The majority of organizations have been affected by climate disruption, yet executives are struggling to actively prepare for increased climate risks

Mumbai : The fourth edition of the Capgemini Research Institute’s report, “A world in balance 2025: Unlocking resilience and long-term value through environmental action,” released today, finds that organizations remain committed to sustainability despite global uncertainty. In fact, three quarters of them say it is a core future-proofing strategy for their organizations to drive long-term competitiveness, innovation, and resilience. However, the report reveals a gap between perceived preparedness and actual resilience, suggesting organizations are confusing planning with concrete climate adaptation.

Organizations continue to prioritize sustainability despite global uncertainty

More than 4 in 5 organizations are planning to increase investment in environmental sustainability, up 8pp since last year. Compliance with regulations remains the lead factor driving sustainability initiatives, followed by business value – such as profitability, cost savings, and operational efficiency. Despite the business case, two thirds of executives say they are under increasing pressure to demonstrate credible, science-based progress. Yet only 21% of organizations have developed detailed transition plans with interim targets and capital allocation. Internally, progress is hindered by budget constraints, inadequate data and measurement systems and operational silos. Externally, nearly two thirds of executives agree that geopolitics is currently slowing down sustainability investments and projects, a share that is stable since last year.

Climate strategies are in place, but execution remains limited across organizations

In today’s global environment characterized by global warming and climate disasters, organizations are feeling the strain of climate impacts, with more than seven in ten executives reporting disruptions to supply chains, noting further disruptions to production, and suffering from raw material shortages. Additionally, two-thirds foresee difficulties in managing insurance or financial risks. While the majority say they prioritize climate adaptation, more than half consider their organization underprepared for the impacts of climate change. The disconnect between perceived readiness and actual resilience suggests that few organizations are taking adequate tangible action, with only 38% upgrading infrastructure, 31% shifting production to less climate-vulnerable regions and only 26% redesigning products.

“Although sustainability regulations are putting less pressure on organizations, business leaders still see sustainability as a core driver of business value. However, with global uncertainty and constrained budgets, many companies are facing a reality check,” says Cyril Garcia, Head of Global Sustainability Services and Corporate Responsibility, and Group Executive Board Member at Capgemini. “With climate risks increasingly high on the corporate agenda, business leaders need to adopt a pragmatic, operational approach and urgently implement concrete, financed transition and adaptation measures. This will not only build true resilience, but also fuel innovation and competitiveness.”

AI’s environmental footprint under closer scrutiny

AI is playing a significant role in advancing sustainability, with nearly two thirds of executives reporting that their organizations use AI to achieve their sustainability agenda. However, despite its ability to process data, reduce resource consumption and create efficiencies to help drive sustainability, AI has its own environmental impact. 57% of executives acknowledge that generative AI’s (Gen AI) environmental impact is being discussed in boardrooms, but less than a third report having taken steps to mitigate it. The research indicates that there is a growing caution around its environmental footprint, with the number of executives believing that the benefits of Gen AI outweigh its environmental costs dropping from 67% in 2024 to 57% in 2025.

A widening credibility gap between brands and consumers

On the consumer front, skepticism is rising sharply – more than six in ten (62%) consumers believe companies are engaging in greenwashing, up from a third in 2023 and over half in 2024. Further, more than three quarters believe corporations should do more to reduce GHG emissions. This highlights the need for transparent and evidence-backed sustainability communication. In addition, only a quarter of consumers consider sustainable products affordable, and just 16% feel they have access to sufficient sustainability information.

To access the full report: https://www.capgemini.com/insights/research-library/sustainability-trends-2025

Report Methodology

The Capgemini Research Institute conducted a global survey in June and July 2025, reaching 2,146 executives from 716 organizations – each with over $1 billion in annual revenue and a combined annual revenue of approximately $10.7 trillion – across 13 countries in North America, Europe, and Asia-Pacific, and spanning 12 industries and sectors. Additionally, the Institute surveyed 6,566 consumers aged 18 and over across the same countries and conducted interviews with 15 senior executives from leading organizations worldwide.