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Megatrends 2025: Environmental tipping points

What might drive transformative change over the next decade and how should your business prepare? Learn about what your business can do to both lessen and adapt to the effects of a changing climate, and how we and our partners can help. 

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Building business resilience for the future

Businesses who actively track and address the external trends shaping domestic and global markets are better equipped to thrive in the future. Businesses that anticipate emerging opportunities and potential disruptions are better placed to adapt, compete and lead.  

As Scotland’s national economic development agency, we track the trends that are likely to shape Scotland’s economic future – addressing these via our three missions: accelerating the energy transition, boosting capital investment and scaling innovation.   

Our latest Megatrends 2025 analysis opens in a new window (PDF, 1.52 MB, 17 Pages)opens in a new window identifies four transformative shifts that will shape Scotland’s economy over the next decade: 

  • The race for security 
  • The skills squeeze 
  • Environmental tipping points 
  • Breakthrough technologies 

This article explores the third of these: environmental tipping points – and what it means for Scotland’s businesses, policymakers and economy. Drawing on global evidence and local insight, we highlight the risks, opportunities and actions needed to build a resilient, future-ready economy.

We've called this trend 'environmental tipping points' since our world – and our economy within this – is at a critical stage. The Earth’s climate system is in a precarious state, and this presents fundamental risks to businesses and our wider economy.

But it’s not too late to change course – and businesses have a central role in driving change.  

Far from being viewed as a distant issue beyond the influence of businesses, the climate change agenda is one of business opportunity. Businesses can not only increase their future resilience to planetary change, but they can also positively shape markets and technologies to help society adapt to a changing world while also driving increased business performance.

This article describes what’s already changing and how these trends might impact on businesses over the next decade and beyond. It charts the links between global trends and the actions businesses can take today – with the support of Scottish Enterprise and our partners.  

Did you know?

Six forces reshaping the future

The Earth’s climate system is in a precarious state. Human activity is causing global warming and biodiversity loss, and we are on the cusp of breaching several critical environmental tipping points. While global progress in reversing climate change remains off track there are nevertheless many opportunities for businesses to create new solutions and practices that meet fast-growing global demand. 

Our research has identified six environmental trends that are shaping the future.

1. Global warming

Human activity has increased global temperatures by 1.3°C since pre-industrial times. The last decade (2015–2024) has been the warmest on record. Scotland is experiencing hotter, drier summers, wetter winters and more frequent flooding and heatwaves opens in a new window.

Rising temperatures have led to more frequent and severe weather events, including heavy rainfall and heatwaves. An estimated 5.5 million UK homes are at risk of flooding.

These changes have also contributed to a global sea level risk of about 21cm since 1900, caused by melting polar ice and thermal expansion. The global average sea surface temperature in 2023 was the highest ever recorded. Unless we rapidly reduce emissions global warming of 1.5 degrees is likely to be reached in the early 2030s.  

A key risk is that certain environmental tipping points could be breached as soon as the mid-2030s:

  • The Atlantic Meridional Overturning Circulation (AMOC) – a key ocean current system – could weaken or collapse, cooling Scotland’s climate by 3–5°C and reducing rainfall by up to 200mm annuallyopens in a new window. This would make arable crops uneconomic in many areas. There's currently a low likelihood of this taking place.
  • Melting of the Greenland ice sheet could lock in sea-level rise of up to 7 metres over decades, threatening coastal infrastructure and communities.

Environmental tipping points are thresholds in Earth’s systems – climate, oceans, biodiversity – beyond which change becomes irreversible and self-reinforcing. Once crossed, these shifts can trigger cascading effects across ecosystems, economies and societies.

Scientists currently suggestopens in a new window five climate tipping points are possible beyond 1°C, four are likely beyond 1.5°C and many more are likely on the current trajectory of global warming.

Watch a video on the tipping points of climate change:

Climate tipping points graphic described in more detail 

2. Biodiversity loss

Our economy is part of nature, not the other way around. The World Economic Forumopens in a new window has calculated at around 50% of global GDP is moderately or highly dependent on nature. This dependence is particularly pronounced in industries like agriculture, food and drink and fisheries, making the loss of nature a significant financial and material risk to businesses, similar to how climate change is considered a threat.

A greater understanding of nature's role is crucial for building resilient supply chains and protecting natural capital for future economic prosperity:

  • 41% of UK species have declined since 1970 opens in a new window. Globally, over 42,000 species are at risk of extinction. Ecosystem degradation threatens food security, water quality and economic stability.
  • Since 1970 at least 75% of the world’s land surface and 66% of the ocean have been significantly altered and degraded by human activity.
  • Rising temperatures push species out of their natural habitats, allowing invasive non-native species to out-compete native species.

Watch a video on biodiversity and business sustainability:

3. Net zero market opportunities 

In order to combat climate change and biodiversity loss a significant trend is the global growth in demand for greener products and services.

  • The global green economy was worth $7.2 trillion USD in Q1 2025, the fastest-growing industry since 2008 after the technology sector. Addressing climate change is forecast to require a cumulative investment in the green economy of $109 trillion USD to $275 trillion USD by 2050.
  • Scotland’s net zero economyopens in a new window contributes £9.1 billion GVA and supports over 100,700 jobs jobs – with nearly 1 in 25 Scottish workers employed in a net zero-related role.
  • The UK’s net zero economy grew by 10%opens in a new window in 2023–24, three times faster than the wider economy.

