These include Scope 3 emissions, those which do not come from their own operations but from their larger value chain. Take a scroll through our 2022 Annual and Sustainability reports. Climate change is driving water scarcity and more severe and frequent droughts, hampering agricultural production, food supplies and economies. If the current trend continues, the number of disasters could rise to 560 per year by 2030, up 40% from 2015. Following recent momentum, including that gathered during COP15, we believe policymakers, regulators, companies and investors will more explicitly look to factor biodiversity-related risks and opportunities into decision-making in 2023. These two events helped spotlight the links between two global environmental crises, climate change and biodiversity loss. A risk-focused mindset could be preventing businesses from developing the ambitious strategies they need to capitalize on the opportunities of sustainability 28 March 2023 by Etelle Higonnet in Sustainability. Through this process, leaders co-create the conditions where people can flourish amidst adversity. Article Promoting a strong employee experience can contribute to sustained competitiveness over the long term. The latest developments in sustainability, trends in bathroom design and the industry's innovations are the focus of the Pop Up My Bathroom trend showcase at ISH 2023.Established by the VDS and Messe Frankfurt, the trend platform for the bathroom sector hosted a large-scale exhibition and accompanying talk forum, both of which were aimed not just at the trades but at . Published May 1, 2023 + Follow As the world continues to grapple with environmental and social challenges, sustainable finance is becoming increasingly important. For example, carbon taxesas vital as they may be for meeting climate targetsmay continue to face a backlash as cash-strapped voters react adversely to the imposition of taxes during a recession (even if well-intentioned), particularly if these moves are perceived as a hidden government agenda to raise taxes. Additionally, these practices help them reduce their environmental footprint while saving costs associated with waste and resource and energy consumption. Curious about how we partner with you to help you solve your complex modern-day business problem? The MarketWatch News Department was not involved in the creation of this content. 19 hours ago by Winter Nie, Ivy Buche, Mahwesh Khan in Competitiveness, by Natalia Olynec Published 2 January 2023 in Sustainability 12 min read. We tend to think about collaboration as an external challenge but the key to success lies in redesigning organizations that can align incentives around impact and mobilize complementary resources to achieve it. Whether it is reducing waste, optimizing the supply chain, or eliminating emissions, insights from sustainability data can help to reach net-zero emissions. Confrontation was always seen as an essential weapon for campaigners, but a new era of cooperation is proving equally effective. Successful examples include multi-stakeholder platforms like the Global Commitment, 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. The COP27 climate conference was a mixed bag. We also think attention will shift to water ahead of the inaugural U.N. Water Conference in March 2023, where governments and other stakeholders will review the objectives of the International Decade for Action on Water for Sustainable Development, 2018-2028. Also, businesses should work with key stakeholders such as governments, suppliers, and competitors to build scale economies that allow the acceleration of the transition. AI: a friend and a foe for sustainability? 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. As it matures and evolves across asset classes and geographies, Andy Howard, Global Head of Sustainable Investment, considers the future of ESG and impact. I have ordered these by the five pillars of Economist Impacts Sustainability Project: Net zero is the ambition to reduce greenhouse-gas emissions as much as possible towards zero, and to counter any remaining emissions with carbon-negative solutions, whether nature-based (for example, planting trees or restoring mangroves) or technological (such as direct air capture). Climate change and associated topics such as water scarcity and biodiversity loss are likely to dominate stakeholder discussions, with long-term climate goals potentially reevaluated to address near-term urgencies. 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. Amanda Williams,Term Research Professor and Research Fellow. As sustainability has morphed from carbon emissions tracking into company-wide commitments to achieve global imperatives, organizations of all kinds find themselves in the business of creating a healthier world. 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. In 2022, McKinsey & Co. found that while total compensation remained important, other factors, including workplace flexibility and meaningfulness of work, have become more instrumental in many workers decisions to stay at or leave a job. On the other hand, the target of limiting the rise in global temperatures to 1.5 degrees Celsius above pre-industrial levels is barely alive. With this in mind, we think that adaptation will become as material as climate transition in terms of protecting lives, assets and the productive capacity of the economy over time. Less noticed is the messier and increasingly relevant fact that environmental, social, and governance (ESG) topics exist both inside and outside of investors' portfolio decisions. In a few years, almost all companies around the world will have adopted mandatory sustainability reporting standards either because they were obliged to by law or because they can no longer resist stakeholder pressures. In the report that follows, we outline nine trends we see rising in prominence in the sustainability landscape during 2023. But in the near term, if economic conditions continue to deteriorate and labor market resilience wanes, companies may face calls from investors to scale back more progressive workplace practices. In that journey, many are also realizing that it is impossible to achieve net zero without looking outside of their traditional business. 