sustainability trends 2023

An agreement reached at the U.N. climate change conference, known as COP27, for a loss and damage fund will seek to address adaptation and resilience challenges of developing countries. Consequently, in 2023, we anticipate the durability of new employee-friendly workplace practices will be tested. MSc in Sustainable Management & Technology, Executives-in-Residence & Executive Fellows. Considering all these pressures, its all too easy to stumble into the ESG reporting trap. Though geopolitical conflicts, inflation and the effects of climate change continue to pose risks to supply chain operations, there are indications that the supply chain disruptions of recent years may be easing. By Jonny Bierman. To save on energy bills, firms will renovate buildings to prevent heating loss and implement digital solutions for temperature controls, shut off lighting and equipment when not in use, and replace less efficient outdated equipment. For example, quite a few food companies cant achieve net zero without having their suppliers (farmers) planting crops that are of no use for the company supply chain, but which capture CO2. Photo courtesy of Unilever. It is not enough to just claim that the products are better for the planet or more sustainable, if there is no arguable evidence behind these claims. In the Deloitte 2023 Global Human Capital Trends survey, 84% of respondents acknowledge that understanding the impact of sustainability on their organization and defining ownership for driving progress and outcomes is important to their organizations' success. Julia Binder, Professor of Sustainable Innovation and Business Transformation. Valuable flows of goods (such as food and commodities) and ecosystem services (such as the climate regulation that occurs when oceans and forests store carbon) support economic growth and human wellbeing. 19 April 2023 by Natalia Olynec, Julia Binder in Sustainability. In that publication, we suggested 2021 . For 2023, IMD experts have identified a series of sustainability trends that will drive further business transformation to create value, manage risks, and reconfigure industries and entire systems to ensure we respect our planetary boundaries and create a more inclusive and resilient economy. It appears increasingly challenging to meet the Paris Agreement goal to limit warming to 1.5 degrees to 2 degrees Celsius relative to preindustrial levels, as emissions should reach all-time highs in 2023. 2023 Euromonitor is privately owned & trademarked. Sustainability is good for business, and not just because it mitigates regulatory compliance risk. During COP15, the International Sustainability Standards Board (ISSB) announced that it will research the link between climate and nature. Both crises call for increased focus on energy efficiency and acceleration of investment in renewables, suggesting alignment. In fact, only 10% of global professionals consider that their company is very effective at communicating sustainability to consumers, according to Euromonitors Voice of the Industry: Sustainability Survey 2022. Automobile and fashion have had by far the heaviest adverse impacts on the environment and society, so actors operating in these two sectors have been ahead of the pack in reversing this trend. 5 Major Sustainability Trends For 2023 By Rachael O'Flaherty Sustainability requires us to reduce our impact on climate change in every way possible. Urging business leaders to think further ahead, these analysts predicted a carbon flip after an intensive period of innovation in climate mitigation technologies that is already under way, to be followed by roughly 20 years of implementation for scalable solutions and replacement of carbon-based technologies.. Therefore, 2023 will be crucial in building on the agreement by 175 countries in 2022 to establish a legally binding treaty to end plastic pollution. Powerful business networks. By their nature, they process huge amounts of data, and all those data centers carrying out storing and processing tasks require a lot of energy for cooling. Agribusinesses are particularly sensitive to water scarcity, leading to more expensive irrigation, crop damage and weak harvests, which may raise food security and supply concerns, already exacerbated by the Russia-Ukraine war. Workers increasingly demonstrate willingness to adjust the time and effort they dedicate to their job or leave their positions for new opportunities if workplace culture does not align with their values and expectations. Were seeing customers replace time-consuming, inaccurate manual approaches with a holistic steering and reporting solution like SAP Sustainability Control Tower. esgSubNav, Discover more about S&P Global's offerings, we think that adaptation will become as material as climate transition, call at COP27 for multilateral development banks. Organizational readiness for sustainable transformation, The next generation in family business will power data-driven sustainability, War and energy shortages accelerate adoption of energy efficiency and renewable energy. What are the new sustainability KPIs that are at the heart of your strategy execution? Also, several AI giants such as Google and Microsoft have already pledged to become carbon negative soon. In watches and jewellery, transformation started later, perhaps due to the longer life cycle of these products and their smaller volumes. By circulating products and materials, eliminating waste, and regenerating nature, circular models can help businesses to overcome some of the barriers to investment in sustainability, such as high costs, lack of internal knowledge, and implementation difficulties. This research is based on feedback from analysts and researchers across S&P Global. Collaborative systemic solutions require new approaches to fragility and call for alternative sources of capital to complement traditional grant funding. At any given time, we have at least one million green startups exploring new energy solutions. 2023 Sustainability Trend - Transition to Net-zero Countries and companies have taken responsibility for climate change and raised their carbon emissions reduction ambition. An opportunity lens on sustainability. The Intergovernmental Negotiating Committee (INC) will hold workshops over the course of 2023, with the aim of adopting the treaty in 2024. First, the world is searching for new solutions. We expect that 2023 will see significant attention paid to adaptation and resilience financing. Authors: Andrew Angle, Aiste Brackley, Justin Nelson, Laura Street, Mark Lee. Build your core leadership skills, accelerate your career and harness your full potential as a leader. ArtificiaI Intelligence, and specifically certain deep learning models such as those designed to process human language, requires huge amounts of energy. Luxury actors, traditionally fearless competitors, have come to realize that they need to collaborate to shift to positive impact. All content is available on the global site. AI: a friend and a foe for sustainability? Susan Goldsworthy, Affiliate Professor of Leadership, Communications and Organizational Change. Published May 1, 2023 + Follow As the world continues to grapple with environmental and social challenges, sustainable finance is becoming increasingly important. In the short term, businesses of all industries and sizes will look at energy-saving measures to reduce both costs and carbon emissions. Collaboration between government, financiers and innovators will be key to scale up these solutions. At COP15, the 2022 UN conference on biodiversity, leaders decided on our collective goals for the post-2020 global biodiversity framework and businesses advocatedfor mandatory biodiversity assessments and disclosures by 2030. Amanda Williams,Term Research Professor and Research Fellow. As we head out of COP27, many are disappointed to see climate deterioration going much faster than any governmental moves to address the crisis. Foodservice innovation drivers in 2023 include health and wellness, nostalgia, sustainability, and a desire for adventure. All rights reserved. A personalized transformation journey that teaches you how to unlock the full potential of your leadership. Via helps you navigate a fast-changing digital marketplace. The current approach to sustainability is underpinned by guilt. 