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. By Jonny Bierman. The 2023 Global Sustainable Development Report will be launched as the world approaches the half-way point of the 2030 Agenda and struggles to rebuild in the aftermath (or in the midst) of the COVID-19 pandemic. 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digital solutions for temperature controls, shut off lighting and equipment when not in use, and replace less efficient outdated equipment. Many restaurants now offer compostable containers and utensils that are much more eco-friendly than traditional plastic or styrofoam. Droughts impact major economies, including Europe, the U.S. and China, raising prices and creating potential food shortages that disproportionately impact the worlds most vulnerable communities. They have to act quickly as ESG frameworks and standards evolve, embedding into every business process sustainability metrics that are aligned with the company strategy, said Kaplan. In the longer term, this will likely lead to increased adoption of new types of energy and fuels. Thus, the need for sustainable trends will also possibly increase in 2023. The We Mean Business Coalition and the Voluntary Carbon Markets Integrity Initiative have continued moving towards better regulation and standards for carbon credits. Before we discuss the 2022 sustainability trends, we wanted to begin by reflecting on our 2021 edition and take stock of how our predictions played out. Here are the top six trends that are shaping a more sustainable future for our planet. 2023 CDFI Sustainable Investing Trends - MarketWatch 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. Published: April 26, 2023 at 10:09 a.m. The good news is that AI can also help with better conservation of natural resources through better prediction, managing agriculture yield or managing the demand and supply of energy in energy grids. 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. 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. In the short term, businesses of all industries and sizes will look at energy-saving measures to reduce both costs and carbon emissions. ESG and Climate Trends to Watch for 2023 - MSCI In the wake of the plastics treaty milestone, a new committee on chemicals was also set up. Log in here to join in the conversation with the I by IMD community. 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. That is the hardest part, as usually 90-99% of a companys greenhouse gas emissions are Scope 3. 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. Julia Binder, Professor of Sustainable Innovation and Business Transformation. The USA's Securities and Exchange Commission (SEC) has . 1. But we need to look beyond short-term benefits and keep an eye on the long-term implications of scaling AI too. Foodservice innovation drivers in 2023 include health and wellness, nostalgia, sustainability, and a desire for adventure. What makes a great leader? Gartner researchers said that customer expectations around environmental and social sustainability will apply to the entire product life cycle, predicting that buyers will speak with their wallets by purchasing only from companies and suppliers that demonstrate authentic achievement of commitments. The firm found that 67% of organizations intend to hold supply chain leaders accountable for defined environmental and social sustainability KPIs. 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. 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. A series of workshops under the Glasgow Sharm El-Sheikh Work Programme (GlaSS) during 2023 aims to pave the way for adoption of the framework at COP28 in Dubai in late 2023. April 13, 2023. These include Scope 3 emissions, those which do not come from their own operations but from their larger value chain. Carlos Cordon, Professor of Strategy and Supply Chain Management. With Scope 3 emission regulations on the rise, organizational leaders have realized the competitive value of connected data to track, report, and reduce climate impact. The impacts from climate change will not be evenly distributed, with lower- and lower-middle income countries more at risk than higher-income peers and less ready to cope. Policy incentives will also continue to emerge to stimulate innovation, help tackle climate change and fund the shift to clean energy. If you've had any better visions, let us know in the comments. By next year, IDC analysts predicted a quarter of organizations worldwide will demonstrate responsible leadership by increasing their sustainability-related digital technology spend by more than 25% from 2022 levels. In the US, the SEC is slated to enact more ESG regulations for investors, while the UK Plastic Packaging Tax is expected to transform global supply chains worldwide. 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. 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. Collaboration between government, financiers and innovators will be key to scale up these solutions. . 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. Being tech-savvy, the digital natives are willing to take a more data-driven approach in order to lead the way towards a net-zero future. 5 Sustainability Trends for Businesses in 2023. 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. Net-zero pledges have become mainstream in companies sustainability reports, as a way to demonstrate environmental commitment. While there is a degree of technical knowledge required, including integrated reporting methodologies and disclosure, there is the risk of a tick-box compliance focus that does not lever a real ESG identity. 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. Source: Euromonitors Voice of the Industry: Sustainability Survey 2022. Leadership is about being positive and seeing opportunities, and we are living in a time where climate leadership is critically important. 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. Considering all these pressures, its all too easy to stumble into the ESG reporting trap. 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. Sustainability Trends 2023 - What to expect? - LinkedIn As new sustainability disclosure standards come into effect around the globe, stakeholders will have to grapple with the complexity and potential challenges regarding alignment of these initiatives. Therefore, it is important for companies to align with international standards and get advice from experts, such as the United Nations or the Ellen MacArthur Foundation, to pave the way to efficient and impactful implementation. The final drafts of these standards should be adopted in 2023. Affordable sustainability There is unanimous agreement that 2023 will be a challenging year across global markets. Therefore, for companies to remain competitive and relevant in such fast-evolving sustainability environments, proactive collaboration with key stakeholders is crucial. 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. All Trends Business Sustainability Our hand-picked collection of the top sustainability trends of 2023 & 2022. 