2025 marked substantial progress in ESG, sustainability, and climate action dialogues, significantly enriching the ESG lexicon. This is the first time in recent memory that I have encountered more than 30 new terms and phrases. These encapsulate regulatory transformations like CSRD and ISSB updates and also cover innovations in digital carbon management. These include nature-centric strategies such as biodiversity credits, empowering corporate leaders, and elevating boardroom discourse. They fortify reporting integrity and position organizations at the vanguard of sustainable transformation. Here is my list of new terms that dominated conversations in 2025.
Climate Competent Board: The expectation that board members possess literal Climate Literacy and a dedicated Climate Committee became a norm.
Nature-positive: Moving beyond net-zero for carbon to include a measurable goal of halting and reversing nature loss by 2030, with a full recovery by 2050.
Nature-based solutions (NbS): Ecosystem restoration projects for carbon sequestration and biodiversity.
Biodiversity credits: Tradable units for verified biodiversity gains, piloted in frameworks like the Taskforce on Nature-related Financial Disclosures (TNFD).
ESRS E4: CSRD standard for biodiversity reporting on ecosystems, species, and financial risks in double materiality assessments.
NFDR (Nature-Financial Data Repository): Inspired by TCFD, a proposed global framework for corporate nature-related financial disclosures.
Climate transition plan: A roadmap to net-zero by 2050 by integrating assets and operations for Paris Agreement alignment.
Just transition plan (JTP): Evolved from a mandatory disclosure item in some jurisdictions, requiring detailed plans for workforce retraining, community investment, and social dialogue in the shift to a green economy.
Scope 4 (avoided emissions): 2025 saw major standard-setting bodies release guidance on measuring and reporting emissions avoided by a product or service.
Scope 3 data platform: A new category of enterprise software focused specifically on aggregating, calculating, and managing emissions data across value chains.
Blue carbon finance: Mechanisms (credits, bonds) specifically for the protection and restoration of coastal and marine ecosystems for carbon sequestration.
Climate-resilient infrastructure bond (CRIB): A new class of green bond specifically earmarked for projects designed to withstand climate impacts
Climavore: A person selecting a diet based on food production’s climate impact, such as resilient options.
Digital sobriety: Minimizing digital resource use to cut IT-related emissions and emphasizing efficient tech practices.
Green claims directive (GCD): EU rules for substantiating environmental claims, targeting carbon-neutral assertions.
Digital carbon footprint: GHG emissions from data centers and devices driving AI-optimized sustainability tools.
Supply chain traceability: Verification of sustainability across value chains, essential for ESG compliance and anti-greenwashing.
CS3D (Corporate Sustainability Due Diligence Directive): This EU directive became a core compliance term for global supply chains.
Transition risk modeling: Quantitative assessment of climate policy and tech shifts on asset values, mandated in ECB stress tests.
Financed emissions: Scope 3 Category 15 emissions from investments like derivatives are now flexibly reported under ISSB updates.
Carbon in-set: Direct emission reductions within a company’s value chain, distinct from offsets for authentic net-zero claims.
Carbon lock-in liability: The financial and strategic risk for companies from continued investment in fossil-fuel assets that will become stranded or face costly retrofits due to climate policy.
Climate litigation risk assessment: A due diligence process to evaluate exposure to lawsuits arising from misleading claims, failure to adapt, or breaches.
AI sustainability governance: AI development and deployment align with ESG goals, covering energy use, bias mitigation, and application for climate solutions.
ESG data provider due diligence: Critically evaluating the methodologies and sources of third-party ESG ratings, driven by regulatory scrutiny.
Grid-forming inverter: A critical technology for renewable-heavy grids, for grid stability and decarbonization.
Digital product passport (DPP): This digital product will enable tracking the product’s environmental footprint, materials, and reparability across its lifecycle.
VCMI (Voluntary Carbon Markets Integrity Initiative): The Claims Code of Practice became a reference for how companies can use carbon credits in net-zero claims.
Greenwashing Penalty: Specific fines or sanctions levied by regulators for false or misleading sustainability claims.
Green Swans: Gained traction to describe unpredictable, climate-driven, systemic financial crises.
