The tone at Climate Week New York City (CWNYC) 2025? The ERM team attending encountered a mood of grounded optimism.

Discussions with companies and other stakeholders assembled for Climate Week suggest we are entering a new era, where sustainability efforts are judged by contributions to competitiveness and resilience and the sustainability agenda is increasingly tightly aligned with financial value creation.

ERM’s Climate Week theme, ‘Sustaining Impact, Delivering Value,’ captured the spirit of many of the conversations we had with private sector representatives especially. While realistic about the challenges that political and market volatility pose to sustained momentum, business leaders remain committed to climate actions that deliver both value and impact.

Prior to this CWNYC, people questioned how it would measure up to prior years. With more than 1000 registered events, and an estimated turnout of 100,000 people, the 2025 edition delivered, underscoring the enduring commitment of leaders from all sectors to address climate change.

The takeaways below reflect the collective experience of the ERM team participating in CWNYC and the things that created the sense of grounded optimism we felt.

1. Exploding energy demand – driven by everything from AI data centers and EVs to population growth and industrial expansion – requires accelerated investment.

  • Investments in renewables, nuclear, storage, and grid modernization and expansion reached USD 2.2 billion in 2025 , two-thirds of total energy investment and double new fossil fuel investment. Still, companies at CWNYC stressed the urgency of further ramping up clean energy investments to meet growing demand, especially for electricity.
  • Global power demand is expected to increase by 75 percent by 2050, primarily driven by EV adoption, cooling needs, and AI-driven data center expansion. Data center power needs are forecast to grow six to 16 times by 2035, potentially making them responsible for almost nine percent of global power consumption by 2050.
  • While maximizing clean energy capacity is paramount for the transition to net-zero, judicious use of the lowest-carbon fossil fuel options will also need to be part of the present equation to meet demand. To accommodate this sustainably, investments in clean energy generation, transmission and storage as well as demand management must accelerate and scale to avoid dramatic increases in GHG emissions.
  • Companies at Climate Week highlighted insufficient investment in clean energy, grid infrastructure, and transmission as the largest bottlenecks. Read ERM’s blog on data centers and our recent power trends 2025 report for more information and solutions.

2. Making business sense of sustainability depends on clear strategy. This requires that companies simplify their approach and focus on value creation.

  • Businesses are increasingly shifting their approach to sustainability, making quantifiable financial value of their sustainability actions the determining factor in investment choices. For example, Microsoft utilizes water evaporation to help cool and humidify data centers, which reduces energy costs by up 30 percent while using 90 percent less water than other water-based cooling systems.
  • To identify more such opportunities, companies need compelling business cases that use widely understood financial metrics to calculate and communicate sustainability-related return on investment. In short, companies need to demonstrate how sustainability efforts make commercial sense. ERM’s views on financial quantification and how to use it in business cases are outlined here, while this piece on operational decarbonization (the first in a three-part series) explains how well-targeted operational investments can reduce costs and emissions simultaneously.

3. Regional regulatory fragmentation is growing. Companies require approaches that are universally consistent with their values and commitments, and sufficiently adaptable to local rules and norms. AI can help manage this challenge.

  • Compliance with sustainability disclosure and performance rules is necessary but not sufficient; it is a foundation for action, not a tick-box exercise. Companies gain when compliance serves as a starting point to improve communication and boost competitiveness.
  • ERM helps companies understand mandatory global and regional baselines with tools like Libryo, an AI-enhanced, customizable, legal compliance platform that tracks environmental, health, and safety (EHS) laws and translates information into local languages as required. Similarly, ERM’s quarterly Global Regulations Radar captures and explains the actions required to address the most critical ESG and EHS regulations affecting companies operating globally.
  • Robust compliance with sustainability disclosure regulations in the European Union and California, as well as ISSB-based rules spreading worldwide, generates a wealth of data. Well-executed transition plans built on this data can help companies identify and communicate high-potential options for future cost savings, value protection, and value generation. They will also enable companies and stakeholders to see through the smokescreen that regulatory fragmentation can create.
  • Read ERM’s recent blog and this ERM report to learn more about transition planning. ERM’s recent report Unlocking the CSRD’s Potential on the first wave of mandatory CSRD reports that have been published is an example of the constant work we do to help companies understand and respond to evolving disclosure requirements.

