In 2025, global sustainable development is advancing unevenly amidst significant uncertainty. On one hand, overall progress continues on climate and sustainable development goals; on the other, deepening geopolitical rivalries, intensified industrial competition, and energy security concerns have led to pronounced divergence in policy priorities and implementation pathways across nations and regions. Against this backdrop, global sustainable development policies can no longer be simplistically categorized as either "tightening" or "loosening." For Chinese enterprises, discerning the direction of policy shifts and the underlying logic has become an unavoidable practical challenge in the international arena.
International cooperation in 2025 is characterized by a mix of progress and disagreement. COP30 and the G20 summit convened under immense global economic and geopolitical pressures, with nations striving to find common ground on climate governance and economic cooperation to keep global climate action moving forward despite challenges and divisions.
Held from November 10 to 22 in Belém, Brazil, COP30 was widely regarded as a pivotal conference marking the transition of global climate governance into an "implementation and execution" phase, coinciding with the tenth anniversary of the Paris Agreement. The conference culminated in the "Belém Package" of political outcomes, which reaffirmed the Paris Agreement as the core institutional framework for global climate governance and issued a political call to triple the scale of climate adaptation finance provided by developed to developing nations by 2035. Concurrently, the conference decided to promote the establishment of a just transition mechanism, emphasizing the need to balance social equity and employment impacts during the energy transition and industrial restructuring. However, the package failed to achieve consensus on a pathway for the phasedown of fossil fuels and on global deforestation governance. This outcome reflects, to some extent, the widening divergences among countries regarding the allocation of transition costs, responsibility sharing, and implementation pathways as global climate governance enters the execution phase.
The G20's twentieth summit, another critical forum for international cooperation, was held as scheduled in Johannesburg, Africa, despite complex international tensions and pressure, providing significant impetus for addressing current global governance dilemmas. The summit set a new record for attendance, with 42 countries and regional economic communities participating, including the highest-ever level of involvement from developing nations, fully demonstrating the shared willingness of the Global South to actively engage in international governance and promote multilateral cooperation. Centered on the theme of "Unity, Equality, Sustainability," the summit achieved a series of breakthrough consensuses and outcomes focused on four priority areas: disaster response and resilience building, debt sustainability, climate action and energy transition, and stability of critical mineral supply chains. These achievements not only address the core demands of developing countries but are also poised to have a profound impact on global development rules.
In February 2025, the European Commission introduced the "Omnibus I Package," which introduced simplifications and adjustments to regulations including the Corporate Sustainability Reporting Directive (CSRD), the Corporate Sustainability Due Diligence Directive (CSDDD), the EU Taxonomy, and the Carbon Border Adjustment Mechanism (CBAM). The aim was to reduce corporate compliance and administrative burdens and enhance the competitiveness of EU industries, without undermining the core objectives of climate and sustainable development. Consequently, several related regulations saw adjustments in 2025 regarding their scope of application, disclosure requirements, and implementation timelines:
The CSRD raised the reporting threshold to companies with 1,000 employees, exempting approximately 80% of previously in-scope companies from mandatory disclosure, while deferring disclosure obligations for some firms until 2028, among other changes.
The CSDDD postponed the compliance date for the first cohort of ultra-large enterprises, narrowed the focus of due diligence primarily to Tier-1 suppliers, and reduced the mandatory assessment frequency to once every five years.
The EU Taxonomy significantly simplified disclosure templates, reducing the number of required data points by approximately 70%.
The CBAM exempted small-scale EU importers with cumulative annual imports of less than 50 tonnes from CBAM obligations. This threshold is expected to exempt about 90% of EU importers while still capturing around 99% of the emissions covered by the mechanism.
On January 1, 2026, the CBAM formally enters its payment and compliance phase. Although the EU claims it aims to prevent "carbon leakage," its rule design—including setting significantly high default carbon intensity baseline values for Chinese products and plans to expand product coverage—has raised concerns from multiple parties, including China. For enterprises, CBAM is no longer merely a policy signal but a tangible compliance cost that is being realized; the earlier companies assess its impact and strategize their response, the greater the initiative they can seize.
In recent years, as ESG has entered the public domain, its development in the United States has exhibited high complexity and uncertainty. Unlike most countries that maintain a relatively consistent policy direction for sustainable development, the U.S. shows significant policy divergence and volatility on issues such as ESG investing, ESG disclosure legislation, climate change response, and DEI, heavily influenced by political maneuvering.
In 2025, federal-level ESG policy exhibited a clear retreat. In January, the Trump administration announced its withdrawal from the Paris Agreement for the second time, reversing the U.S. climate stance once more after initially withdrawing during his first term and the Biden administration's subsequent re-entry. Recently, the Trump administration announced its intention to withdraw from 66 international organizations involved in sustainable development areas such as climate change, clean energy, and gender equality. Domestically, in July, the Trump administration passed the "Big and Beautiful Act," which canceled multiple clean energy incentives, including prematurely terminating clean energy tax credits and eliminating tax rebates for electric vehicle purchases.
In contrast to the policy contraction at the federal level, state governments exhibited further divergence on ESG issues. Democrat-led states like California and New York continued to advance climate disclosure regulations and corporate climate accountability laws, strengthening climate action. Conversely, in Republican-led states like Florida and Texas, legislation explicitly restricted the application of ESG principles in public investments such as state pensions, opposing the use of non-financial factors like ESG in investment decisions.
This dynamic of "federal volatility and state-level divergence" has become a defining feature of U.S. ESG governance, significantly increasing the complexity for enterprises in navigating regional compliance and making investment decisions.
