This year we expect ESG/sustainability to be influenced by several macro trends, including technology, geopolitics, and capital markets.
By Paul A. Davies, Betty M. Huber, and Michael D. Green
In 2026, we expect that business and legal leaders who successfully disentangle and separate economic, political, and legal risk with a clear strategic focus will be best able to capitalize on ESG/sustainability imperatives.
Interest rates are expected to fall across many key markets, which will likely lead to an active IPO and M&A market. Investors are expected to continue to consume and rely on ESG/sustainability data as part of their investment decision-making pre- and post-IPO and acquisitions.In the world of private capital, ESG/sustainability is hardwired into the investment process and ESG/sustainability diligence is now especially important for both valuation and integration purposes.
A new generation of AI tools is helping to shed light on what are challenging ESG/sustainability diligence topics. We expect increased AI use by buyers and investors to deepen their understanding of companies’ business models and risk, including through the value chain.
Given this context, we have once again set out to assess what we foresee as the 10 substantive legal trends in ESG/sustainability that emerge from these macro trends. In short, we expect top businesses and legal departments will continue to need to adopt creative and strategic problem-solving regarding ESG/sustainability matters in response to shifting uncertainty.