The increasing risk of environmental, social and governance (ESG)-related litigation, including over sustainability disclosure, will be another challenge for companies and investors to navigate. 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. Brands that help consumers to adopt sustainable lifestyles will be better-positioned, and therefore preferred, when conscious consumers see increasing disposable incomes again. Yet collaborations are difficult to orchestrate as they demand systemic changes in clear contrast with the linear and profit-driven mindset prevailing in business. Key insights such as 'The Future of Jobs' report will map . Sustainability Conferences to attend in 2023. 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. 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. Therefore, companies may face more scrutiny on appropriate board oversight and the maturity of their sustainability strategies and processes. 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. Be a part of a pioneering community. Collaboration within and outside ecosystems in circular economy solutions is central to unlock benefits that organizations cannot achieve on their own. 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. Gartner Identifies the Top 10 Strategic Technology Trends for 2023 Susan Goldsworthy, Affiliate Professor of Leadership, Communications and Organizational Change. 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. In June 2021, the International Organization of . This years forecast of sustainability trends looks like the perfect storm (in a good way) of purpose-minded, yet business opportunity-led progress. 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. April 13, 2023. Many restaurants now offer compostable containers and utensils that are much more eco-friendly than traditional plastic or styrofoam. Were seeing customers replace time-consuming, inaccurate manual approaches with a holistic steering and reporting solution like SAP Sustainability Control Tower. There is unanimous agreement that 2023 will be a challenging year across global markets. The proposals from the ISSB, EFRAG and SEC all use the TCFD framework as a reference for climate-related issues, but differences remain in their specific requirements and how they treat wider sustainability issues. Confrontation was always seen as an essential weapon for campaigners, but a new era of cooperation is proving equally effective. 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. But actions speak louder than wordsand progress in areas such as food sustainability and reversing deforestation has been mixed over the past year. In January, Sherry Frey, VP of Wellness at NIQ hosted our annual Look Ahead Webinar covering the top wellness trends to watch in 2023. Finally, our companies are transforming. 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. Surely thats progress that will help us breathe a little easier and live longer. 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. One main driver for this is the next generation of family owners. Forrester expected five Fortune Global 200 firms to announce policies limiting travel for sustainability this year. Firms are advised to get ahead of the game and start accounting for biodiversity. That said, we believe developing countries can only sustain so much debt to finance rising losses and lost revenues from physical climate risks. Boards leading on ESG drive the ESG culture of the board through its composition. Our site uses cookies to improve functionality. Corporates investing in their own energy generation may find projects cost more in the short term. 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. Net-zero pledges have become mainstream in companies sustainability reports, as a way to demonstrate environmental commitment. The We Mean Business Coalition and the Voluntary Carbon Markets Integrity Initiative have continued moving towards better regulation and standards for carbon credits. Sustainability Trends 2023 | Predictions for Business, People, B2B & B2C I by IMD is produced by the Institute for Management Development, Unleashing the Power of Data and Digital Ecosystems (Management on the Cutting Edge), Lifelong learning. Transform Your Innovation Strategy with Megatrends, Earth Day 2023: Now Is the Time to Take Climate Action, Plant-Based Products Boost Sustainability in Asia Pacific, Retailer Corporate Strategies in Private Label. Building on the visibility of nature-based climate solutions at COP26, there was an enhanced profile for nature at COP27 too. In addition, ESG investors and rating agencies are holding firms accountable for their sustainability records. Policy incentives will also continue to emerge to stimulate innovation, help tackle climate change and fund the shift to clean energy. What are material sustainability issues for your company above the standard setters guidelines? Our work on water stress in Jordan highlights the need for resilience. 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. Source: Euromonitors Voice of the Industry: Sustainability Survey 2022. Join Team IMD. 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. 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 . 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. 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. 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. Within three years, these analysts said ESG performance will be viewed as a top three decision factor for IT equipment purchases; over 50% of RFPs will include metrics regarding carbon emissions, material use, and labor conditions. This important theme will continue into 2023, with the annual meeting of the World Economic Forum in Davos focusing on "Co-operation in a Fragmented World". In the report that follows, we outline nine trends we see rising in prominence in the sustainability landscape during 2023. Policymakers and senior executives need to navigate the increasing complexity of simultaneous climate and cost-of-living crises. 2. Some nations loosened restrictions on operating coal-fired power plants, while others extended the lives of coal and nuclear power plants. From battery-powered cruise ships to aviation biofuel derived from microalgae. Empowering senior teams to identify opportunities for growth and transformation. These macroeconomic and market conditions could constrain issuer appetite for GSSSB offerings. In addition, products carrying carbon-neutral/reduced carbon claims globally increased by 38% during 2020/2021, according to Euromonitors Sustainability Opportunity Tracker (15 countries in seven industries). 