As a leading regional hub for commodity trading and green finance, and the first country in Southeast Asia to implement a carbon tax, Singapore is actively positioning itself as Asia's "carbon services and trading hub." Having implemented its International Carbon Credit (ICC) framework in January 2024, which allows companies to offset up to 5% of their taxable emissions by purchasing international carbon credits, Singapore laid the institutional groundwork for building a regional carbon trading hub, aiming to alleviate pressure on domestic firms from carbon tax increases.
Building on this, Singapore further strengthened its carbon market system in 2025 through multiple international collaborations. In June, Singapore, together with the UK and Kenya, spearheaded the establishment of the "Carbon Markets Development Alliance," aimed at developing unified guiding principles to enhance the integrity of voluntary carbon markets and provide clear baselines for corporate use of high-quality carbon credits. In September, Singapore signed a climate cooperation agreement with Vietnam to support the development of internationally aligned emission reduction projects in Vietnam, generating tradable carbon credits for transfer to Singapore. In November, Singapore's National Climate Change Secretariat, in collaboration with Gold Standard and Verra, released the "Article 6.2 Carbon Crediting Protocol" to assist governments in utilizing internationally recognized carbon credits to achieve their Nationally Determined Contributions (NDCs) and sustainable development goals. Through these measures, Singapore is systematically building a carbon services ecosystem encompassing policy frameworks, international cooperation, and standard-setting, steadily advancing its strategic goal of becoming Asia's carbon services and trading hub.
The goal of establishing Singapore as a carbon services and trading hub for Asia was explicitly stated in the "Singapore Green Plan 2030" released in 2021.
The year 2025 marks the first full year of "zero coal-fired power generation" for the entire UK electricity system. As the birthplace of the Industrial Revolution, the UK is entering a critical phase of systemic transition from fossil fuels to clean energy, laying the foundation for achieving its targets of "clean electricity by 2030" and "net zero emissions by 2050."
In May 2025, the UK Energy Act 2025 received formal approval and came into effect, establishing the state-owned energy company Great British Energy (GB Energy). This entity is tasked with investing in, promoting the development of, and participating in the operation of clean energy projects to drive decarbonization and enhance energy security. In June, the UK published its Solar Roadmap, committing to achieving a solar capacity target of 45-47 GW by 2030, with a focus on scaling up rooftop solar deployments across public sectors like schools and hospitals. Simultaneously, the UK is advancing reforms to its grid connection process, by clearing dormant connection queue spots and optimizing procedures to prioritize viable clean energy projects for accelerated grid access.
The milestone of the UK electricity system achieving its first full year without coal-fired power generation follows the closure of the country's last coal-fired power plant in 2024.
In 2025, international ESG-related organizations continued to incorporate feedback from corporate practice, revising standards and updating tools to enhance the practicality of sustainable disclosure frameworks.
The International Sustainability Standards Board (ISSB) issued targeted amendments to the greenhouse gas emission disclosure requirements within IFRS S2 (Climate-related Disclosures), addressing specific implementation challenges encountered by companies applying the standard. Concurrently, the ISSB released the "Jurisdictional Guide for Adopting ISSB Standards" to assist jurisdictions in planning their implementation roadmaps for ISSB standards.
The Global Reporting Initiative (GRI) released updated Climate (GRI 102) and Energy (GRI 103) disclosure standards, replacing the previous versions covering GHG emissions (GRI 305) and energy (GRI 302). GRI also initiated and advanced the revision of labor-related topic standards and launched consultations for several sector standards, including financial services and textiles & apparel, continuously refining its disclosure system.
The Science Based Targets initiative (SBTi) released a draft of its Corporate Net-Zero Standard 2.0 and conducted two rounds of public consultation. The draft introduces requirements for clarifying emission reduction pathways, detailing supply chain emissions management, addressing residual emissions, and implementing phased differential management. The 2.0 draft is expected to take effect from January 1, 2028. Furthermore, SBTi clarified that validated corporate targets must be reviewed, and updated if necessary, every five years to ensure alignment between corporate emission reduction commitments and actual progress.
Looking across 2025, global sustainable development policies are gradually shifting from a "vision stage" dominated by concepts and goals towards a reality shaped more by national strategic positioning and industrial competition.
In contrast, guided by its "1+N" policy framework for carbon peaking and neutrality, China has largely kept pace with the expected progress towards its 2030 NDC target for reducing carbon intensity. The continuous optimization of the energy structure, steady decline in energy consumption per unit of GDP, initial successes in industrial green transformation, and the gradual refinement of the ESG policy framework provide solid support for corporate low-carbon development. Meanwhile, differences in decarbonization pace, industrial support, and compliance requirements among different countries and regions internationally continue to widen. Policy uncertainty and complexity have become a constant that Chinese enterprises must confront when entering international markets.
For companies expanding overseas, relying solely on the rules of a single market or passively reacting to regulatory changes is no longer sufficient to support long-term operations. Building a compliance system that covers different regions, promptly identifying the policy priorities and compliance requirements of major markets, and maintaining operational stability across diverse political and regulatory environments are becoming fundamental capabilities for participating in international competition.
Overall, 2025 does not represent a retreat from sustainable development but rather a critical phase of pragmatic adjustment. For Chinese enterprises, it is essential to base efforts on domestic high-quality development requirements, continuously strengthen the foundations of carbon emission management, information disclosure, and compliance, while also extending their perspective to the evolving rules of major international markets. Embedding carbon management and ESG requirements earlier into business decisions and strategic layouts is crucial. Companies that can simultaneously enhance their compliance resilience, emission reduction capabilities, and data governance during this phase are more likely to mitigate the costs arising from uncertainty amidst domestic and international policy divergence and rule reshaping, thereby gradually accumulating structural advantages for medium-to-long-term competition.
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