In October 2025, the Organization for Economic Co-operation and Development (OECD) released its annual review of global corporate sustainability reporting practices. Over the past two years, sustainability-related disclosure has expanded further, rising from 86% of global market capitalization in 2022 to 91% in 2024. However, the absolute number of companies disclosing sustainability information – 12,900 – remains only a moderate share of the 44,152 listed companies worldwide, suggesting there is still a need for global convergence and harmonization. In China, Developed Asia-Pacific excl. the U.S., Emerging and Developing Asia excl. China, and the Middle East and Africa, disclosure by market capitalization rose by 7 percentage points. Of course, it will be interesting to monitor how this trend evolves in 2025, particularly in the U.S.
Globally, 582 companies use the International Sustainability Standards Board (ISSB) standards, either stating a partial alignment, or asserting compliance, still well below the number of companies using the TCFD recommendations (4,857) or SASB Standards (3,497), which provided the foundations for the ISSB’s Standards.
Between 2022 and 2024, assurance practices expanded, with coverage increasing from 66% of global market capitalization to 81%. Assurance is common even in jurisdictions where it is not required or recommended, such as the People’s Republic of China (19% of companies, 51% of market capitalization) and the United States (39% and 83%). Limited assurance remains considerably more widespread (56%) than reasonable assurance (17%). In this context, the adoption of the International Standard on Sustainability Assurance (ISSA) 5000, finalized in November 2024, is timely.
According to OECD research, an analysis of the sustainability risks that companies are facing according to the SASB Sustainable Industry Classification System (“SASB mapping”) shows that climate change is a financially material risk for listed companies that account for 65% of global market capitalization. Their findings suggest that human capital risks are currently the most important sustainability risk with companies representing 68% facing such risks as financially material. In the United States, this share is even higher, where companies representing 76% of market capitalization are considered to face human capital risks as financially material.
Globally, companies representing 41% of total market capitalization are considered to face data security and customer privacy as financially material factors (the third most important risk globally). In the United States, companies representing 49% of market capitalization are considered to face data security and customer privacy as a financially material risk.
Global outlook: The increasing number of sustainability reporting standards with varying approaches has led to efforts to improve the interoperability of standards, as regulators and standard setters seek to streamline reporting obligations and enhance global comparability. In June 2025, GRI and the IFRS Foundation published a joint statement clarifying how GRI 102: Climate Change 2025 and IFRS S2 can be used together and considered equivalent. On GHG emissions, equivalence is deemed fulfilled when companies that report Scope 1, 2, and 3 emissions under IFRS S2, in line with the Greenhouse Gas Protocol, use those same disclosures to satisfy the relevant GRI 102 requirements.
Europe: Under the recently revised Corporate Sustainability Reporting Directive (CSRD), large, listed companies are applying ESRS for the first time in 2025, with other companies to phase them in from 2028 onwards. All eyes are now on the European Parliament as it finalizes its negotiating position on the omnibus proposal continues. On 13 November 2025, the European Parliament adopted its negotiating position on simplifying companies’ sustainability reporting and due diligence obligations. Notably, only companies employing an average of 1,750 employees and generating more than EUR 450 million in net turnover will remain within the scope of the CRSD regulation.
Canada: The Canadian Sustainability Standards Board (CSSB) standards are currently effective for voluntary adoption for fiscal years beginning on or after January 1, 2025. Provincial and territorial regulators, as well as the Canadian Securities Administrators (CSA), are monitoring the situation and could eventually mandate these standards for public companies.
U.S.: As of October 2025, the outlook for U.S. sustainability disclosure regulation is highly uncertain due to legal and political challenges at the federal level, while state-level regulations, particularly in California, are advancing despite implementation delays. The SEC's climate disclosure rule is effectively paused following the commission's decision not to defend it in court, and California's climate disclosure final rulemaking on SB 261 is being delayed with final regulations now expected after the January 9 court hearing scheduled by the U.S. Court of Appeals.
China: In 2025, China consolidated its position as the world’s largest investor in clean energy, counterbalancing the sharp retreat of U.S. green spending. Domestic investment remained massive, with over 1.97 trillion yuan (USD 270 billion) poured into key energy projects in the first eight months alone, marking an 18% increase (yoy). Renewable installations surged: 310 GW of new capacity was added in the first three quarters, bringing total renewable capacity to nearly 2,200 GW, or 59% of China’s power generation base. Grid modernization and storage were also priorities, with USD 88 billion invested in transmission and distribution, and battery storage spending up 69% compared to 2024.
