The world is undergoing a radical transformation towards sustainability, with responsible business practices becoming the main priority for organizations across various industries. Consumers are becoming increasingly conscious of their impact on the planet and demand green products and services, believing brands have as much responsibility as governments to create positive environmental change. It’s up to corporations to devise a roadmap to drive action, adapting their business models to the latest trends. Not all sustainability trends are of equal importance. In some cases, their weight depends on the company’s industry and other contextual factors, such as the business model.
There are a couple of trends with high impact on business that will soon become mainstream (or already are). If you’re curious to find out more, please continue reading.
Moving The Sustainability Conversation Beyond Carbon
There’s no denying the fact that reducing carbon emissions is important, yet becoming overly focused on this metric can lead to carbon tunnel vision, whereupon we ignore other sustainable development goals. While driven by good intentions, the focus on zero net emissions leads enterprises to ignore the interconnectedness of environmental, societal, and economic factors, overlooking biodiversity preservation, resource management, and equitable social development. There’s a stringent need for an energy transition away from fossil fuels, which covers various aspects, each interacting with the other as they’re part of the same view and demanding equal attention.
Until now, much of the focus of global businesses has been on reducing carbon emissions. Nonetheless, there’s a mounting realization that transitioning away from fossil fuels is just one aspect of addressing the climate crisis, and efforts must be broad-based. It’s time to move the sustainability conversation away from carbon and plan a just transition that takes into account the reduction of greenhouse gas emissions and the injustices that affect human and ecological health and well-being. In other words, it’s necessary to have a holistic outlook, embracing an approach that incorporates various pillars of sustainability.
Making Business More Nature-Positive
Global and EU regulations require organizations, including SMEs, to disclose nature strategies, so companies must implement key actions to achieve a state of nature positivity. Simply put, brands must take advantage of the opportunity by going beyond reporting their environmental impact. The planet is currently losing species and habitats that support global diversity at an alarming rate, and biodiversity risks have much in common with climate change. More precisely, both are extensive in terms of breadth and magnitude and feature tipping points beyond which recovery is impossible. Nature positivity requires a transformation in the way the global economy operates, attempting to bend the curve of nature loss by 2050.
The growing demand for everything from energy, water, minerals, and so on, to fish, farmed animals, and fertilizers has led to a decline of nature with significant impacts on society. Economies, as well as societies, are shaped towards the unsustainable extraction and production, use and consumption of finite resources. Undoubtedly, corporate action must accelerate. New technologies such as earth observation, eDNA (environmental DNA), and acoustic/imaging technology aid corporations in accurately reporting and meeting nature-related targets. Even the most zealous actions by single companies can’t deliver favorable outcomes if implemented in isolation.
Balancing Short-Term Profit with Long-Term Sustainability Investment
Companies that place emphasis on short-term profitability may experience decreased customer loyalty, not to mention brand reputation damage. In spite of pressure in the home market, it’s not recommended to invest less in environmental, social, and corporate governance (ESG), as it can be a source of competitive advantage. Instead of prioritizing short-term operational measures, it’s best to work toward the future, developing a clear vision of what needs to be done. By embracing sustainability as an opportunity rather than a cost, enterprises can mitigate potential risks associated with resource scarcity, climate change, and changing consumer preferences.
Otherwise stated, companies must invest in the long term to outperform the competition. Incorporating ESG risks and opportunities into the investment analysis and decision-making process is on par with the mission to ensure that the business has the financial resources to trustingly maintain and expand leadership for future generations. According to Miltek, in 2024, corporations must strike a balance between short-term profit and long-term sustainability investment. It goes without saying it takes a lot of resources to figure out what to do next. More and more companies will take sustainability seriously and give priority to long-term investment, creating a positive impact while building wealth.
Expanding Corporate Board Mandate for Societal Well-Being
Although the vast majority of CEOs acknowledge that ESG issues should inform their corporate strategy, those responsible for securing the company’s future, i.e., the board, hold the organization back with emphasis on short-term value maximization. Boards will be expected to upskill to implement sustainability solutions; they’ll be accountable for overseeing societal well-being. Boards don’t have a mandate to address sustainability, their time being spent on compliance tasks driven by the secretary and the inside/outside counsel. It’s up to the board to articulate and foster a company’s durable value proposition (and its drivers).
Board members should include ethical AI in their conversations, the benefits of which are numerous and significant. Ethical AI represents the development and utilization of AI systems promoting transparency, fairness, accountability, and respect for human values. Public and private sector enterprises can mitigate climate change and associated environmental issues with concerted action – various AI applications exist for industries at large, which can collectively devise their sustainability strategies. Examples of AI applications include but aren’t limited to emissions monitoring and reporting, renewable energy integration, and carbon capture and storage.
Closing Remarks
Several other sustainability trends are becoming commonplace, even if they’re not high-impact. Alternative materials are one example. Trends seem to come and go in today’s fast-paced world, so it’s becoming ever more difficult to distinguish between relevant and irrelevant ones. If you don’t want to miss out on a competitive advantage or lose ground to the competition, don’t wait for sustainability trends to hit your organization before taking action. Be proactive and start planning in advance, identifying opportunities and adapting your strategy.
