Outlook 2023, Sustainability: five trends to watch But we need to look beyond short-term benefits and keep an eye on the long-term implications of scaling AI too. 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. Many corporate leaders find sustainability also helps deepen their organizations sense of purpose to engage and retain a new generation of employees. 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. If not, select "Manage Preferences" to learn more about managing your cookie preferences. Apr 26, 2023 (3BL Media via . 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,. Euromonitor International has identified five key trends affecting the global sustainability agenda in 2023. Susan Goldsworthy, Affiliate Professor of Leadership, Communications and Organizational Change. 10 Trends That Will Define Sustainability in 2023 - LinkedIn What makes a great leader? Corporate sustainability into action: Business Trends 2023 - IESE Standout Considering all these pressures, its all too easy to stumble into the ESG reporting trap. Under increasing SEC scrutiny, Forrester analysts expected public companies to anchor their sustainability goals with corporate policies aimed at driving environmentally sustainable behavior. IDC analysts predicted that by 2026, regulations and sustainability-linked lending will drive over 60% of global manufacturers to adopt product carbon footprint as a key metric to operationalize sustainability beyond reporting. 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. 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. We need a more constructive engagement between the US-led West and non-Western countries. 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. From single-use water. 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 this context, practical solutions that can accelerate progress on the SDGs will be urgently needed. 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. 4 Sustainable Travel Innovations Shaping the Future of the Tourism These instruments will have to increasingly address investor questions about the effectiveness of targets and incentives. 2023 Sustainability Trend - Transition to Net-zero Countries and companies have taken responsibility for climate change and raised their carbon emissions reduction ambition. 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. Gartner researchers said the ability to efficiently navigate the global regulatory environment and scale compliance systems will offer companies a significant competitive advantage. 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. Follow this link to learn more about our cookie policy and how we use cookies. All this will require considerably more investments and capability building. Firms around the globe are shifting their focus on sustainability from talk to action. MIT Sustainability Summit. Learn more about incorporating sustainability into your business operations to help create a future with zero emissions, zero waste, and zero inequality. We expect that 2023 will see significant attention paid to adaptation and resilience financing. There is plenty of room for penetration in most markets, as the share of digital shelf remains low. 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. Consequently, in 2023, we anticipate the durability of new employee-friendly workplace practices will be tested. Stphane J.G. The provisional agreementin the EU for new regulation for deforestation-free supply chain will mean many companies will have to better understand biodiversity risk. The global energy landscape shifted in 2022 with record prices and supply disruptions related to the Russia-Ukraine war. The global trend of green buildings continues to rise even today. However, the need to bring citizens and workers on board with the climate-action agenda will remain a challenge. 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. If you've had any better visions, let us know in the comments. 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. 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. 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. 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. COP27 has confirmed the need for stronger co-operation on key issues such as climate finance and corporate net-zero commitments. These are accelerating systems transformation by boosting multi-stakeholder innovation, thus reducing costs for players, surmounting obstacles, and advancing solutions adoption. Key insights such as 'The Future of Jobs' report will map . The 6 Biggest Sustainability Trends in 2023 - Exploding Topics ArtificiaI Intelligence, and specifically certain deep learning models such as those designed to process human language, requires huge amounts of energy. The top strategic technology trends for 2023 are: Sustainability Sustainability traverses all of the strategic technology trends for 2023. Victoria Kemanian, Senior Advisor, Business Transformation Initiative. 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. 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. 