Emerging Themes: In nature-relatedreporting, the Taskforce on Nature-related Financial Disclosures (TNFD) and the GRI have jointly produced an interoperability mapping where GRI standards support TNFD recommendations and metrics, helping users understand overlaps and identify any additional disclosures needed to meet TNFD expectations. On November 7, 2025, the IFRS Foundation announced the decision by the International Sustainability Standards Board (ISSB) to move into a standard-setting process on nature-related risks and opportunities, drawing on the disclosure recommendations, metrics, and guidance of the TNFD.
Reporting human rights-related information has become an emerging aspect of corporate sustainability disclosure. In the past decade, various jurisdictions have introduced policies and legislation that require entities to disclose human rights information. Globally, companies representing 81% of market capitalization (17% of listed companies) disclose having a human rights policy. A higher share (85% of global market capitalization) report having a specific forced or child labour policy, and a lower share (62%) report having a policy on freedom of association.
The landscape of sustainable finance is evolving rapidly, with resilience and biodiversity emerging as central themes in investment strategies, reporting standards, and market innovation.
The recent Climate Bonds Initiative (CBI) conference in London brought together over 200 investors, asset owners, and market leaders. The event underscored that the transition to a sustainable economy is not only a challenge but also a significant investment opportunity. Despite short-term volatility and political uncertainty, investor confidence in sustainable finance remains robust, as evidenced by continued inflows and oversubscription in green and sustainable bonds.
A standout theme was the growing importance of resilience as the next frontier in sustainable finance. The launch of the Climate Bonds Resilience Taxonomy in 2024 now provides investors and issuers with a credible framework for adaptation finance across infrastructure, agriculture, health, and social systems.
Eligible projects for these bonds include flood prevention, port infrastructure upgrades, and support for vulnerable populations. The emphasis is on quantifiable benefits and alignment with international standards (ICMA, CBI), ensuring transparency and measurable impact.
Two years after the release of the Taskforce on Nature-related Financial Disclosures (TNFD) recommendations, market adoption is accelerating. Over 500 TNFD-aligned reports have been published, and 620 organizations representing USD 20 trillion in assets under management have committed to the framework. Surveys show that 63% of respondents consider nature-related risks as significant as climate-related risks for their financial future.
The convergence of standards (SASB, ISSB, GRI, ESRS) and companies’ familiarity with water, waste, and forestry reporting are facilitating TNFD adoption. The most common metrics for reporting include waste management, water consumption, and pollution, while biodiversity metrics remain complex but increasingly essential for materiality assessments.
The Paulson Institute’s latest report highlights the widening biodiversity financing gap, now estimated at USD 942 billion per year. While biodiversity-related financial flows have risen to USD 208 billion in 2024, the annual target of USD 1.15 trillion by 2030 remains distant. Innovative instruments such as environmental impact bonds, nature performance bonds, and sustainability-linked loans are gaining traction, drawing attention from mainstream financial institutions.
The International Capital Markets Association (ICMA) emphasizes the bond market’s potential to drive investments toward biodiversity goals. Green and sustainability bonds are increasingly themed around nature conservation and restoration, with biodiversity-focused issuances rising steadily since 2020. Key performance indicators (KPIs) for these instruments include habitat restoration, pollution reduction, and the integration of nature-based solutions. Despite progress, challenges remain. The limited number of bankable projects, dependence on public or philanthropic support, and the complexity of biodiversity metrics constrain the flow of funds. However, the direction is clear: biodiversity is becoming a core consideration in sustainable investment.
Using the most recent figures published by Morningstar , Global sustainable fund assets rose to USD 3.7 trillion at the end of Q3 2025 and remain largely dominated by Europe, representing over 85% of these assets, while the US stands at 10% and the rest of the world for the remainder. While flows are negative globally year to date, regional differences exist, such as the positive net inflows experienced in Canada and Asia (ex-Japan) throughout the year. Essentially, investors’ appetite for sustainable funds remains muted amid geopolitical and regulatory uncertainty, with notable regional differences. Despite the outflows, total assets increased due to market appreciation, especially in Europe and the US.
Another important divergence being observed is at the asset class level. While equity funds saw redemptions in some markets, fixed income continued with net positive inflows, an indication that investors are not necessarily shying away from sustainable products but are undergoing an asset mix rebalancing, having indirect consequences on total flows.
As we turn to the new year, it will be interesting to monitor developments in transition finance, particularly on the heels of the release of Canada’s Federal Budget, which signaled the government remains committed to regular green bond issuances and will explore the development of a Sustainable Bond Framework that would allow for the issuance of both green and transition bonds to be aligned with Made-in-Canada Sustainable Investment Guidelines ("taxonomy").
Global Corporate Sustainability Report 2025 | OECD
An Update to the Landmark Financing Nature Report | Paulson Institute
Global Sustainable Fund Flows: Q3 2025 in Review | MorningStar
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