Sustainability Quarterly

Welcome to the second-quarter 2025 edition of the S&P Global Sustainability Quarterly, the flagship sustainability publication from S&P Global. The latest edition features a collection of research on topics ranging from climate change to supply chains, tariffs to sustainability regulations, and nature preservation to financial inclusion.

The common thread across these pieces is that each one focuses on an area in flux. This volatility signals risk, but that also means opportunity for those who understand the changing landscape. 

Research from S&P Global Ratings explores how physical climate risks are affecting companies’ value chains — in some cases leading to business disruptions and material financial impacts. Understanding these value chain exposures can help companies prioritize their investments in climate adaptation to have the greatest impact on supply chain resilience.  

Research from S&P Global Energy explores how trade tensions are reshaping US clean technology. The clean energy supply chain is highly exposed to tariffs, particularly for technologies dependent on imported components from China. Rising costs associated with announced US tariffs, alongside limited domestic manufacturing capacity and broader policy uncertainties, pose challenges for uptake of clean energy in the US, with power sector storage batteries especially impacted.  

Research from S&P Global Sustainable1 explores how sustainability reporting is evolving. In a bid to enhance the EU’s economic competitiveness, the European Commission proposed an Omnibus Simplification Package that could shrink the amount of sustainability information available to the market. The tradeoff is that simplification would lower the reporting burden for small and medium-sized enterprises.

The Omnibus package also has implications for the EU's Carbon Border Adjustment Mechanism (CBAM), which will impact trade by requiring importers of select products on the EU market to pay a fee reflecting the underlying carbon intensity of their goods. Research from S&P Global Energy finds that Canada, Brazil, South Africa and Turkey will be particularly exposed, with the iron and steel sector most impacted.

Previous editions of the Sustainability Quarterly have examined the intersection of climate change and nature loss — a topic we expect will remain squarely in focus in sustainability conversations in the second half of 2025 as Brazil prepares to host the UN’s annual climate change conference, COP30, in the rainforest city of Belém. In this edition, we include research from S&P Global Ratings that examines the role local governments play in protecting nature, using the US as a case study. While nature’s role in improving quality of life is widely understood, quantifying nature’s economic value remains a challenge. This means that state and local governments face difficult decisions between prioritizing investment in nature preservation versus other pressing economic needs, such as housing and employment.

This edition also explores how financial inclusion contributes to economic growth, poverty reduction and societal development in emerging and frontier markets. Research from S&P Global Ratings outlines why this makes financial inclusion a priority for policymakers and relevant to credit rating and risk assessment in sectors such as banks and sovereigns. The research finds that new technology, financial innovation, better financial literacy, prudent public policy goals and improved affordability will be key enablers of financial inclusion.

As we enter the second half of 2025, volatility appears to be one of the few constants. We hope that the research featured in this edition helps shed light on some of the rapidly evolving issues reshaping the sustainability landscape.