2023 Foodservice Food and Flavor Trends - IFT.org An unprecedented level of co-operation and solidarity is now required to unleash the funds potential. Following recent momentum, including that gathered during COP15, we believe policymakers, regulators, companies and investors will more explicitly look to factor biodiversity-related risks and opportunities into decision-making in 2023. Storytelling and expertise from marketers, SAP BrandVoice: Green Customer Experiences Drive Ongoing Growth For Midsize Businesses. Collaboration within and outside ecosystems in circular economy solutions is central to unlock benefits that organizations cannot achieve on their own. Ecosystems & Resources: A new global biodiversity framework will set the stage for rising global scrutiny and collaboration on nature. That is the hardest part, as usually 90-99% of a companys greenhouse gas emissions are Scope 3. What are the new sustainability KPIs that are at the heart of your strategy execution? From net zero to climate-positive supply chains, Many companies are working hard to meet net-zero sustainability targetsby 2050 or other target dates. Sustainability Trends 2023: Goodbye Greenwashing, Hello - Forbes All stakeholders will bear the impacts from physical risks related to climate change. They also involve measures to enhance the working environment, supply chain emissions, employee well-being, and ethical reporting. Water is likely to play a central role on the global agenda in 2023 following major water-related disasters such as the floods in Pakistan and the droughts in Europe. featured Despite these headwinds, we continue to view that the sustainable debt market will help advance sustainability goals. The picture looks especially complicated in Europe, where new investment in liquefied natural gas and a slower phaseout of coal could challenge decarbonization plans. Moving to a cloud service provider that has made such commitments may help organizations reduce their own carbon footprint as well! Taking a stack of post-it notes, team members write down all the things that are concerning them from their personal and professional perspectives. An infographic based on the latest Climate Watch data highlights that energy usage contributes to 73.2% of global greenhouse gas emissions. Net-zero pledges have become mainstream in companies sustainability reports, as a way to demonstrate environmental commitment. 19 April 2023 by Natalia Olynec, Julia Binder in Sustainability. 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. From net zero to climate-positive supply chains The COP27 climate conference was a mixed bag. 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. 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. Building on the key insights from World Water Week 2022, the UN Water Conference in March will focus on the water-climate nexus. Considering all these pressures, its all too easy to stumble into the ESG reporting trap. To that end, here are the top sustainable living trends to watch in 2023. A personalized transformation journey that teaches you how to unlock the full potential of your leadership. 13 sustainability trends driving business in 2023 - I by IMD Net Zero & Energy: The recent focus on scope 3, carbon credits and carbon removal is set to accelerate. Corporate Growing Sustainable Beauty Trends for Emerging Brands in 2023 Economies and nature are interconnected. Your subscription grants you access to the quarterly magazine plus daily articles, videos, podcasts and learning exercises. By circulating products and materials, eliminating waste, and regenerating nature, circular models can help businesses to overcome some of the barriers to investment in sustainability, such as high costs, lack of internal knowledge, and implementation difficulties. Develop fully customized programs that reflect the unique opportunities and challenges of your organization. And the EU looks to advance its own human rights due diligence directive and regulation restricting goods made with forced labor throughout 2023. In 2023, we think broader market conditions will continue to influence GSSSB issuance. Boards leading on ESG drive the ESG culture of the board through its composition. Authors: Andrew Angle, Aiste Brackley, Justin Nelson, Laura Street, Mark Lee. Economist Impact, through its Back to Blue Initiative, has put a spotlight on the need to tackle chemical pollution. The following issues are key in that discussion: Answering those questions and going beyond just complying with mandatory sustainability reporting standards is key to gaining and maintaining competitive advantage in the future. Research with more than 3,000 executives since April 2020 shows that between half and two-thirds of leaders say they are operating from a place of dis-ease rather than a position of well-being. We believe that dynamic could change as companies adjust in the face of economic uncertainty and changing labor market dynamics. 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. The final drafts of these standards should be adopted in 2023. 1. 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. At COP27 countries finally made progress on establishing a framework for a Global Goal on Adaptation (GGA). In 2023, we think continued geopolitical turmoil, persistent inflation, looming recession and worsening physical impacts of climate change will create new tensions between managing near-term risks and making meaningful progress on longer-term sustainability goals. Meanwhile, the number and duration of droughts globally have risen by almost a third since 2000, according to the U.N. Dedicated to the advancement of knowledge on world competitiveness. 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. Fundamentally, if we take a long-term perspective, we will deal with climate change. 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. Unsurprisingly, sustainability was one of the key . Around 70% of global professionals mentioned their companies face at least some pressure from competitors, governments, and consumers, according to Euromonitors Voice of the Industry: Sustainability Survey 2022. Regulatory trends point to a hardening of what were largely voluntary frameworks for how companies manage human rights in their upstream operations. Didier Cossin, Professor of Governance and Finance, Founder and Director of IMD Global Board Center, Sophie Coughlan, Associate Director, IMD Global Board Center. 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. 