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. The provisional agreementin the EU for new regulation for deforestation-free supply chain will mean many companies will have to better understand biodiversity risk. Therefore, communicating sustainability through specific claims will still open up opportunities for companies to penetrate and improve their positioning in 2023. Leadership is about being positive and seeing opportunities, and we are living in a time where climate leadership is critically important. This could help maintain investment momentum in key technologies and ultimately deliver a faster energy transition with increased energy security for countries and companies alike. Copyright The Economist Newspaper Limited 2023. 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. To that end, here are the top sustainable living trends to watch in 2023. New regulations drive sustainability strategy. The need for stronger collaboration shines through the five key sustainability and climate trends I expect to see in 2023. Learn more about our world-class faculty team. Grow your network and explore the latest thinking on todays critical business challenges and opportunities. Storytelling and expertise from marketers, SAP BrandVoice: Green Customer Experiences Drive Ongoing Growth For Midsize Businesses. Here are five of the hottest sustainability trends they identified, as well as how you can prepare for them. Collaboration will also be needed to accelerate the building of circular economies. ET. Studies project further losses in biodiversity by midcentury due to changes in both land use and climate, absent transformative changes to economies. 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. Access and download reports and data purchased through Euromonitor.com. Otherwise, if emissions continue to rise, meeting Paris Agreement goals could entail greater and more costly decarbonization efforts. If not, select "Manage Preferences" to learn more about managing your cookie preferences. Private-public alignment is necessary to accelerate the transition towards circular models. 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. Protecting and restoring biodiversity under the Convention on Biological Diversity (CBD) has been on the agenda since 2020. 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. Here are the top six trends that are shaping a more sustainable future for our planet. 5 Sustainability Trends for Businesses in 2023. Renewables and Nuclear Hold Promise for Net Zero Energy. 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. Apr 26, 2023 (The Expresswire) -- 2023-2030According to our Latest Research,Sustainability Reporting Software . 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. 2023 CDFI Sustainable Investing Trends. What's Next for Sustainable Business? 2022 Sustainability Trends - ERM 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. 27 April 2023 by Frederic Barge, Karl Schmedders in Sustainability. . By next year, IDC analysts predicted 80% of G2000 companies will capture their carbon data and report their enterprise-wide carbon footprint using quantifiable metrics compared with 50% today. Prodded by consumer demands and impelled by increasingly stringent regulations, the business sector has taken notice and actions to create a more sustainable future. How do you inspire your team? 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. Economist Impact, through its Back to Blue Initiative, has put a spotlight on the need to tackle chemical pollution. Sustainability and ESG in 2023 | Bain & Company The MarketWatch News Department was not involved in the creation of this content. More Sustainable Materials. 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). They place them all on the wall, acknowledging and accepting them. 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. The Growth Summit 2023 is taking place on 2-3 May at the World Economic Forum's headquarters in Geneva, Switzerland. Our experts offer actionable insights through first-person narratives, behind-the-scenes interviews and The Help Desk. This will require multi-stakeholder partnerships between the public and private sectors as well as among scientists, communities and consumers. Unlock your purpose and create positive, lasting change in your career, organization and society. 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. The three trends IEEE Standards Association (IEEE SA) expects to see in 2023 in the energy sector pertain to the following topics: changing electric infrastructure, the water-energy nexus, and more broadly, energy efficiency. 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. 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. High rates of inflation in many markets are causing the prices of many products to rise steeply. Growing Sustainable Beauty Trends for Emerging Brands in 2023 Proactively using renewable energy, reducing waste and reusing materials will not only help companies to be ahead of legislation, but also demonstrate their interest in being part of the solution. 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. Although the number of climate-related deaths has decreased threefold in the last 50 years thanks to early warning systems and better disaster management and preparedness, climate-related disasters are now nearly five times as frequent, according to the World Meteorological Organization. As we head out of COP27, many are disappointed to see climate deterioration going much faster than any governmental moves to address the crisis. 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. Euromonitor International has identified five key trends affecting the global sustainability agenda in 2023. Meanwhile, new human rights regulations will introduce additional requirements for company supply chain management. 5 Hottest Sustainability Trends For 2023 + How You Can Prepare For Them The Russian attack on Ukraine and subsequent surge of refugees, growing inflation, and lingering concerns about the COVID-19 pandemic also raise doubts about governments ability to ensure an inclusive society. Carbon-negative means generating environmental benefits by removing more CO2 from the atmosphere than what is produced. In 2023, we believe more investors and companies will seek to assess the social and financial costs associated with water scarcity and droughts. Here's our breakdown of some of the biggest sustainability trends impacting retail in 2023: Greater transparency, increased regulation Focus on improving delivery to reduce the carbon footprint Rise of the circular economy Eco-friendly, fair workplaces Ethical supply chain Growing role of data and AI in sustainability efforts Here are our top 10 sustainability trends we're expecting to see gain momentum and define sustainability in 2023: 1. 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. 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. Top Digital Sustainability Trends In 2023 | Kitcast Blog Along that path, they are now asking themselves if they could push even more and transform their supply chains to become CO. negative, going beyond net zero. 6 trends that will shape sustainability in 2023 | News | Eco-Business
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