sustainability trends 2023

That said, we believe developing countries can only sustain so much debt to finance rising losses and lost revenues from physical climate risks. Susan Goldsworthy, Affiliate Professor of Leadership, Communications and Organizational Change. The latest biodiversity COP (or COP15) in Montreal discussed this new framework, but the hard work starts now: 2023 will see rising global scrutiny and collaboration to ensure momentum towards the new nature milestones for 2030. mandatory biodiversity assessments and disclosures by 2030. Regulatory trends point to a hardening of what were largely voluntary frameworks for how companies manage human rights in their upstream operations. But that wasnt really the expectation at what was dubbed an implementation COP, where the focus was on how to turn pledges and commitments into real-world actions and solutions. Brief. Girod, Professor of Strategy and Organizational Innovation. For years now, car makers like Porsche have been working on their shift to electrical power traction, while Kering started its journey towards decarbonization in 2012, introducing along the way the first Environmental Profit & Loss account in luxury fashion and sharing its methodology so that other companies can learn from it and use it as a model. These include Scope 3 emissions, those which do not come from their own operations but from their larger value chain. 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. Or learn more about our privacy policy and how we use and store your data. Leadership is about being positive and seeing opportunities, and we are living in a time where climate leadership is critically important. Firms are advised to get ahead of the game and start accounting for biodiversity. 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. These are accelerating systems transformation by boosting multi-stakeholder innovation, thus reducing costs for players, surmounting obstacles, and advancing solutions adoption. 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. Net Zero & Energy: The recent focus on scope 3, carbon credits and carbon removal is set to accelerate. Sustainability Conferences to attend in 2023. Source: Euromonitors Voice of the Industry: Sustainability Survey 2022. Heres a summary of their investment priorities. Be a part of a pioneering community. 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. With most models still at an experimental stage, a tougher challenge is spreading solutions globally. 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. The EU took a leadership position in creating the fund, but now it must be operationalised and made viable. 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,. That is the hardest part, as usually 90-99% of a companys greenhouse gas emissions are Scope 3. The global green, social, sustainability and sustainability-linked bond (GSSSB) market in 2022 did not reach the highs set in 2021, as rising interest rates and the risk of recession in many parts of the world sidelined debt issuers. A fully online experience that takes you on an in-depth exploration of topics that matter to you. 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. We expect that 2023 will see significant attention paid to adaptation and resilience financing. April 13, 2023. Key insights such as 'The Future of Jobs' report will map . During COP15, the International Sustainability Standards Board (ISSB) announced that it will research the link between climate and nature. And the EU looks to advance its own human rights due diligence directive and regulation restricting goods made with forced labor throughout 2023. Knut Haanaes, Professor of Strategy and Lundin Chair Professor of Sustainability. estimated that the transition to net zero alone will provide business opportunities of $12trn per year. These price increases are leading to renewed interest in, The global market for consumer health continues to be influenced by the pandemic, leading to tepid real growth in 2022. One such law, the German Supply Chain Due Diligence Act, goes into effect in January 2023 and requires covered companies to conduct human rights and environmental due diligence to identify risks, remedy issues and establish grievance mechanisms, among other things. Many corporate leaders find sustainability also helps deepen their organizations sense of purpose to engage and retain a new generation of employees. More Sustainable Materials. They place them all on the wall, acknowledging and accepting them. 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. If not, select "Manage Preferences" to learn more about managing your cookie preferences. 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. It simplifies data visibility, allowing companies to record, report, and act on quality data across the value chain with built-in assurance and audit capabilities.. Discover all upcoming events for IMD alumni! 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. All rights reserved. Most companies struggle to measure scope 3 emissions, as they still need to work more closely with their suppliers. An opportunity lens on sustainability. Thank you to all our colleagues across S&P Global who contributed to this research: Laurence Allen, Rameez Ali, Marion Amiot, Giacomo Bareato, Corinne Bendersky, Erin Boeke Burke, Beth Burks, Carlos Cardenas, Bernard de Longevialle, Florence Devevey, Alexandra Dimitrijevic, Jaspreet Duhra, Silvia Favasuli, Michael Ferguson, Rita Ferreira, Taos Fudji, Pierre Georges, Lotte Griek, Lapo Guadagnuolo, Bertrand Jabouley, Roman Kramarchuk, Raoul LeBlanc, Gregg Lemos-Stein, Rick Lord, Tom Lowenstein, Matt MacFarland, Rose Marie Burke, Mary Minton, Matthew Mitchell, Anna Mosby, Karl Nietvelt, Laurent Ruseckas, Francesca Sacchi, Jamie Salo, Roberto Sifon-arevalo, Michael Stoppard, Vijay Subramanian, Priya Suvarna, Cornelis theunis Van der lugt, Kieran Trevor, Barbara Velado, Emmanuel Volland, Ken Wattret, Nora Wittstruck, Xizhou Zhou. 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.. Our global experts keep pace with sustainability trends providing timely insights on shifting consumer preferences and the latest innovations, strategies and investments shaping governments and business agendas. Published May 1, 2023 + Follow As the world continues to grapple with environmental and social challenges, sustainable finance is becoming increasingly important. 