Sustainability in Business: Latest Developments and Market Implications By Stratagem Partners

By Ankit Kumar Das, Senior Manager

Corporate Sustainability Accelerates Despite Regulatory Challenges

The sustainability landscape continues to evolve rapidly as major corporations advance climate initiatives despite mounting regulatory challenges. The past month has witnessed significant developments that signal deepening integration of sustainability into core business strategies across sectors.

Key Corporate Initiatives

Tata Motors and TCS launched an AI-driven sustainability platform on 30 October 2025, designed to enhance net-zero transition efforts and streamline ESG reporting practices. The “Prakriti” platform leverages TCS Intelligent Urban Exchange to automate ESG reporting and accelerate sustainability goals. This collaboration highlights the growing intersection between advanced technology and sustainability performance management.

Meanwhile, tension has emerged between corporate ambitions and regulatory frameworks. ExxonMobil CEO Darren Woods has warned that the EU’s Corporate Sustainability Due Diligence Directive could force the company to reconsider its European operations. The directive, which requires companies doing business in the EU to identify and address human rights and environmental risks across their supply chains, could impose fines of up to 5% of global revenue for non-compliance.

Investment Momentum Continues

Despite these challenges, financial commitments to sustainability projects remain strong. The EU Innovation Fund recently allocated €2.9 billion to 61 net-zero technology projects across 18 member states, as announced by the European Commission on 3 November 2025. These projects collectively have the potential to reduce CO2 emissions by over 200 million tonnes in their first decade of operation.

In the voluntary carbon market, significant capital continues to flow, with one firm securing $160 million in early finance specifically for Amazon REDD+ credits, demonstrating continued investor confidence in nature-based solutions.

Standards Harmonisation Advances

A major development in sustainability governance emerged on 30 October when the International Sustainability Standards Board (ISSB) announced the significant expansion of its ‘Global Passport’ framework. ISSB Chair Emmanuel Faber unveiled this initiative at the IFRS Sustainability Symposium in London, aimed at facilitating multilateral discussions among regulators to enable cross-border acceptance of sustainability reporting.

The framework will create mechanisms allowing jurisdictions to accept sustainability reports prepared under ISSB Standards while accommodating local requirements, potentially reducing compliance costs and reporting fragmentation for multinational corporations. Approximately 40 jurisdictions, representing roughly 40% of global capital markets, are now planning to integrate ISSB Standards into their national disclosure frameworks.

Adaptation Takes Centre Stage

As COP30 approaches, climate adaptation is increasingly positioned as essential rather than optional. The Global Center on Adaptation has called for a major breakthrough at the upcoming summit in Belém, Brazil, highlighting that adaptation finance remains significantly underfunded compared to mitigation efforts despite growing climate impacts.

Implications for Businesses

These developments underline several critical implications for organisations:

• First, despite polarised regulatory landscapes, most companies remain committed to sustainability programmes. Research indicates that over 70% of large global firms have maintained or strengthened their climate targets since 2023, with investment in decarbonisation growing by 18% last year.

• Second, the expansion of the ISSB’s Global Passport framework signals a move toward greater standardisation in sustainability reporting. Companies should prepare for more consistent disclosure requirements across markets, potentially reducing the compliance burden of operating internationally.

• Third, the EU’s continued investment in net-zero technologies through its Innovation Fund demonstrates that public financing remains a critical catalyst for private sector climate initiatives. Businesses should actively monitor funding opportunities that could accelerate their own sustainability transitions.

Looking Ahead: Emerging Trends

Several trends are likely to shape the sustainability landscape in the coming months:

1. AI-powered sustainability management: Following Tata Motors and TCS’s example, expect more companies to deploy artificial intelligence to streamline ESG reporting and identify operational efficiencies.

2. Regulatory divergence management: As jurisdictions implement sustainability regulations at different paces and with varying requirements, companies will need sophisticated compliance strategies to navigate this complexity.

3. Adaptation finance growth: With growing recognition of climate adaptation’s importance, expect increased investment flows toward climate resilience projects, particularly in vulnerable regions.

4. Supply chain transformation: The EU’s Corporate Sustainability Due Diligence Directive signals intensifying pressure on companies to address environmental and social impacts throughout their value chains.

5. Carbon removals scaling: As voluntary markets mature, expect increased focus on high-integrity carbon removal projects with robust measurement, reporting and verification protocols.

For businesses facing this rapidly evolving landscape, the message is clear: sustainability is no longer optional but essential for long-term competitiveness and resilience in global markets.