4. Sustainable product innovation and deployment is driven by customer demand. Market share growth, not elusive green premiums, provides the payoff. This begs highly collaborative approaches.

  • Sustainability performance is a differentiator that usually results in preference rather than premiums. Customers want lower-carbon, nature-positive options to help meet their own sustainability obligations and commitments—at market rates. And investors like how they de-risk investments by lessening exposure to negative climate-related impacts. This blog from ERM and Permira outlines the growing importance of carbon in private equity investment decisions. ERM’s own new report, Mission Critical: Resilient mines for a modern society, spells out six levers that can help mining companies develop critical minerals in ways both customers and investors will applaud.
  • When more efficient, less polluting, responsibly sourced, and reliably available options meet customer demand, decarbonization efforts succeed because of the commercial value realized by all parties. Successful product innovation depends on understanding clients’ business strategies and the issues they are trying to solve, then helping them do that. Solutions meeting customer needs grow and protect market share and support product differentiation.
  • Sustainability and supply chain rules – including human rights regulations like the Corporate Sustainability Due Diligence Directive, carbon border adjustment taxes, and companies’ own commitments to decarbonize supply chains – boost demand, but the ultimate differentiator is products that are better than what they seek to replace. Especially as they become more affordable, EVs are a good example—faster, quieter, cheaper to maintain, and lower carbon. Businesses need to deliver EV-equivalent benefits in every product category.
  • Value chain collaboration is paramount to developing better, cheaper, and faster products. ICMM’s Innovation for Cleaner, Safer Vehicles program brought together mining companies, original equipment manufacturers (OEMs), and technology suppliers to accelerate development of zero-emission mining vehicles. Because mining companies made advance purchase promises, OEMs agreed to deliver 28,000 electric trucks by 2027, thirteen years faster than planned before the advance purchase agreement was struck.

5. Companies increasingly recognize the risks of siloed approaches. The new era unfolding, tightly aligning sustainability with financial value creation, depends on fully integrating sustainability into private sector strategies and operations.

  • During a CWNYC session on integrated transition planning hosted by ERM and WBCSD, attendees said that separating climate, nature, and social efforts is artificial and ineffective. One financial institution present suggested using a systems-based approach to assess the impacts of different investment options. For example, the construction of a hydroelectric dam might help a utility decarbonize, but it could also harm ecosystems and/or communities. Such trade-offs need to be resolved in a balanced manner for the low-carbon transition to win broad support.
  • Sufficient, high-quality data forms the highest barrier to integrated, full value chain approaches—value chain data granular enough to inform confident action on clean energy development and purchase, increased supply chain resilience, and managing the next wave of mandatory and voluntary disclosure, is still lacking.
  • An ERM session on just transition in New York demonstrated that understanding of the social impacts of private sector decarbonization efforts is quickly rising. For ideas on how to take a more integrated approach, refer to this report. ERM and WBCSD will also publish a new just transition guide for boards and senior executive leaders before COP30. Additionally, ERM’s AI expertise, our digital services solutions, plus our partnerships with numerous technology-based data management platforms that support improved sustainability performance let us help clients collect, assess, and apply the credible data needed to decarbonize value chains in ways that work financially and socially.

Powering On

‘Powering On’ was the official CWNYC theme. We will do just that.

The grounded optimism our team felt in New York came from blending recognition of the challenges facing the low-carbon transition with the determination required to overcome them. ERM believes that the transition to a net-zero economy is both necessary and possible—and that we will build a stronger economy and support better lives and livelihoods by delivering it. This will happen most speedily when business consistently assesses investment and priorities through a sustainability and financial lens while collaborating with others. Please join us.