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. With challenges such as global economic, The pandemic, cost-of-living crisis and high inflation continue to have an unprecedented impact on affluent consumers, their wealth, and their shopping habits. With Scope 3 emission regulations on the rise and continuously changing, organizational leaders have realized the value of connected data to track, report, and reduce climate impact. 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. Sustainability-linked bond issuance fell sharply over the second half of 2022 as investors raised concerns about issuer ambitions and incentives to achieve sustainability targets. Since 2019, the number of people affected by food shortages has more than doubled to 345 million, roughly 4% of the world population, from 135 million, as reported by the World Food Programme. In the report that follows, we outline nine trends we see rising in prominence in the sustainability landscape during 2023. Collaboration will also be needed to accelerate the building of circular economies. Climate change is driving water scarcity and more severe and frequent droughts, hampering agricultural production, food supplies and economies. Our consulting team answers your commercial questions with data and insights generated by our research experts, industry knowledge and 1,200 on-the-ground analysts in 100 developed, emerging and frontier markets. The call at COP27 for multilateral development banks to scale up the use of blended finance to attract more private capital, and the push to boost adaptation finance, will underscore how GSSSBs can contribute to closing the climate finance gap. Here is a preview of a few of Forrester's 2023 predictions for sustainability: Carbon offsets and credits will be back in fashion but with less fraud. Of particular note was how consumers are approaching healthy living in the Beauty & Personal Care category. The final drafts of these standards should be adopted in 2023. Economist Impact, through its Back to Blue Initiative, has put a spotlight on the need to tackle chemical pollution. 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. Yet only 21% believe that their organizations are very ready to address such issues. ET. More than 40,000 species are at risk of extinction in the coming decades, according to the UN progress report on the Sustainable Development Goals released in July 2022. Therefore, companies may face more scrutiny on appropriate board oversight and the maturity of their sustainability strategies and processes. Learn more about incorporating sustainability into your business operations to help create a future with zero emissions, zero waste, and zero inequality. They also involve measures to enhance the working environment, supply chain emissions, employee well-being, and ethical reporting. If the current trend continues, the number of disasters could rise to 560 per year by 2030, up 40% from 2015. 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. Beyond capturing new markets, transforming your business towards sustainability is also a way to address changing customer and investor needs, as well as to attract and retain talent. Inconsistent ESG data availability and quality hinder corporate ESG efforts and impact. Lead authors: Lai Ly, Global Head of ESG Research, S&P Global Ratings | Lindsey Hall, Head of ESG Thought Leadership, S&P Global Sustainable1 Co-authors: Bruno Bastit, Terry Ellis, Paul Munday, Bruce Thomson, and Dennis Sugrue, S&P Global Ratings; Esther Whieldon and Jennifer Laidlaw, S&P Global Sustainable1 This report neither addresses views about credit ratings on individual entities nor constitutes a rating action. What kind of regulation forecast mechanism is needed to be prepared for changes in standard setting at different levels (ISSB, EU regulation, etc.)? yk Ik, Professor of Digital Strategy and Cybersecurity. The sustainability trends in 2023 are predicted to plunge beyond eco-friendliness. Protecting and restoring biodiversity under the Convention on Biological Diversity (CBD) has been on the agenda since 2020. According to HolonIQ we already have 47 climate unicorns worth more than $1bn. The current approach to sustainability is underpinned by guilt. 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. 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. Yet collaborations are difficult to orchestrate as they demand systemic changes in clear contrast with the linear and profit-driven mindset prevailing in business. Another trend in sustainability that's gaining traction in restaurants is eco-friendly packaging. 6. Expectations are growing for business to play a proactive role in driving efforts to secure a sustainable and inclusive future for the next generation. We are the independent guide to sustainability, helping our audience cut through the noise and supporting them as they achieve sustainability goals and reach outcomes with actual business value. The durability of sustainable employment practices, implemented in recent years in response to significant shifts in workforce expectations, will be challenged by recessionary risks in many markets. Apr 26, 2023 (The Expresswire) -- 2023-2030According to our Latest Research,Sustainability Reporting Software . 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. But actions speak louder than wordsand progress in areas such as food sustainability and reversing deforestation has been mixed over the past year. Surely thats progress that will help us breathe a little easier and live longer. This push-and-pull dynamic could be a hallmark of sustainability discussions and decisions throughout 2023. Mind the ESG reporting trap! Harnessing collaboration to enable the circular economy, Successful examples include multi-stakeholder platforms like the. Sustainable solutions can, and should, be affordable, so consumers do not struggle when seeking more conscious habits. . The UK also intends to bring forward sustainability-related disclosure requirements at the entity and product level. Considering all these pressures, its all too easy to stumble into the ESG reporting trap. This was billed as the first Africa COP, and a focus on developing-country issues, as well as the agreement on loss and damage, illustrated the vital need for inclusive communities and considering the impact of climate on the most vulnerable communities. Storytelling and expertise from marketers, SAP BrandVoice: Green Customer Experiences Drive Ongoing Growth For Midsize Businesses. In June 2021, the International Organization of . Consumers still want to positively impact the environment, and expect companies to play their part in democratising sustainability; therefore, understanding the sustainability landscape will help companies to identify risks and seize new opportunities. An infographic based on the latest Climate Watch data highlights that energy usage contributes to 73.2% of global greenhouse gas emissions. Our work on water stress in Jordan highlights the need for resilience. Both crises call for increased focus on energy efficiency and acceleration of investment in renewables, suggesting alignment. The State of Sustainability for Emerging Beauty. With the right approach, everyone can be a winner. In 2023, we believe sustainability initiatives could be tested by persistent inflation and economic uncertainty. Sustainable business is so much more than reporting carbon emissions. 