impact that sustainability professionals in business might see. We'll be well into 2027 before that takes shape. One might argue that US policy won't drive that much, and whatever happens is already baked. But I don't think that's true — what the US has demonstrated over 2025 is that it's happy to weaponise anti-ESG sentiment towards a harder negotiating position with the EU, pushing for a watering down of sustainability-related regulations. That risk continues, and the only chance it starts to shift is with some kind of change in US policy posture globally.
Product carbon footprints become table stakes. I think PCFs and supplier-specific emissions factors are going to start becoming standard within business — in pharma, food, consumer goods, and packaging. I think PCFs will be used for three purposes: first, woven into Scope 3 calculations to refine generalised emissions factors; second, incorporated into product claims shared onwards — a food business sharing with a retailer, a packaging company sharing with a CPG brand; and third, increasingly incorporated into procurement decisions. There's a myth that this will drive massive premiums or discounts. I don't think there's going to be that much movement of dollars. I see both arguments — that sustainable products need to be cheaper, or that people will pay more for them — and I think neither is really true. I think it'll be a nice competitive advantage in a tender process. If you're a brand looking for a new packaging supplier and you get two bidders at similar quality and price, you'll likely go with the more sustainable player. Or you'll use it as a bargaining chip to get the other seller to improve their offer, whether on price or sustainability. That's where it starts — and it's actually quite a big shift from where we were three or four years ago, where all buying activity was focused on cash, cost, quality, and timing, with a long ESG checklist bolted on the side.
Emissions factors become commoditised. As emissions factors give way to supplier-specific factors and product carbon footprints, and as AI reduces the cost of generating new data points, the moats that existed around emissions factor databases a few years ago are going to disappear. Most of those deep in the sustainability data world are already recognising that.
Little movement on metrics outside of carbon. This is one area where Gemini and I disagreed. Gemini initially suggested that nature and water would both be on the field in a significant way. I challenged that — I think nature is going to be window dressing. I don't think we're going to see major progress there in 2026. Gemini conceded on nature but countered on water, arguing it's closely tied to resilience and operational risk — if you're a beverage company, water availability is an operational topic, and the data you need for water often comes out of the same processes as your emissions and CSRD work anyway. Fair point. But when I speak with companies behind closed doors — even in the beverage space — what I hear is that water may end up being the casualty: it's in the top three topics, but it's not the first, and therefore it may get cut. I expect little movement outside of carbon over the course of this year. I hope I'm wrong.
Continued retrenchment of targets. We're getting closer to 2030, and your 2030 target is already more or less cooked by 2028 — or by 2027 in sectors like agriculture where it takes three years to move anything. Most businesses that were honest with themselves realised a year or two ago they weren't going to hit their targets. I think probably around 5% of climate targets ever set were realistic at the time they were set — I should note that is a completely made-up number, what we used to call at McKinsey a "Puma stat." Most targets were aspirational, and those chickens are coming home to roost. I'm seeing an increased focus among the Fortune 500 businesses we work with on modelling different scenarios, different glide paths, building up initiative roadmaps and stage-gating them — which is absolutely the right direction. But where that analysis invariably leads is to the understanding that the original targets are unachievable. I think we'll only really have shaken all of that out by maybe 2029. The stragglers who don't bother will just flunk their targets and quietly slip away.
A massive vendor shakeout. For those who have loathed being surrounded by vendors every time you step off a panel — this one might give you a little schadenfreude. I think a significant percentage of the ecosystem of sustainability software, data, and service providers is in a process of either going bust or looking for someone to do a mercy acquisition. A few weeks ago I decided to look into the P&Ls of various sustainability consultancies in the UK — the UK forces all mid-size businesses or larger to publicly disclose their financials on Companies House, which is free for anyone who wants to look up their competitors. After perusing those P&Ls, I was genuinely surprised and shocked by the scale of declining revenues, massive losses, and restructuring — and this is true for the three or four largest sustainability consultancies I could think of in the UK. I'm sure it's the same across Europe and North America. Most software players are too small to disclose this kind of information, but anecdotally, in our market there are about 80 software companies and about 75 of them are for sale, and the other five aren't buying. I'd expect the data landscape to be similar. This vendor shakeout is going to be disruptive for many of you who rely on these services and have built close relationships with consultants or software providers. There's going to be pain and grief on all sides as those relationships come under pressure.
A Note of Optimism
If I try to find a positive in what I'm expecting for 2026 — I actually think we're going to make pretty decent progress on sustainability. What we're really seeing is a reconciliation between the expectations of 2022 and 2023 versus what reality has turned out to be. But reality is still, most likely, better than it ever was from a progress perspective. I'm seeing more actual work being done, more stuff being done at scale, more stuff delivering real value, more emissions reductions, more carefully thought-through choices on what a business should buy, make, sell, and how it should position itself. The energy transition is still going pretty strong in all the places where it matters — whether it's mobility, electrification, or beyond. There's a lot to be excited about, not just short-term, but particularly medium and long-term. I think we're still all going to end up dealing with far worse than 1.5° or 2° of warming. But I think we're still making massive progress versus where we were when I entered the corporate sustainability space about ten years ago.
I hope that cheers you up and revs you up and makes you ready for the year ahead.
Thanks for listening to this edition of the State of Sustainability podcast. Follow the podcast so you never miss an episode. If you like the episode, please do leave us a review and recommend it to a friend — we really appreciate all the support you can give us as we try to grow our community of listeners.
.png)