5 Sustainability Trends in 2023 and Beyond 07 April 2023Save Article Save Article In recent years, sustainability has become an increasingly important issue for businesses and individuals alike. Along that path, they are now asking themselves if they could push even more and transform their supply chains to become CO2 negative, going beyond net zero. There is an urgent need for private capital to enter frontier markets to help solve systemic grand challenges. Carbon-negative means generating environmental benefits by removing more CO2 from the atmosphere than what is produced. Russias invasion of Ukraine disrupted energy supplies across Europe, creating energy insecurity, soaring costs, and a strong incentive for investment in renewable energy sources. Sustainable business is so much more than reporting carbon emissions. featured They are developing sustainable products and services and supply chain practices to increase revenue, satisfy investors and regulators, and improve their reputation. Executive teams will increasingly have to address these emotional challenges. The biodiversity challenge is closely intertwined with the climate crisis the consequences of climate change have negative consequences for the survival of vulnerable species and preserving biodiversity can help mitigate climate change. These include Scope 3 emissions, those which do not come from their own operations but from their larger value chain. Firms around the globe are shifting their focus on sustainability from talk to action. In turn, this has taken a heavy toll on the sea level rising, European glacier melting, and extreme weather events from . Asia as a key supplier of fossil fuels Russia, the world's largest fossil fuels exporter in 2021, has thrown global energy markets into turmoil by its invasion of Ukraine. At COP15, the 2022 UN conference on biodiversity, leaders decided on our collective goals for the post-2020 global biodiversity framework and businesses. The picture looks especially complicated in Europe, where new investment in liquefied natural gas and a slower phaseout of coal could challenge decarbonization plans. We know that sustainable fashion is high on our trend predictions for 2023, but what also featured in our research was the increased use of sustainable materials. Track existing and future opportunities to support critical decision-making across all functions within your organisation. Euromonitor International has identified five key trends affecting the global sustainability agenda in 2023. The EU Taxonomy came into force in 2020 but its first reporting provisions applied in 2022, and further disclosure requirements related to the Sustainable Finance Disclosure Regulation (SFDR) for financial market participants will become effective in 2023. In addition, ESG investors and rating agencies are holding firms accountable for their sustainability records. Plastic-Free Living It's no secret that plastic pollution is a major environmental issue. This push-and-pull dynamic could be a hallmark of sustainability discussions and decisions throughout 2023. But actions speak louder than wordsand progress in areas such as food sustainability and reversing deforestation has been mixed over the past year. Net Zero & Energy: The recent focus on scope 3, carbon credits and carbon removal is set to accelerate. Apr 26, 2023 (3BL Media via . Copyright The Economist Newspaper Limited 2023. In 2022, the U.S. stepped up the enforcement of laws aimed at restricting imports of goods believed to be made in whole or in part with forced labor. Within three years, they said 45% of G2000 organizations will operationalize integrated sustainability in the supply chain and effectively report impact data, enabling 10% reduction in waste and improving competitive advantage. In 2023, we think countries and companies will consider balancing energy security, affordability and the energy transition in a context of high inflation and rising interest rates. Policymakers and senior executives need to navigate the increasing complexity of simultaneous climate and cost-of-living crises. Under increasing SEC scrutiny, Forrester analysts expected public companies to anchor their sustainability goals with corporate policies aimed at driving environmentally sustainable behavior. IDC analysts predicted that by 2026, regulations and sustainability-linked lending will drive over 60% of global manufacturers to adopt product carbon footprint as a key metric to operationalize sustainability beyond reporting. To save on energy bills, firms will renovate buildings to prevent heating loss and implement digital solutions for temperature controls, shut off lighting and equipment when not in use, and replace less efficient outdated equipment. Some sectors, including utilities, oil and gas, and agribusiness, are more exposed to water stress than others and will face greater operating and financial challenges. Despite goods and services prices increasing globally, consumers sustainability awareness remains strong, with two thirds of global consumers worried about climate change, and also willing to play their part to positively impact the environment. The We Mean Business Coalition and the Voluntary Carbon Markets Integrity Initiative have continued moving towards better regulation and standards for carbon credits. From battery-powered cruise ships to aviation biofuel derived from microalgae. For the same reasons, we expect that company and investor lobbying activities will come under greater scrutiny to ensure that they are consistent with public commitments to both sustainability and fiduciary mandates. Research with more than 3,000 executives since April 2020 shows that between half and two-thirds of leaders say they are operating from a place of dis-ease rather than a position of well-being. Circular Economies: There will be momentum on tackling plastic and chemical pollution. Trends that were driving innovation before the COVID-19 pandemic may have stalled for the past couple of years, but many now appear to be making a comeback. Companies need data transparency with detailed precision along the entire value chain. Not only are they asking those questions, but they are also planning how to pay back the CO2 debt that the company has created since its creation.

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