Leadership is about being positive and seeing opportunities, and we are living in a time where climate leadership is critically important. While most cases have been against companies and investors for not doing enough on climate issues, we have seen an increase in lawsuits pushing back against ESG-related work or investment policies. 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. Go on - they only take five minutes. Collaboration will also be needed to accelerate the building of circular economies. 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 while the costs of deploying solar have increased, these should start declining and have been relatively small compared to European natural gas price increases, which have risen nearly eight times higher over the past two years. The need for stronger collaboration shines through the five key sustainability and climate trends I expect to see in 2023. 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. While policy and regulation play catch up, how will the financial sector, firms, and consumers step up to the challenge? 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. In 2023, we think broader market conditions will continue to influence GSSSB issuance. The sustainability trends in 2023 are predicted to plunge beyond eco-friendliness. Companies have been struggling to communicate sustainability to consumers. 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. Key insights such as 'The Future of Jobs' report will map . This research is based on feedback from analysts and researchers across S&P Global. 2. This will require multi-stakeholder partnerships between the public and private sectors as well as among scientists, communities and consumers. Plastic-Free Living It's no secret that plastic pollution is a major environmental issue. Log in here to join in the conversation with the I by IMD community. Discover all upcoming events for IMD alumni! There is unanimous agreement that 2023 will be a challenging year across global markets. Euromonitor International has identified five key trends affecting the global sustainability agenda in 2023. Net-zero pledges have become mainstream in companies sustainability reports, as a way to demonstrate environmental commitment. 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. As we head out of COP27, many are disappointed to see climate deterioration going much faster than any governmental moves to address the crisis. 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. MSc in Sustainable Management & Technology, Executives-in-Residence & Executive Fellows. Private-public alignment is necessary to accelerate the transition towards circular models. Boards leading on ESG drive the ESG culture of the board through its composition. Amanda Williams,Term Research Professor and Research Fellow. 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. A personalized transformation journey that teaches you how to unlock the full potential of your leadership. Finally, our companies are transforming. 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. 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. At the wake of the conflict that has stirred markets, Eco-Business rounds up six trends that could influence global sustainability in 2023. Curious about how we partner with you to help you solve your complex modern-day business problem? This has been reflected in more litigation, with an increasing number of climate-related lawsuits against corporates. 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. Whether it is reducing waste, optimizing the supply chain, or eliminating emissions, insights from sustainability data can help to reach net-zero emissions. 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. We need a more constructive engagement between the US-led West and non-Western countries. Today, we have at least 13,000 large and medium-sized companies in Europe transitioning towards more sustainable operations by disclosing their climate footprint. COP27 failed to achieve any major breakthroughs in areas such as phasing out fossil fuels. At COP15, the 2022 UN conference on biodiversity, leaders decided on our collective goals for the post-2020 global biodiversity framework and businesses. One main driver for this is the next generation of family owners. This shift has been fueled by increasing energy insecurity, rapidly changing regulatory and reporting standards, and investor appetite for environmental, social and governance (ESG) performance. Storytelling and expertise from marketers, SAP BrandVoice: Green Customer Experiences Drive Ongoing Growth For Midsize Businesses. Carlos Cordon, Professor of Strategy and Supply Chain Management. 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. 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. Forrester expected five Fortune Global 200 firms to announce policies limiting travel for sustainability this year. 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. 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. 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. Stphane J.G. 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. Russias invasion of Ukraine disrupted energy supplies across Europe, creating energy insecurity, soaring costs, and a strong incentive for investment in renewable energy sources. Our site uses cookies to improve functionality. content In the wake of the plastics treaty milestone, a new committee on chemicals was also set up. 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. The UK also intends to bring forward sustainability-related disclosure requirements at the entity and product level. Unlock your purpose and create positive, lasting change in your career, organization and society. 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. Download Transcript (PDF, 106 KB) The large-scale trends shaping the ESG investing world have become well recognized: Climate change risk and the road to net zero, the growing existential threat of biodiversity loss, social inequalities, regulation and, lately, debate and controversy over greenwashing and what ESG should be. According to the REN21 renewable energy community, we globally invested $366bn in renewables in 2021 alone. 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. Mind the ESG reporting trap! Here are the top 5. Company executives and boards of directors have become more attuned to the external reporting aspects of sustainability. 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). yk Ik, Professor of Digital Strategy and Cybersecurity. That said, we believe developing countries can only sustain so much debt to finance rising losses and lost revenues from physical climate risks. In the longer term, this will likely lead to increased adoption of new types of energy and fuels. 1) Changing Electric Infrastructure In that publication, we suggested 2021 . 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. All rights reserved. 2023 Sustainability Trend - Transition to Net-zero Countries and companies have taken responsibility for climate change and raised their carbon emissions reduction ambition. Or learn more about our privacy policy and how we use and store your data. 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. 2022 was a hot year for the climate. Meanwhile, new human rights regulations will introduce additional requirements for company supply chain management. 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. 4 Sustainable Travel Innovations Shaping the Future of the Tourism Industry. The MarketWatch News Department was not involved in the creation of this content. Thus, the need for sustainable trends will also possibly increase in 2023. Can development organizations, governments, firms and private financial institutions work together with the humanitarian sector to fill the gap? What kind of regulation forecast mechanism is needed to be prepared for changes in standard setting at different levels (ISSB, EU regulation, etc.)? Policy incentives will also continue to emerge to stimulate innovation, help tackle climate change and fund the shift to clean energy. estimated that the transition to net zero alone will provide business opportunities of $12trn per year. With all the regulatory changes ahead, 2023 will be a year dominated by managing ESG risks. Expectations are growing for business to play a proactive role in driving efforts to secure a sustainable and inclusive future for the next generation. Confrontation was always seen as an essential weapon for campaigners, but a new era of cooperation is proving equally effective. All too often, companies and business leaders are not getting any insights from ESG analyses, as they approach ESG reporting solely as a. 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. It is not a question of whether, it is a question of when. 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. Only 18% of global respondents mentioned they are currently investing or planning to invest in supporting their suppliers to decrease carbon emissions, according to Euromonitors Voice of the Industry: Sustainability Survey 2022 , fielded January 2022. Both crises call for increased focus on energy efficiency and acceleration of investment in renewables, suggesting alignment. Meanwhile there are plenty of near-term business results from the sustainability wave. 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. Despite this, biodiversity, essential to sustaining natural capital and ecosystem services, is declining. 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. The IMD Alumni Network is a widespread but close-knit global community in a tightly interconnected and complex business environment. 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. Finally, the need to draw down greenhouse gases already in the atmosphere will continue to gain momentum in 2023, with technological carbon-removal solutionsin addition to nature-based onesseeing unprecedented investment following the Biden administrations announcement to invest US$3.5bn in carbon-removal technology. 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. AI: a friend and a foe for sustainability? Take a scroll through our 2022 Annual and Sustainability reports. 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. 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. The Intergovernmental Negotiating Committee (INC) will hold workshops over the course of 2023, with the aim of adopting the treaty in 2024.
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