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. Progressive employment practices implemented in the wake of COVID-19 will be tested by cost-cutting related to economic uncertainty. Apr 26, 2023 (The Expresswire) -- 2023-2030According to our Latest Research,Sustainability Reporting Software . Collaboration between government, financiers and innovators will be key to scale up these solutions. Water is likely to play a central role on the global agenda in 2023 following major water-related disasters such as the floods in Pakistan and the droughts in Europe. From net zero to climate-positive supply chains, Many companies are working hard to meet net-zero sustainability targetsby 2050 or other target dates. Regulation. But actions speak louder than wordsand progress in areas such as food sustainability and reversing deforestation has been mixed over the past year. Track existing and future opportunities to support critical decision-making across all functions within your organisation. Sustainability Conferences to attend in 2023. As a result of COVID-19 and the intense competition for talent amid a period of exceptionally high employee turnover, employee expectations around health, well-being, culture, flexibility and benefits have evolved over the past two years. As a result, 91% of the global economy and 810 out of the 2,000 largest companies have pledged to net zero. 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. At the wake of the conflict that has stirred markets, Eco-Business rounds up six trends that could influence global sustainability in 2023. COP27 failed to achieve any major breakthroughs in areas such as phasing out fossil fuels. The new generation of business owners and leaders care deeply about the environment and are striving towards more sustainable and equitable business practices. Sustainability is good for business, and not just because it mitigates regulatory compliance risk. Leadership is about being positive and seeing opportunities, and we are living in a time where climate leadership is critically important. As we become more aware of the impact our actions have on the environment, there is a growing need to find ways to operate in a more sustainable way. The We Mean Business Coalition and the Voluntary Carbon Markets Integrity Initiative have continued moving towards better regulation and standards for carbon credits. The sustainability trends in 2023 are predicted to plunge beyond eco-friendliness. What are the new sustainability KPIs that are at the heart of your strategy execution? Follow this link to learn more about our cookie policy and how we use cookies. 1. Natalia Olynec is the Chief Sustainability Officer at IMD, where her work focuses on research, program development, strategy, governance, reporting and advisory. Can development organizations, governments, firms and private financial institutions work together with the humanitarian sector to fill the gap? Another trend in sustainability that's gaining traction in restaurants is eco-friendly packaging. 2. The EU taxonomy on sustainable activities will start to include the circular economy for the first time from January 1st 2023, thus accelerating the incorporation of circularity in the investment communitys scrutiny of corporate activities. Vanina Farber, elea Professor of Social Innovation, Patrick Reichert, Term Research Professor and Research Fellow. We believe that dynamic could change as companies adjust in the face of economic uncertainty and changing labor market dynamics. Prodded by consumer demands and impelled by increasingly stringent regulations, the business sector has taken notice and actions to create a more sustainable future. All too often, companies and business leaders are not getting any insights from ESG analyses, as they approach ESG reporting solely as a required disclosure exercise. Meanwhile, institutional investors under pressure to deploy capital are turning to still-developing voluntary carbon offset markets to meet climate commitments while continuing to finance assets and companies linked to fossil fuels. While policy and regulation play catch up, how will the financial sector, firms, and consumers step up to the challenge? In 2023, we believe more investors and companies will seek to assess the social and financial costs associated with water scarcity and droughts. Board members and top executives can make a choice today between just complying with the new standards and using this one-time change in mandatory reporting as an opportunity to prioritize sustainability even more as a key component of their strategies. 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. These include Scope 3 emissions, those which do not come from their own operations but from their larger value chain. Environmental, social, and corporate governance (ESG) standards and regulations are becoming a dominant force in how organizations operate, touching every part of the business. While policy and regulation play catch up, how will the financial sector, firms, and consumers step up to the challenge? 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. Scope 3 typically accounts for the vast majority of emissions, so reducing those that companies have direct control over (scope 1 and 2) can only go so far in reaching net zero. Surely thats progress that will help us breathe a little easier and live longer. However, they also face criticism because of their complexity and a continuing lack of global alignment. IDC analysts predicted by 2024, 30% of organizations will use ESG data management platforms to steer ESG KPIs through a centralized system of record for reporting purposes and real-time operational decision-making support. The U.S. Customs and Border Patrol is enforcing 55 active Withhold Release Orders and targeted over 3,500 inbound shipments from 2021 to 2022. 2022 Sustainability Trends Report. The Growth Summit 2023 is taking place on 2-3 May at the World Economic Forum's headquarters in Geneva, Switzerland. It will likely grow even more, especially in most of North America, Europe, and in fast-growing countries in the Asia-Pacific region and the Middle East. Recent research reinforces the link between increasing drought frequency and severity and climate change, which has made Northern Hemisphere droughts in summer 2022 at least 20 times more likely. All Trends Business Sustainability Our hand-picked collection of the top sustainability trends of 2023 & 2022. Download this insight brief to learn about the top eight ESG and sustainability trends you should expect to see in 2022 and beyond. April 28, 2023 . From 2023 we may see more second-hand, vintage and repurposing brands becoming central to the way we shop. More countries may make reporting under recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD) mandatory, such as New Zealand, Singapore and Switzerland, where the requirement comes into force in 2023. In watches and jewellery, transformation started later, perhaps due to the longer life cycle of these products and their smaller volumes. Discover our campus locations in Switzerland and Singapore. The challenge to reduce scope 3 emissions (ie, indirect emissions by suppliers or consumers in an organisations value chain) will accelerate in 2023 as companies focus on their supply-chain partners and on how their products and services are used by customers. Critical actions could accelerate the transition while enhancing energy affordability and supporting inclusive economic growth. An opportunity lens on sustainability. On the one hand, developed countries finally agreed to set up a loss and damage fund to compensate developing countries for the climate chaos that industrialised countries have mainly causedalthough there is no money in it, for now. 