In the report that follows, we outline nine trends we see rising in prominence in the sustainability landscape during 2023. In the short term, businesses of all industries and sizes will look at energy-saving measures to reduce both costs and carbon emissions. According to the REN21 renewable energy community, we globally invested $366bn in renewables in 2021 alone. 2022 was a hot year for the climate. COP27 has confirmed the need for stronger co-operation on key issues such as climate finance and corporate net-zero commitments. Firms are advised to get ahead of the game and start accounting for biodiversity. Protecting and restoring biodiversity under the Convention on Biological Diversity (CBD) has been on the agenda since 2020. And the EU looks to advance its own human rights due diligence directive and regulation restricting goods made with forced labor throughout 2023. 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. Private-public alignment is necessary to accelerate the transition towards circular models. From net zero to climate-positive supply chains Litigation risk has also given rise to a new trend named by some as "greenhushing", whereby companies may refrain from disclosing details of their sustainability goals and practices for fear of being penalized for the information released. 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. Affordable sustainability There is unanimous agreement that 2023 will be a challenging year across global markets. Established under the Paris agreement, the GGA aims to create an adaptation equivalent to the global mitigation goal of limiting the global temperature rise to 1.5C. However, meeting these objectives will require actors to undergo organizational transformation: NGOs will need to be receptive to more market-based approaches, governments will need to provide stable policies and backstop the riskiest initiatives, development finance institutions will need to identify opportunities to provide additionality (i.e., focus on interventions that would have not occurred without their participation), and corporates will need to be willing to collaborate with traditional non-market actors. A New Era for Sustainability Accountability Last year we saw an influx. These two events helped spotlight the links between two global environmental crises, climate change and biodiversity loss. While policy and regulation play catch up, how will the financial sector, firms, and consumers step up to the challenge? Sustainability and ESG in 2023. The Summit brings together leaders from business, government, civil society, and academia to shape a new future of work that is inclusive, sustainable, and equitable. We need a more constructive engagement between the US-led West and non-Western countries. We extract and organise ecommerce data from over 1,500 online retailers in 40 countries providing daily updates on pricing, assortment size and key attributes. 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. Develop fully customized programs that reflect the unique opportunities and challenges of your organization. 5 Major Sustainability Trends For 2023 By Rachael O'Flaherty Sustainability requires us to reduce our impact on climate change in every way possible. Despite this, biodiversity, essential to sustaining natural capital and ecosystem services, is declining. Be a part of a pioneering community. Ocean-related climate solutions will be crucial to making progress on global climate and nature targets in 2023, following the 2022 UN Ocean Conference. So it is urgent to accelerate our progress towards this objective. Circular solutions such as second-hand and previously owned products are also gaining traction amongst global consumers as, according to Euromonitors Voice of the Consumer: Sustainability Survey, fielded January to February 2022, 34% of global respondents mentioned their willingness to buy these products. These trends are expected to impact a wide range of stakeholders, from companies, investors and workers to communities, regulators and policymakers. Many companies will see an opportunity to accelerate the green energy transition, and the plans that were put in place before the war in Ukraine, as renewables become more cost competitive. , led by the Ellen McArthur Foundation and the United Nations Environment Program, through which 500 signatories such as Nestl, PepsiCo, Coca-Cola, Unilever, Mars, and LOral which together utilize 20% of all plastic packaging produced globally have committed to ensuring that all plastic packaging is reusable, recyclable, or compostable by 2025, among other circularity goals. 19 April 2023 by Natalia Olynec, Julia Binder in Sustainability. All Trends Business Sustainability Our hand-picked collection of the top sustainability trends of 2023 & 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. These macroeconomic and market conditions could constrain issuer appetite for GSSSB offerings. Lagging investments in the technologies and interventions needed to support adaptation are widening each year - up to $340 billion per year of adaptation finance is needed by 2030. Progressive employment practices implemented in the wake of COVID-19 will be tested by cost-cutting related to economic uncertainty. 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. Insights on Sustainability Article Toward a more orderly US energy transition: Six key action areas January 12, 2023 - The US drive to decarbonize is at an inflection point. Join us for daily exercises focusing on issues from team building to developing an actionable sustainability plan to personal development. Here are four key trends from the ERM Sustainability Institute's 2023 Trends Report that are driving this transition: Corporate ESG disclosure will become more standardized across geographies and sectors. Explore more than 75+ Executive Education programs at IMD. Underpinning all of the changes that are likely to take place in 2023 are various sustainable regulation packages being implemented by governments across the globe. Some facts are encouraging: So, there is a real case for a glass half full view on climate. Therefore, companies may face more scrutiny on appropriate board oversight and the maturity of their sustainability strategies and processes. This will require multi-stakeholder partnerships between the public and private sectors as well as among scientists, communities and consumers. Results-based climate finance was presented by the World Bank and others as an effective method to drive financing to projects that could generate such credits. While this tick-box approach demands an incredible amount of data, it does not provide insight on how to seize the enormous opportunities that the sustainable transformation will open up across all sectors. Prodded by consumer demands and impelled by increasingly stringent regulations, the business sector has taken notice and actions to create a more sustainable future. Corporate Learn more about incorporating