19 hours ago by Winter Nie, Ivy Buche, Mahwesh Khan in Competitiveness, by Natalia Olynec Published 2 January 2023 in Sustainability 12 min read. 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. These new rules and disclosure standards aim to enhance transparency and consistency on sustainability-related issues and mitigate the risk of misrepresentation, perceived as greenwashing, in financial markets. The market for carbon credits will continue to evolve in 2023. 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. The top strategic technology trends for 2023 are: Sustainability Sustainability traverses all of the strategic technology trends for 2023. MIT Sustainability Summit. 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. A personalized transformation journey that teaches you how to unlock the full potential of your leadership. Outlook 2023, Sustainability: five trends to watch. The Growth Summit 2023 is taking place on 2-3 May at the World Economic Forum's headquarters in Geneva, Switzerland. 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. In 2022, Cartier and Kering formed the Watch & Jewellery Initiative 2030 which, like the Fashion Pact, aims to drive progress on sustainability in its sector. Supporting organizations with talent assessment, development and leadership progression. 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. This will require multi-stakeholder partnerships between the public and private sectors as well as among scientists, communities and consumers. Visit our Sustainability page and Sustainability store for further insights. Corporate In fact, a recent study by McKinsey estimated that the transition to net zero alone will provide business opportunities of $12trn per year. One main driver for this is the next generation of family owners. In addition to more grants, concessional loans and equity, we foresee growing interest in innovative financing instruments, including debt-for-climate swaps, where debtor countries divert payments into adaptation and resilience projects and dedicated adaptation and resilience bonds. In addition to more substantial legal, operational, reputational and financial consequences of violations, companies may need to consider costs associated with adapting their sourcing models and managing higher input and production prices. If you've had any better visions, let us know in the comments. 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. 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. Foodservice innovation drivers in 2023 include health and wellness, nostalgia, sustainability, and a desire for adventure. Join Team IMD. Russias invasion of Ukraine disrupted energy supplies across Europe, creating energy insecurity, soaring costs, and a strong incentive for investment in renewable energy sources. In 2023, we believe more investors and companies will seek to assess the social and financial costs associated with water scarcity and droughts. In turn, this has taken a heavy toll on the sea level rising, European glacier melting, and extreme weather events from . How do you incentivize the C-level and senior managers? The social dimension of the challenges of climate change, climate action and sustainability has often been an after-thought, but in 2023 this dimension will rise further up the sustainability agenda. In that journey, many are also realizing that it is impossible to achieve net zero without looking outside of their traditional business. April 28, 2023 . In order for companies to return to the environment more than they take from it, circular models are needed, as they provide resilient solutions with a triple impact on businesses, people, and the environment. /esg/insights/featured/special-editorial/key-sustainability-trends-that-will-drive-decision-making-in-2023 From net zero to climate-positive supply chains 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. Peter Vogel, Professor of Family Business and Entrepreneurship, Ivan Miroshnychenko, Research Fellow and Term Research Professor. The IMD Alumni Network is a widespread but close-knit global community in a tightly interconnected and complex business environment. Our site uses cookies to improve functionality. 2. 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. COP27 has confirmed the need for stronger co-operation on key issues such as climate finance and corporate net-zero commitments. 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. But, in order for circular models to succeed, there is a need for collaboration. Private-public alignment is necessary to accelerate the transition towards circular models. 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. In the wake of the plastics treaty milestone, a new committee on chemicals was also set up. Economist Impacts Martin Koehring highlights why stronger collaboration will be required to accelerate progress in 2023, Head, World Ocean Initiative & Senior Manager, Sustainability at Economist Impact. We will go through the whole energy transition, and we will build a circular economy. The provisional agreementin the EU for new regulation for deforestation-free supply chain will mean many companies will have to better understand biodiversity risk. Collaboration between government, financiers and innovators will be key to scale up these solutions. 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. 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. Against a backdrop . In 2023, we believe companies and investors will have to prepare for reporting under a number of new and complex sustainability disclosure standards and adapt as they continue to evolve. For many years, sustainability has remained top of mind for food and beverage processors and consumers. These instruments will have to increasingly address investor questions about the effectiveness of targets and incentives. , 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.
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