I’ve been in business long enough to know when the fundamentals start to shift.
That’s what we’re seeing now with sustainability. Not as a slogan. Not as a side initiative. But as a structural force reshaping how companies operate, report, invest, and grow.
I’m not saying this to be dramatic. I’m saying it because the signals are clear. What used to be long-term planning is becoming a near-term expectation.
In 2023 global carbon pricing revenues reached a historic $104 billion, representing a dramatic escalation in the financial stakes of carbon management. This signified a tipping point.
Investors started asking tougher questions. Regulators set stricter rules. Markets started to price in carbon, waste, and risk.
It’s time to make a change now. But I understand that it’s a lot to take in, especially when your focus is on running the business day to day.
However, as leaders, we don’t get to ignore the context we’re operating in. We have to understand it. And we have to respond to it in a way that’s deliberate, not reactive.
I’m not asking you to jump on trends. But it’s important to be aware of what’s coming, and prepare well for it.
Because sustainability is no longer about optics. It’s about survival. Three global megatrends are rewriting the rules of business, and leaders who ignore them may not have a second chance.
Trend 1: The Expanding Reach of Carbon Pricing
When I speak with global industrial leaders, I see that the anxiety around carbon cost volatility is rising.
At a high level, it’s simple: if you emit carbon, you pay for it. Governments are putting a price on emissions through mechanisms like carbon taxes and emissions trading systems (ETS).
These tools create financial incentives to reduce pollution and invest in cleaner operations.
What matters to business leaders is how widespread this has become.
Right now, carbon pricing covers 24% of global emissions and touches over half of global GDP. As of 2025, there are 38 active ETS programs around the world, with 20 more in development.
Last year alone, these systems generated $104 billion in revenue, more than half of which is being used to fund climate and nature-related programs.
And this isn’t isolated to Europe anymore. India is actively designing its own carbon market. The U.S. has regional programs in place, and while there’s no national system yet, mechanisms like the EU’s Carbon Border Adjustment (CBAM) will directly affect any company that exports to Europe regardless of where it’s based.
Which means even businesses operating in countries without a carbon price are going to feel the cost. And soon.
This is why you can’t treat carbon as an externality anymore. It’s becoming a financial variable and you need to plan for it accordingly.
Trend 2: Escalating Demands for Sustainability Reporting and Transparency
I have seen another quiet shift happening in how companies report and how they’re evaluated.
What was once voluntary is now becoming mandatory. Around the world, regulators are setting new expectations for what businesses disclose.
It’s not just about financials anymore, but about sustainability performance, climate risk, and environmental impact.
In Europe, the Corporate Sustainability Reporting Directive (CSRD) is a prime example. Starting with the 2024 financial year, large companies are required to disclose detailed information on environmental and social risks.
That’s set to expand to nearly 50,000 companies. The timeline may shift for some groups, but the direction is clear: more businesses will be required to report, and the bar is rising.
In India, the Business Responsibility and Sustainability Reporting (BRSR) framework is already live for the top 1,000 listed companies. It includes 98 mandatory indicators, with additional leadership metrics for those looking to go further.
It’s also aligned with global frameworks like GRI and TCFD, and it reflects how fast India is moving on this front.
But it’s not just regulators driving this. Investors are leading the charge. Fund managers, analysts, and institutional buyers now expect ESG data to be part of a company’s valuation story.
Why? Because this data speaks directly to how a company manages risk, earns trust, and positions itself for the future.
Transparency isn’t just about compliance anymore. It’s become a proxy for credibility. A company that discloses clearly and consistently shows it’s in control of its story.
Trend 3: The Unwavering Net-Zero Imperative
I remember the time when business owners thought of net-zero as a distant target. Something for 2050 or beyond.
That’s no longer the case.
Today, net-zero is driving real decisions across supply chains, capital allocation, and operational strategy. Governments have set the tone. Investors are following fast. And companies that once made broad commitments are now being asked to show credible, science-based roadmaps.
Take India. We have committed to net-zero by 2070. But that’s not the only number that matters. By 2030, India aims to cut carbon intensity by 45%, reduce projected emissions by a billion tonnes, and generate 50% of its electricity from renewables. That’s just five years away.
Globally, the expectations are tightening. The Science Based Targets initiative (SBTi)—which many large companies use to validate their climate targets—now requires deep emission cuts in the short term.
Halving emissions by 2030. Reducing them by over 90% before 2050. Carbon removal can play a role, but only after emissions are cut to the maximum extent possible.
And the mechanisms behind this are becoming more structured. Article 6.4 of the Paris Agreement, which comes into force in 2025, will reshape how global carbon credits are traded.
And even though the USA has withdrawn from the Paris Agreement, the other 194 signatory countries will play a critical role in generating and trading carbon credits internationally. Even Non-Paris Agreement countries can still participate in carbon markets through bilateral agreements and private sector mechanisms.
This is especially relevant for companies using offsets as part of their strategy, as they’ll face more scrutiny on quality, transparency, and alignment with real impact.
The big takeaway?
Net-zero was once a branding statement. Now, it’s a performance metric. It’s influencing who gets funding, who gets contracts, and who earns the license to operate.
We’re past the point where vague promises will do. What’s needed now is precision: clear targets, verifiable progress, and real operational change.
None of These Trends Exist in Isolation
Carbon pricing, regulatory disclosure, and net-zero targets are part of the same shift. They reflect a new operating environment—one where sustainability is tied directly to cost, capital, compliance, and competitiveness.
And the pace is picking up. So, will you be ready when your business is affected? That’s the difference between reacting under pressure and making deliberate, confident moves ahead of the curve.
The goal should be to build resilience. Reducing exposure to future costs, while meeting rising expectations with clarity and substance.
I believe the companies that engage early, seriously and systematically, will be the ones driving the next phase of growth. Invariably because they would’ve had to make the right investments, build the right capabilities, and be proactive.
In my next article, I’ll explore what that looks like in practice. How businesses can navigate this shift with the right tools, data, and systems to make smart decisions in real time.