4. Critical technologies 

Research highlights significant business innovation and investment in a range of climate technologies. While there's a role for new solutions, analysts expect most emissions reductions by 2035 will come from existing, known technologiesopens in a new window including heat pumps, industrial electrification and the adoption of circular practices.

Global competition is fierce. China dominates exports of climate technologies and is expected to earn more revenue from climate technologies by 2035 than the UAE and Saudi Arabia make today from oil.

However, Scotland is very competitive in renewable energy generation, including offshore wind, hydrogen and clean heat, and generated 113% of its electricity needs in 2022 opens in a new window. The Scottish Government aims to have capacity to produce five gigawatts of hydrogen by 2030 and 25 gigawatts by 2045, creating up to 300,000 jobs by 2045. The shift to renewable energy production has huge potential to make energy cheaper and cleaner.

Research highlights a range of other emerging innovations including:

  • Synthetic biologyopens in a new window: this includes algae producing cleaner industrial fuels, modifying trees to absorb more CO2 and creating bacteria to repair cracks in buildings to make them last longer.
  • Space-based solar poweropens in a new window: this could generate up to a quarter of the UK’s current annual electricity demand by 2050. Beaming energy from the Sun to Earth using wireless technology could deliver clean, baseload energy, 24/7 in all weathers.

Watch a video: Investing in climate technologiesopens in a new window from the World Economic Forum (3.13 minutes).

5. Nature-based solutions

Significantly, Scotland cannot reach net zero without investing in nature-based solutionsopens in a new window.  

Restoring peatlands, forests and marine ecosystems will deliver around 30% of Scotland’s required emissions reductions by 2045.  

  • Action by businesses can help improve biodiversity. Many UK companies are already voluntarily addressing nature and climate-related risks and opportunities. The UK Government is exploring how nature can be considered alongside climate in transition plansopens in a new window, drawing on the Taskforce on Nature-Related Financial Disclosures framework (TNFD).
  • Global finance for nature-based solutions reached $200 billion USD in 2022 – but this is only 2.5% of total net zero investment and only around 37% of what is needed annually by 2030 to meet climate and biodiversity goals.

Watch a video on eight sustainability ideas that will change the world, and watch another video on nature and your business strategy: 

6. Circular economy

In a circular economy, products and materials are kept in circulation through processes such as maintenance, reuse, refurbishment, remanufacture, recycling and composting. A circular economy tackles environmental challenges by decoupling economic activity from the consumption of finite resources. 

There are strong business benefits from reducing resource use and reusing materials including cutting costs, driving innovation, forging closer customer engagement and boosting business resilience.

Watch a video explaining more about the circular economy:

How might this impact businesses in Scotland?

Accelerating climate change and biodiversity loss will have cascading impacts, especially if climate tipping points are exceeded. This will amplify risks and likely increase competition for resources including water, food, energy and critical minerals.

Even if we were to stop all greenhouse gas emissions today, the inertia in the climate system, especially in the oceans, means that temperatures will continue to rise before stabilisingopens in a new window.

Beyond physical and operational risks there are also financial risks to businesses in Scotland. Investors and regulators increasingly view climate and biodiversity and risks as material to financial performance, affecting asset values, the cost of capital and insurance premiums. Insurers may withdraw coverage or increase premiums in high-risk locations (e.g. prone to flooding, wildfires).  

There is a risk that businesses who fail to disclose material nature/climate risks or who resort to greenwashing become stranded assets.  Public and private sector investment will flow to ESG-aligned firms. Stakeholder expectations are rising – customers, investors and employees increasingly expect businesses to proactively address and adapt to climate change and nature loss.

Businesses in Scotland are well-positioned to lead in the global green economy. Businesses have clear roles in mitigating global risks, finding new solutions and adapting to climate changeopens in a new window. This includes creating green products, services and technologies, and exporting these solutions globally. It also includes reducing resource inputs and adopting circular practices to drive productivity growth and innovation. 

A growing number of businesses are adopting ESG-aligned strategies, including those in the B-Corp movement and those adopting Climate Transition Plans in response to new UK disclosure requirements. Strong environmental and social credentials can differentiate businesses, attract investment and open new markets.

What steps can your business take?

No matter the size or sector of your business, there's a range of practical actions you can take now to future-proof your strategy. We can support you in your journey.

1. Develop a tailored sustainability plan aligned with ESG expectations

2. Adopt climate technologies

3. Grasp net zero market opportunities

4. Adopt circular practices

5. Invest in nature

6. Adapt to climate impacts

  • Review current and potential future climate impacts across your business and supply chain
  • Improve flood resilience, reduce energy use and plan for supply chain shocks
  • Improve business resilience with support from Adaptation Scotlandopens in a new window 

Case studies and useful links

ESG-aligned sustainability planning

Business operations

Climate adaptation

Net zero market opportunities

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Phone: +44 300 013 3385opens in a new window