How shared standards can help businesses and governments master the energy nexus

Over the past two decades, sustainability reporting has evolved from a peripheral exercise into a core component of corporate strategy. Standards have deepened understanding of climate risk, water stewardship, biodiversity and human rights. Frameworks have strengthened transparency, sharpened governance and helped companies prepare for a rapidly changing risk landscape.

As the field has matured, however, reporting approaches have often remained structured around single issues. This was necessary to build clarity and comparability, but it risks missing the interconnected, systemic nature of today’s challenges.

These interdependencies are well recognized in academic and policy communities – from Johan Rockström’s planetary boundaries to Kate Raworth’s Doughnut Economics, which emphasizes the need to stay within ecological limits while ensuring social foundations. The task now is to translate this systems thinking into practical business decision-making.

The energy nexus illustrates why this matters. It describes the intertwined system linking energy, water, food, nature and human well-being. Pressures in one domain quickly shape outcomes in others: energy production depends on water availability; water scarcity constrains food systems and affects community livelihoods; biodiversity loss undermines agricultural productivity; and expanding digital infrastructure drives energy and water demand.

These dynamics affect not only environmental outcomes but also public health, labour availability, supply-chain stability and economic resilience. Systemic issues require systemic visibility.

Interdependencies across environmental, social and economic systems have always existed, but historically they were difficult to see. Long global supply chains obscure resource use, environmental pressures unfold gradually, and health impacts can appear indirectly. Today, better data, accelerating climate impacts and tightly connected markets are making these relationships clearer and more urgent for boards and investors.

AI and digital infrastructure highlight this shift. High-performance computing increases electricity and water demand, pressuring local grids and water basins, while rapid AI adoption reshapes labour markets and governance expectations. Regions hosting data centres now face resource constraints and workforce transitions simultaneously.

Transition minerals offer another example. Lithium, cobalt and copper extraction commonly occurs where communities rely on the same scarce water resources. As water stress intensifies, implications spread beyond environmental harm to public health, sanitation and community stability. This increases the risk of operational delays and eroding asset value.

Climate change is also reshaping human health and productivity. In South Asia, rising temperatures are reducing safe outdoor working hours in construction and logistics. Heat stress affects labour capacity, delays projects and increases insurance and health costs, turning an environmental challenge into a labour, operational and financial one.

Manufacturing and textile hubs face similar pressures. Water- and heat-sensitive processes are increasingly disrupted by drought and rising temperatures, while worker well-being declines under extreme heat. Here, resource availability, climate vulnerability and labour conditions converge to shape production stability.

These examples illustrate why single-issue reporting is no longer sufficient. Climate strategies can falter if water shortages halt operations. Biodiversity plans may overlook community impacts of land-use change. Technology governance may be undermined by physical resource constraints. Systemic risks demand system-aware reporting.

The next stage of sustainability reporting will not be achieved by creating new frameworks. Instead, it requires improving how existing ones connect and how metrics evolve to reflect system-level realities. This shift is already underway across several global initiatives.

Momentum is building. In September, the International Organization for Standardization (ISO) and the Greenhouse Gas (GHG) Protocol announced plans to work together to align and update their respective approaches to carbon accounting. This marks a significant step toward reducing fragmentation while improving comparability.

In October, the Carbon Measures coalition launched to harmonize product-level carbon footprint accounting across sectors. By aligning methodologies for measuring carbon impacts at the product and supply-chain level, the coalition aims to remove long-standing inconsistencies that have hindered investment, procurement and disclosure decisions.

And in November, the International Sustainability Standards Board (ISSB) announced that future nature-related standard setting will draw formally on the Taskforce on Nature-related Financial Disclosures (TNFD) framework – signalling a shift toward integrated sustainability disclosure that incorporates nature, climate and broader system dependencies.

Important foundations already existed: the ISSB provides a global baseline for financially material sustainability topics; the TNFD extends this thinking to nature-related dependencies; the Capitals Coalition supports integrated assessments across natural, social, human and financial capital; and the International Foundation for Valuing Impacts (IFVI) is developing approaches that translate social and environmental impacts into decision-useful values.

Taken together, these initiatives demonstrate clear movement from compliance-oriented reporting toward a more holistic assessment of value. The opportunity now is to take a systems-based approach and connect these frameworks so that organizations can understand how risks and dependencies interact across systems rather than addressing them in isolation.

A systems-based approach requires disclosing differently, not more. It prioritizes metrics that illuminate interdependencies rather than treating issues in isolation.

In mining and resources, nexus-aware reporting might combine water intensity per tonne of output with basin-level water balance, biodiversity overlap and indicators of community grievance. Together, these metrics show whether operations are compatible with local ecosystem limits and community stability – often the most important determinants of long-term viability.

In data centres and AI infrastructure, companies increasingly track power and water usage effectiveness, litres of water per compute unit or model trained, renewable energy share and exposure to peak-load conditions. These indicators reveal how compute growth interacts with local energy and water systems and whether expansion will compound regional pressures.

In agriculture, integrated metrics such as water withdrawals per tonne, soil-health scores, regenerative practices and farmer-livelihood resilience link ecological stability with long-term supply-chain reliability.

In textiles manufacturing, reporting on water use per garment, wastewater treatment performance, labour conditions and heat-stress exposure provides insight into how climate trends shape resource use, worker well-being and production continuity.

These integrated metrics reveal where risks accumulate, where efficiencies can be unlocked and where strategic interventions can strengthen resilience.

A systems-based approach raises governance challenges. Traditional structures assign different issues to different functions – climate to sustainability teams, labour to HR, water to operations. But when risks span multiple domains, these linear accountability models become strained.

The objective is not to eliminate silos but to complement them. Clear responsibility remains essential, but it must be paired with cross-functional mechanisms for integrated decision-making – from cross-cutting risk committees to integrated scenario analysis and dynamic materiality assessments. Governing systemic issues is ultimately a process of continuous recalibration.

Nexus-aware governance is a platform for value creation. Companies that understand interdependencies can design more resilient supply chains, innovate in resource-efficient technologies, anticipate regulation, build community trust and avoid stranded assets. They can also support workforce transitions, including those linked to AI and automation.

Most importantly, integrating systems thinking strengthens the connection between environmental stewardship and human well-being, demonstrating how climate action, resource security and social stability reinforce one another.

The leaders of the next decade will be those that manage intersections, not categories – advancing reporting frameworks to reflect the complexity of the world in which they operate.

The Global Future Council on Energy Nexus shares ideas and examples through its Energy Nexus Insights series, comprising blogs, articles and infographics; guides for public and private sector decision-makers; and sector analyses