1. Refining Sustainability Goals
Companies are reassessing their sustainability targets, recognising the importance of setting realistic and achievable objectives. Industry insights indicate a shift towards more specific ambitions, focusing on areas such as water efficiencies, reduced packaging, and diversity, equity, and inclusion (DEI) initiatives.
2. Regulatory Landscape and Compliance
The introduction of the Corporate Sustainability Reporting Directive (CSRD) in the EU and similar laws worldwide marks a new era in reporting. Organisations are bracing for increased regulatory scrutiny, with expectations that the U.S. Securities and Exchange Commission will issue climate-related requirements in 2024.
3. Transition to Clean Energy
Businesses are steering away from fossil fuels towards clean energy sources as part of the broader trend towards power decarbonisation. This transition is seen as crucial in achieving sustainability objectives, presenting opportunities for cost savings and positive positioning in an environmentally conscious marketplace.
4. Balancing Compliance and Genuine Improvement
Despite the push for carbon neutrality, concerns arise that some organisations may focus on mere compliance with sustainability laws rather than genuine sustainability objectives. Attention may shift towards meeting regulatory requirements rather than embodying sustainability as a core enterprise value.
5. Scope 3 and Integrated Sustainability Awareness
The trend is shifting from siloed sustainability efforts to an integrated, enterprise-wide approach. Companies are expanding their focus beyond direct emissions, incorporating carbon-producing activities throughout their supply chains, and emphasising smart supply chains to meet stakeholder demands.
6. Enhanced Transparency in Enterprise Sustainability
The pressure to combat greenwashing and purpose-washing is prompting organisations to be more transparent about their sustainability efforts. Companies are ensuring that their statements align with concrete data and actions, addressing consumer concerns highlighted in recent surveys.
7. Advanced Data Collection and Analysis
Understanding ESG data collection processes is becoming a critical aspect of business sustainability. Organisations are leveraging IT and data teams not only to meet legal reporting requirements but also to identify opportunities for ESG improvement using analytics and artificial intelligence.
8. Technology as a Sustainability Enabler
Executives are increasingly exploring how technology, including artificial intelligence and generative AI, can support sustainability initiatives. Additionally, there is a growing focus on ‘greening’ technology stacks, selecting eco-friendly cloud providers and designing software with lower energy requirements.
9. Comprehensive Approach to Sustainability
Organisations are broadening their sustainability programs beyond carbon emissions to address various environmental impacts. Plans now extend to reducing all greenhouse gas emissions, managing water consumption, and mitigating the impact of physical plants on local biodiversity.
10. Sustainability as a Market Catalyst
Sustainability is evolving into a market force, unlocking both revenue-generating and cost-saving opportunities. Industry experts anticipate a synergised relationship between sustainability and profit, with growth markets emerging in areas such as the circular economy.
2024 is not just a year; it is a pivotal era for sustainability in business. Organisations navigating these trends must adopt a comprehensive, transparent approach to thrive amidst evolving economic forces, regulatory shifts, and changing consumer expectations. The urgency for sustainable business practices is clear, and companies must embrace these trends to stay relevant and resilient.