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. In June 2021, the International Organization of . Studies project further losses in biodiversity by midcentury due to changes in both land use and climate, absent transformative changes to economies. 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. What Recent Trends Say About Sustainable Shopping In 2023 More From Forbes Apr 27, 2023,10:15am EDT Embracing Humanity In The Age Of AI: The Importance Of Company Culture Apr 27,. Forrester expected five Fortune Global 200 firms to announce policies limiting travel for sustainability this year. 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. According to HolonIQ we already have 47 climate unicorns worth more than $1bn. 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. Unlock your purpose and create positive, lasting change in your career, organization and society. We believe that these initiatives, among others, will serve as catalysts for greater reflection by stakeholders about the impact, risks and opportunities associated with nature and biodiversity. , 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. It is not a question of whether, it is a question of when. Despite these headwinds, we continue to view that the sustainable debt market will help advance sustainability goals. However, the continued lack of a global climate finance taxonomy remains a challenge to bringing transparency and comparability to the space. This is why specific claims such as natural, organic, and vegan enjoyed outstanding momentum during 2021, according to Euromonitors Sustainability Opportunity Tracker. In 2023, we think continued geopolitical turmoil, persistent inflation, looming recession and worsening physical impacts of climate change will create new tensions between managing near-term risks and making meaningful progress on longer-term sustainability goals. The global trend of green buildings continues to rise even today. This is understandable in the face of competing metrics and reporting requirements and the resulting confusion but as with digital, geopolitics, or other specific areas of general impact, such roles have been limited to board work. The USA's Securities and Exchange Commission (SEC) has . 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. The State of Sustainability for Emerging Beauty. Unilever Hearts of Palm Ceviche. Setting up a loss and damage fund at COP27 was only the first step. With most models still at an experimental stage, a tougher challenge is spreading solutions globally. Although Forrester analysts expected at. Carbon-negative means generating environmental benefits by removing more CO2 from the atmosphere than what is produced. These are accelerating systems transformation by boosting multi-stakeholder innovation, thus reducing costs for players, surmounting obstacles, and advancing solutions adoption. Were seeing customers replace time-consuming, inaccurate manual approaches with a holistic steering and reporting solution like SAP Sustainability Control Tower. 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. Essentially a digital thread, passports will track the products carbon footprint, waste, liability and risk, and more, sharing information company-wide and with suppliers and regulatory agencies. Our experts offer actionable insights through first-person narratives, behind-the-scenes interviews and The Help Desk. 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. What's Next for Sustainable Business? 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. One of the main reasons for that is the cost-of-living crisis in many countries, exacerbated by the war in Ukraine and rising energy and food prices. How do you incentivize the C-level and senior managers? Our site uses cookies to improve functionality. With the right approach, everyone can be a winner. Meanwhile there are plenty of near-term business results from the sustainability wave. Progress on ESG goals can be encouraged by aligning compensation policies to the long-term impact that organizations have on financial, social, and environmental value creation. Be a part of a pioneering community. All rights reserved. If not, select "Manage Preferences" to learn more about managing your cookie preferences. Some facts are encouraging: So, there is a real case for a glass half full view on climate. Although Forrester analysts expected at least 10 companies to incur $5 million or more in greenwashing fines, the longer term outlook for meaningful environmental impact is far brighter. Otherwise, if emissions continue to rise, meeting Paris Agreement goals could entail greater and more costly decarbonization efforts. If you are happy with this select "Accept All". A total of 60% of family businesses with strong digital capabilities, surveyed by PwC in 2021, placed sustainability at the core of their daily operations. 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. Most companies struggle to measure scope 3 emissions, as they still need to work more closely with their suppliers. Or learn more about our privacy policy and how we use and store your data. 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. Source: Euromonitors Voice of the Industry: Sustainability Survey 2022. The need for stronger collaboration shines through the five key sustainability and climate trends I expect to see in 2023. To that end, here are the top sustainable living trends to watch in 2023. What kind of regulation forecast mechanism is needed to be prepared for changes in standard setting at different levels (ISSB, EU regulation, etc.)? Sharing emotions for healthy, sustainable high performance, Luxury developing sustainable supply chains, Board composition and responsibilities adapt to ESG purpose, Innovation, investment, and business transformation fuel climate hopes.