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. Tackling pollution from source to sea will be increasingly important. 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. 5 Sustainable Finance Trends to Watch in 2023 - LinkedIn 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. For example, the humanitarian sector is currently experiencing a $32.3bn shortfall between funding and what the UN says is needed. Sustainability and ESG in 2023 | Bain & Company From single-use water. Global Sustainable Development Report (GSDR) 2023 Brands that help consumers to adopt sustainable lifestyles will be better-positioned, and therefore preferred, when conscious consumers see increasing disposable incomes again. Sustainable business is so much more than reporting carbon emissions. 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. 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,. Given the current challenging economy, it is essential that companies keep abreast of sustainability trends as they evolve, and understand the direct impact on business performance to remain competitive. There is plenty of room for penetration in most markets, as the share of digital shelf remains low. Best Sustainability Conferences To Attend in 2023. Although Forrester analysts expected at. 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. High rates of inflation in many markets are causing the prices of many products to rise steeply. Key sustainability trends that will drive decision-making in 2023 Be a part of a pioneering community. 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. Top Sustainability Trends of 2023 - Glimpse Do you need charisma? 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. Visit our Sustainability page and Sustainability store for further insights. What are the new sustainability KPIs that are at the heart of your strategy execution? The past eight years are expected to become the eighth warmest on record, driven by rising greenhouse gas emissions and accumulated heat. At the wake of the conflict that has stirred markets, Eco-Business rounds up six trends that could influence global sustainability in 2023. For many years, sustainability has remained top of mind for food and beverage processors and consumers. 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. Renewables and Nuclear Hold Promise for Net Zero Energy. 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. 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. 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. Here are five of the hottest sustainability trends they identified, as well as how you can prepare for them. Join us for daily exercises focusing on issues from team building to developing an actionable sustainability plan to personal development. Sustainability Trends in 2023 for Businesses and Investors 5 Sustainability Trends in 2023 and Beyond - DHL Express NZ Growth Summit 2023: Here's what to expect | World Economic Forum 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. In June 2021, the International Organization of . 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. Fundamentally, if we take a long-term perspective, we will deal with climate change. With all the regulatory changes ahead, 2023 will be a year dominated by managing ESG risks. Take a scroll through our 2022 Annual and Sustainability reports. Carbon offsets have been criticized for. 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. 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. Collaborative systemic solutions require new approaches to fragility and call for alternative sources of capital to complement traditional grant funding. content Victoria Kemanian, Senior Advisor, Business Transformation Initiative. Private-public alignment is necessary to accelerate the transition towards circular models. We help businesses, policymakers, financiers, investors, NGOs and others achieve sustainability goals, faster. /esg/insights/featured/special-editorial/key-sustainability-trends-that-will-drive-decision-making-in-2023 According to the REN21 renewable energy community, we globally invested $366bn in renewables in 2021 alone. 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. 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. 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. 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. According to HolonIQ we already have 47 climate unicorns worth more than $1bn. According to new NielsenIQ survey data, 46% of consumers are looking to brands to take the lead on creating sustainable change. 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. 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. At Economist Impact we will continue to create momentum for building a sustainable ocean economy, at our World Ocean Summit in February/March and through the World Ocean Initiative. With most models still at an experimental stage, a tougher challenge is spreading solutions globally. Data in your Equity, Inclusion & Diversity strategy: friend or foe? If the current trend continues, the number of disasters could rise to 560 per year by 2030, up 40% from 2015. 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. Nevertheless, we think companies will be pressed in 2023 to invest more resources into managing the resilience and sustainability of their supply chains in the face of a more rigorous regulatory landscape governing corporate responsibility around the impact on human rights. But actions speak louder than wordsand progress in areas such as food sustainability and reversing deforestation has been mixed over the past year. 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. Policymakers and senior executives need to navigate the increasing complexity of simultaneous climate and cost-of-living crises. With the world continuing to emerge from Covid-19 lockdowns, cracks in economies, societies and environmental ambitions are becoming clearer. Enabling organizations to meet their learning objectives, in a more impactful, convenient and flexible way. Susan Goldsworthy, Affiliate Professor of Leadership, Communications and Organizational Change. Otherwise, if emissions continue to rise, meeting Paris Agreement goals could entail greater and more costly decarbonization efforts. Only limited material is available in the selected language. Mind the ESG reporting trap! 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. Here are our top 10 sustainability trends we're expecting to see gain momentum and define sustainability in 2023: 1. Discover our campus locations in Switzerland and Singapore. The Intergovernmental Negotiating Committee (INC) will hold workshops over the course of 2023, with the aim of adopting the treaty in 2024. 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. Moving to a cloud service provider that has made such commitments may help organizations reduce their own carbon footprint as well! From net zero to climate-positive supply chains 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.