sustainability into your business operations to help create a future with zero emissions, zero waste, and zero inequality. Boards leading on ESG drive the ESG culture of the board through its composition. Were seeing customers replace time-consuming, inaccurate manual approaches with a holistic steering and reporting solution like SAP Sustainability Control Tower. Critical actions could accelerate the transition while enhancing energy affordability and supporting inclusive economic growth. In 2022, the European Financial Reporting Advisory Group (EFRAG), the U.S. Securities and Exchange Commission (SEC) and the newly formed International Sustainability Standards Board (ISSB) drafted various proposals for disclosure standards relating to sustainability and/or climate-related issues. Despite these headwinds, we continue to view that the sustainable debt market will help advance sustainability goals. We forecast that total global bond issuance will increase modestly in 20231 as rate rises subside, but inflation risks remain, and global growth is set to stagnate or even tip into recession in some regions. GSSSBs will also face ongoing questions about the effectiveness of sustainable debt in helping companies reach their sustainability goals, particularly in the relatively new and growing sustainability-linked bond segment. In June 2021, the International Organization of . All rights reserved. According to Deborah Kaplan, global head of sustainability at SAP Customer Success, corralling and understanding tons of disparate data is the biggest challenge for organizations regardless of where they sit on the sustainability preparedness spectrum. 2023 Post-filing season update; Electric vehicle federal tax credit rules tightened as of April 18, 2023; If you've had any better visions, let us know in the comments. 5 Sustainability Trends for Businesses in 2023. Another trend in sustainability that's gaining traction in restaurants is eco-friendly packaging. Visit our Sustainability page and Sustainability store for further insights. When: April 28 Where: Cambridge, Mass., and virtual Cost: $12.51-$138.43 Where to register: https://sustainabilitysummit.mit.edu The MIT Sustainability Summit is a student-run event to demystify carbon markets for aspiring and current leaders. But, in order for circular models to succeed, there is a need for collaboration. For example, long-term energy transition goals will be weighed alongside nearer-term considerations such as energy affordability and security. If you are happy with this select "Accept All". However, organizational transformation and readiness is needed to push the boundaries of the problems that private capital can address and solve. In fact, 57% of global professionals mentioned their company is planning to develop products with carbon-neutral claims, according to Euromonitors Voice of the Industry: Sustainability Survey 2022, fielded January 2022. In 2023, we believe more investors and companies will seek to assess the social and financial costs associated with water scarcity and droughts. Inconsistent ESG data availability and quality hinder corporate ESG efforts and impact. In that journey, many are also realizing that it is impossible to achieve net zero without looking outside of their traditional business. 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. These include Scope 3 emissions, those which do not come from their own operations but from their larger value chain. In 2023, luxury players need to accelerate their decarbonization efforts by working on their Scope 3 emissions, and shift from a mindset of managing ESG risk to creating opportunities for strategic renewal and greater brand desirability through new purposeful and positive-impact business models. The sustainability trends in 2023 are predicted to plunge beyond eco-friendliness. Can development organizations, governments, firms and private financial institutions work together with the humanitarian sector to fill the gap? That said, we believe developing countries can only sustain so much debt to finance rising losses and lost revenues from physical climate risks. As a result, 91% of the global economy and 810 out of the 2,000 largest companies have pledged to net zero. Yet only 21% believe that their organizations are very ready to address such issues. This year's forecast of sustainability trends looks like the perfect storm (in a good way) of purpose-minded, yet business opportunity-led progress. 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. Most companies struggle to measure scope 3 emissions, as they still need to work more closely with their suppliers. Environmental catastrophes are becoming more frequent, so stricter regulations, such as extended producer responsibility (EPR), and waste management and recycling policies, are expected to be seen in more markets to channel efforts towards governments long-term sustainable targets. Five key ESG Credit Trends for 2023 identified by Sustainable Fitch: 1. Yet collaborations are difficult to orchestrate as they demand systemic changes in clear contrast with the linear and profit-driven mindset prevailing in business. The new generation of business owners and leaders care deeply about the environment and are striving towards more sustainable and equitable business practices. 4 Sustainable Travel Innovations Shaping the Future of the Tourism Industry. Luxury actors, traditionally fearless competitors, have come to realize that they need to collaborate to shift to positive impact. 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. They also involve measures to enhance the working environment, supply chain emissions, employee well-being, and ethical reporting. The State of Sustainability for Emerging Beauty. For example, the humanitarian sector is currently experiencing a $32.3bn shortfall between funding and what the UN says is needed. 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. Consequently, many companies introduced new incentive structures, benefits, workplace culture initiatives (flexible work, DEI strategies and efforts to improve work-life balance) and career development opportunities to promote the employee experience and better attract and retain talent. But we need to look beyond short-term benefits and keep an eye on the long-term implications of scaling AI too. The USA's Securities and Exchange Commission (SEC) has . This interconnected challenge presents a timely opportunity for companies that are getting serious about ambitious climate targets to account for nature and biodiversity protection in their climate targets as a means to net zero. Discover more than 130,000 executives who are IMD alumni. In the period 2021-2022, product packaging and product claims rose 6.0 and 2.4 percentage points respectively in the share of global respondents, as efficient ways for businesses to communicate sustainability and improve their brand positioning.
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