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PTClimate and Sustainability: How can companies prepare for 2025?
Climate change is already among the top ten business risks in the world, according to research by Allianz Risk Barometer 2024. Therefore, companies that do not have action plans for identifying, mitigating, adapting to and/or managing climate risks must prepare for the scenario of decarbonizing their operations and engaging their value chains. According to the Inter-American Development Bank (IDB), the cost of climate change to the global economy could reach US$22 billion per year, affecting countries unequally.
In this challenging context, it is typical for companies to have doubts about how to start acting on these issues and how to implement initiatives appropriate to their size and segment of activity. It is necessary to identify and understand which actions to prioritize in the short, medium and long term; as well as having visibility on the investments needed to fund these actions, especially in the last quarter, when several organizations are defining their budgets for the next year.
To support companies in these matters, our experts have prepared a list of the main points that the private sector should reflect on in 2024 and address in 2025, raising awareness among leaders for decision-making. Check it out:
1. Reporting information to IFRS (International Financial Reporting Standards)
In 2023, the ISSB (International Sustainability Standards Board) published the international standards for disclosing sustainability information for the financial market. IFRS S1 contains reporting requirements on risks and opportunities related to sustainability; IFRS S2 concerns issues related to climate and should be used in conjunction with S1. With the new standard, it is clearer to companies that this agenda is also financial.
In Brazil, due to a resolution by the Brazilian Securities and Exchange Commission (CVM) in the same year, companies listed on the stock exchange will have to report this information in a mandatory and auditable manner starting in 2027, that is, the report for the 2026 fiscal year. Therefore, throughout 2025, companies need to understand their level of maturity on the topic and gather robust inputs for reporting, ensuring the completeness of this information. In addition to Brazil, other countries are adopting this regulation on an accelerated scale, such as: Colombia, Peru, Costa Rica, Panama and Mexico.
2. Compliance with the CSRD (Corporate Sustainability Reporting Directive) guidelines
In force since January 2023, the CSRD is a European Union (EU) directive that requires companies to disclose information on sustainability. The CSRD seeks to modernize and strengthen the rules regarding social and environmental information that companies must report and should be applied for the first time in fiscal year 2024, for reports published in 2025.
In general, companies that operate in the European Union or are part of the value chain of group companies will have to adapt to the new standard. Therefore, it is important that these organizations obtain a diagnosis so that they understand their level of maturity in this area. In addition, they must carry out a double materiality study to identify how the company impacts society and the environment; and, at the same time, how these aspects may pose risks to the continuity of their business.
3. CBAM (Carbon Border Adjustment Mechanism) will come into force in 2026
CBAM is a customs carbon taxation mechanism for products exported to the European Union (EU). Its objective is to equalize the carbon price of imports to the price paid if the products were produced in European territory. Thus, it seeks to prevent European companies from moving to countries with less stringent regulations.
Established gradually, the CBAM will come into force from 2026, but has been in a transition phase since 2023. During this period, which lasts until December 2025, EU importers must report the total carbon emissions embedded in their products. In this scenario, it is recommended that they seek to understand the impact of this measure on their operations and identify which data they will need to include in their reports.
4. Positioning at COP30 (Conference of the Parties)
With COP30 approaching, which will take place in Belém, Brazil, in November 2025, the country will be at the center of the climate debate. The event is accompanied by pressure for the federal government and Brazilian companies to demonstrate how they are advancing on the decarbonization and resilience journey. The country is also expected to announce a new Nationally Determined Contribution, or NDC, at the Conference.
This highlight brings challenges, but it also represents an opportunity to position itself before strategic players. Therefore, we recommend that companies seek guidance from experts on how to proceed and what actions to take to present a robust narrative based on solid decarbonization efforts, thus avoiding reputational risks.
Count on the support of WayCarbon’s experts so that your company can focus more effective efforts and start 2025 prepared to deal with climate and sustainability challenges. Contact us.
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