ESG Trends 2026
There is one trend we can all predicted for 2026 and that is uncertainty. As we get comfortable with a geo-political landscape that flips and pivots almost daily it may feel impossible to predict the future.
At ENVOLV horizon scanning is integral to our business. With a constant pulse on the regulatory landscape, investor and customer sentiment as well as emerging risks, we can see some key trends which will shape the ESG landscape in 2026.
Before we dive into trends there is an elephant in the room we must address. The so-called ESG backlash is something we read about but we are yet to feel. Our clients and wider network are still very much seeing the value of ESG/sustainability. ESG and sustainability roles are still in abundance, and we expect an uptick in the second half of 2025. The headlines scream backlash but the data and our experience says something very different. The elephant is non-existent in this report because our predictions are based on reality.
ESG Trends 2026 is ENVOLV’s predictions for what companies should be preparing for and key topics that will likely impact the ESG space. From the role of AI to regulation and green finance, 2026 will bring areas of growth alongside challenge.
ENVOLV provide ESG expertise that unlock commercial opportunities. Our clients love that we are commercial, pragmatic and credible. They love that we add value, from unlocking new markets to enhancing their brand. We stand out from the crowd because we don’t prioritise ideological goals over commercially viable, our recommendations are aligned with business realities and add strategic value.
ESG isn’t a tick box, it is a value driver. See what we predict for next year.
Get Ready To Report
Simplification was the hot topic of 2025. Lots of “dialling back” headlines but we can all agree simplification is welcome. Corporate Sustainability Reporting Directive reports in 2024/24 averaged between 100-150 pages, and lets be honest no is reading that!
With simplification firmly on the agenda what do you need to be ready for?
EU
Corporate Sustainability Reporting Directive (CSRD) omnibus will be finalised in early 2026. The threshold will likely be agreed for EU companies of circa 1,000 employees and €50m turnover or €25m balance sheet (much higher for non-EU entities). Reporting will be led by materiality to reduce the volume and improve the value of reporting.
Alongside the omnibus a voluntary sustainability reporting standard for SME (less than 1000 headcount) has been agreed in 2025. Adoption may not happen at pace but we believe adoption will start in 2026 and will be welcomed by companies currently grappling with client reporting demands. One of our clients have seen this demand grow by circa 300% in 18months. And with requests being unique each time the workload is slowing down speed of sales.
UK
The Sustainable Reporting Standard will likely launch in 2026. The threshold is yet to be discussed but we predicted companies of over 250 employees and a turnover of £36m will be expected to report from financial years starting from the 1st Jan. 2026 will be a year for improving ESG data and preparing reporting. But reporting for reporting sake is a pointless task – this new requirement will help companies focus on what drives commercials and will strengthen ESG value propositions with data.
US
Federal ESG related legislative changes remain stalled at the time of publishing (Aug 2025) and in all honesty we doubt this will progress in 2026. What we predict though is an uptick in state led legislative changes, either for or against ESG. This fragmented legal landscape will likely lead to increased requirements for US entities.
Data, AI And The Ever Changing Landscape
The role of AI in ESG continues to be debated. What are the carbon emissions of AI? Will the benefits of AI outweigh the emissions increase?
We predict 2026 will be the year of AI and data clarity.
What does this mean for our clients?
Responsible AI needs to become a key part of your AI adoption plans. Only 2% of companies have adequate responsible AI measures in place at Summer 2025. AI risks span data protection, intellectual property leaks, increased emissions, reduce employee productivity, discrimination, hallucinations……. In 2026 responsible AI principles, policies, employee training, supplier due diligence will all become more common.
An off-cuff prediction is that investment in AI led companies will stabilise. A 2025 trend has been high valuation of AI start-ups and based on our work with investors we expect the responsible AI to become a big factor in due diligence risk assessments.
Another prediction is AI emissions being reported within scope 3 Greenhouse Gas (GHG). Spend based modelling of emissions is easier but lack accuracy. Big tech will start to be transparent on their AI emissions and we predict enterprise subscribers will get access to detailed GHG reporting in 2026 with per use or user models being rolled out in 2026.
What will not come in 2026 is AI reporting GHG emissions for you. We have been testing this and AI responses with carbon data, including supplier intensity data is inaccurate more than half of the time. AI is not ready and we advise clients to hold off on using AI to calculate emissions.
The S In ESG Will Grow
Last week we spent time with investors and a key theme was apparent. The S in ESG is silent and they want that to change. Investor sentiment, geopolitical uncertainty, fragmented community interests, public sector procurement, a pendulum swinging skills shortage and the integration of AI in organisational design, are all pointed towards the S in ESG significantly growing in 2026.
Data and Reporting
EU and UK legislation is expanding accountability for labour rights and supply chain working conditions. But legislation is a framework, the real value will be unlocking opportunities that enhance your strategy.
We expect in 2026 to see a rise in social data capture and impact reporting. Platforms such as Measure Up and B4SI will emerge to help companies quantify their social impact strategy.
We also expect HR teams to be brought into the ESG reporting space with metrics such as retention, engagement, DEI, productivity being high on the agenda as indicators of risks and potential growth limitations.
DEI Step Back
In 2025 some companies went quiet on diversity, equity and inclusion. Cancelled women in leadership programmes, postponed ethnicity in leadership target setting, changing language to remove the term DEI, are all things we directly witnessed (luckily not from our clients).
We predicted 2026 will see the committed remain committed and those who quietly retreated will stay silent. What will start to change is the impact of those decisions. There have been no commercial fall-out due to remaining committed, although some quitters have experienced reduced consumer demand.
Value, potential growth and risk decisions still include DEI metrics. In 2026 DEI will become a value differentiator.
Community Listening
Employee, consumer and community sentiment is changing at pace. This isn’t a revelation for 2026 but we predict corporate strategies intensifying their listening and engagement strategy.
Employee volunteering is proven to be the only driver that improved employee wellbeing (University of Oxford research). And volunteering provides an ideal vehicle for community engagement and listening.
We predict in 2026 that activities such as employee volunteering, philanthropy, consumer feedback, and employee listening will grow in frequency and impact.
Trends To Look Out For
ESG is Everyone’s Job
ENVOLV advocate for this every day and we can see others are starting to understand why. ESG/Sustainability needs to be included in everyone’s role. From the teams designing AI to Procurement and Operations; sustainable business models do not sit in one team. From role descriptions to training and team meeting agendas, ESG/Sustainability will start to get baked in from 2026.
Green Finance Growth
ESG-focused investment will soar, with sustainable finance products (such as green bonds and sustainability-linked loans) expanding rapidly. Already ENVOLV is being asked to advise on investor propositions which isn’t new but we are seeing a significant increase sustainability linked lending. This is predicted to grow in 2026 and beyond.
Supply-chains As A Force For Good
Some companies have been on this journey for years; others are starting to notice it now. Your supply-chain is a hugely impactful and powerful tool. Scope 3 carbon emissions are growing in importance. 60-75% of emissions on average come from supply-chain. Decarbonisation of suppliers is in all companies net zero transition plans. Imagine the social impact if you joined forces with your supply-chain?
The Social Value Procurement Act in the UK has laid the foundations and in 2026 we predict more companies will integrate the concept into their own supply-chain management.
Nature Is Firmly Will Be Firmly On The Corporate Agenda
Biodiversity is now front and center as companies account for their environmental impact. In 2026 we will see innovation in the nature space grow, from building design to supply-chain collaborations. Businesses, where biodiversity is material, will invest skills, resources and even focus acquisitions on unlocking innovate solutions. It started in 2025 and will grow significantly in 2026.