UK Businesses Embrace AI and ESG Priorities as They Navigate 2025 Challenges

As the UK business landscape enters 2025, companies are focusing on two key priorities: accelerating artificial intelligence (AI) adoption and preparing for incoming environmental, social, and governance (ESG) regulations. These trends reflect broader efforts to enhance efficiency, stay competitive, and comply with regulatory shifts.

AI has moved beyond its experimental phase, with businesses increasingly investing in the technology. A recent report from Capterra shows that over three-quarters of UK businesses plan to boost their software budgets in 2025, including significant investment in AI. Nicky Tozer, SVP EMEA at Oracle NetSuite, highlighted that AI is becoming a central focus for companies seeking to improve operational efficiency and gain a competitive edge.

While AI adoption among UK small businesses has been relatively slow — only 20% were using the technology as of March 2024, according to the Federation of Small Business — that is set to change. Data from Capterra reveals that AI is now emerging as a priority, alongside IT security, as businesses seek to avoid missing out on its potential. Forrester reports that in 2025, business leaders will shift focus from experimentation to driving bottom-line results through AI, with an emphasis on return on investment (ROI).

One area where AI is expected to have a major impact is in Enterprise Resource Planning (ERP) systems. Leading ERP vendors are rolling out AI features embedded in workflows to help businesses improve decision-making and enhance performance. This shift is reflected in the growing understanding of how to maximize the value of AI, particularly by connecting and standardising data across business lines.

However, to fully reap the benefits of AI, businesses must ensure that employees across all departments are onboard with the technology. According to Capterra, 57% of UK companies that implemented software solutions in the past year also introduced learning management systems (LMS) to support employee onboarding. As AI adoption spreads, business leaders are prioritizing intuitive design and adaptability to ensure that workers can interact with the technology effectively. Natural Language Processing (NLP) is expected to play a key role in enabling more intuitive interactions with AI systems, reducing the need for specialized training.

Alongside AI, businesses must prepare for new ESG regulations. Starting in 2025, the EU’s Corporate Sustainability Reporting Directive (CSRD) will require companies to report on their environmental and social impact. This regulatory shift is part of a broader trend toward increased transparency, with stakeholders — including investors, customers, and employees — demanding more accountability from businesses. Deloitte’s 2024 research revealed that 74% of public companies plan to invest in ESG reporting tools, underscoring the importance of technology in meeting these new requirements.

As businesses navigate 2025, the convergence of AI adoption and ESG compliance will shape their strategies, driving efficiency, transparency, and long-term sustainability in a rapidly evolving market.