· 3 min read
“Change is the only constant.” As 2025 unveils dramatic shifts in technology, the global economy, and geopolitics, this is the refrain of leaders worldwide. Business leaders in particular are noting a striking change in mood around sustainability. Much has been made this year of corporate sustainability “rollbacks”, relaxing sustainability reporting regulations, and “climate backtracking”. These shifts are very real, and yet, to make sense of what this context means for business, it is crucial to zoom out and examine the pace and nature of change in the years leading up to now.
Net zero transition metrics provide one clear lens through which to do this. Between 2019 and 2020, the percentage of global GDP covered by a net zero target tripled to reach almost 50%. By the end of 2024, a remarkable 92% of global GDP was covered by a net zero commitment. However, this fast-moving drive to corporate net zero was not all it seemed: less than 30% of net zero commitments met basic robustness criteria. Almost half did not include interim reporting targets or a reporting mechanism. Less than half included a published plan.
What, then, were we observing in the last five years? Two additional pieces of data add to the story. In tandem with the proliferation of net zero commitments, up to 90% of organizations surveyed in one 2024 review reported planning to increase their spend on sustainability in the next three years. However, a simultaneous survey suggested that much corporate sustainability spending would be directed towards reporting. In summary, corporate net zero claims proliferated quickly, often too quickly to be tied to meaningful changes in business strategy or capital allocation. Sustainability spending may have been on the rise, but with an emphasis on compliance and reporting over, for example, capital investments in game-changing technologies, processes, or materials.
“Mimetic isomorphism” is a term used by organization theorists to explain cases when one organization copies the structure or practices of another, in the absence of clear internal strategic drivers for their behavior. Put simply, it is mimicking, and it occurs because an organization becomes convinced that another’s structure or practices are beneficial or confer legitimacy. Mimetic isomorphism is most likely to occur when one or more of three key conditions are met: first, when an organization’s goals are unclear; second, in the face of external uncertainty; or third, when the organization seeks to gain legitimacy when the terms of legitimacy appear to be outside its control. Mimetic isomorphism is important because it highlights how organizations can be influenced by external pressures and the desire to conform to perceived successful models, even at the expense of innovation or original strategic efforts.
In the case of the momentum of corporate sustainability in the past five years, there is good reason to believe mimetic isomorphism has been at play. The drive for corporate net zero commitments has been empirically evident – the numbers themselves tell that story. And indeed, some companies have made real, strategic progress in this area. These companies will likely continue to do so because their efforts are tied to strategy. However, many corporate sustainability claims were not backed up with the resources or strategic plans required to make them credible. This suggests that “rollbacks” in this area are not quite as big a pivot as they may appear.
The core challenge – and opportunity – for business remains: to innovate to create sustainable value, for the long term. For businesses that lead with strategy, rather than out of compliance or copycatting, that opportunity to create value is still very much on the table.
This article is also published on Forbes. illuminem Voices is a democratic space presenting the thoughts and opinions of leading Sustainability & Energy writers, their opinions do not necessarily represent those of illuminem.