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. Prodded by consumer demands and impelled by increasingly stringent regulations, the business sector has taken notice and actions to create a more sustainable future. Executive teams will increasingly have to address these emotional challenges. 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. Log in here to join in the conversation with the I by IMD community. While policy and regulation play catch up, how will the financial sector, firms, and consumers step up to the challenge? They then write down all the things they can influence and achieve in the upcoming meeting, placing those post-it notes on the opposite wall. 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. Meanwhile, institutional investors under pressure to deploy capital are turning to still-developing voluntary carbon offset markets to meet climate commitments while continuing to finance assets and companies linked to fossil fuels. In 2023, we believe more investors and companies will seek to assess the social and financial costs associated with water scarcity and droughts. These include Scope 3 emissions, those which do not come from their own operations but from their larger value chain. Top 5 Sustainability Trends for 2023 - Food Industry Executive 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. Three Energy and Sustainability Trends to Watch in 2023 Whether it is reducing waste, optimizing the supply chain, or eliminating emissions, insights from sustainability data can help to reach net-zero emissions. But there are also reasons to be optimistic. Girod, Professor of Strategy and Organizational Innovation. Inspiration, a mini-series with Lorange Network and IMD, Business transformation: incumbents must not assume the right to win, Executive pay: balancing sustainability with profitability, We need a realistic, fact-based approach to sustainability, Reframing sustainability: from risk to opportunity, Activists are not the enemy,so lets work together. 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 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. First, the world is searching for new solutions. April 28, 2023 . One of the main reasons for that is the cost-of-living crisis in many countries, exacerbated by the war in Ukraine and rising energy and food prices. Social Sustainability: The cost-of-living crisis intensifies, but offers opportunities for more-inclusive climate action. Firms are advised to get ahead of the game and start accounting for biodiversity. Some nations loosened restrictions on operating coal-fired power plants, while others extended the lives of coal and nuclear power plants. yk Ik, Professor of Digital Strategy and Cybersecurity. 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. 5 Sustainability Trends for Businesses in 2023. Build your core leadership skills, accelerate your career and harness your full potential as a leader. Forrester expected five Fortune Global 200 firms to announce policies limiting travel for sustainability this year. Sustainable solutions can, and should, be affordable, so consumers do not struggle when seeking more conscious habits. Explore more than 75+ Executive Education programs at IMD. According to HolonIQ we already have 47 climate unicorns worth more than $1bn. 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. Five Key Trends Shaping the Sustainability Agenda in 2023 2023-2030 Sustainability Reporting Software Market is - MarketWatch For this to be achieved, companies need to measure direct (scope 1) and indirect (scope 2 and 3) emissions. 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. 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. AI: a friend and a foe for sustainability? However, we still anticipate GSSSB issuance to grow to between $900 billion and $1 trillion in 2023 compared to nearly $850 billion in 2022 as the asset class capitalizes on various initiatives to fill the climate financing gap. Second, we are investing. 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. Here are the top six trends that are shaping a more sustainable future for our planet. 2023 Restaurant Sustainability Trends - Foodservice, Zero Waste Many restaurants now offer compostable containers and utensils that are much more eco-friendly than traditional plastic or styrofoam. Top Emerging Trends of Sustainability in 2023 and Beyond Affordable sustainability There is unanimous agreement that 2023 will be a challenging year across global markets. Climate change and associated topics such as water scarcity and biodiversity loss are likely to dominate stakeholder discussions, with long-term climate goals potentially reevaluated to address near-term urgencies. But, in order for circular models to succeed, there is a need for collaboration. MSc in Sustainable Management & Technology, Executives-in-Residence & Executive Fellows. Sustainability Insights | McKinsey & Company Although Forrester analysts expected at. Can development organizations, governments, firms and private financial institutions work together with the humanitarian sector to fill the gap? Our premier, award-winning syndicated market research database provides detailed data and analysis on industries, economies, countries and consumers across 781 cities, 210 countries.. Data in your Equity, Inclusion & Diversity strategy: friend or foe? Regulation. The top 5 sustainability and climate trends to watch in 2023 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. This year's forecast of sustainability trends looks like the perfect storm (in a good way) of purpose-minded, yet business opportunity-led progress. Our work on water stress in Jordan highlights the need for resilience. Family businesses will adopt new digital capabilities to manage sustainability data that guide sustainable business practices. Policy incentives will also continue to emerge to stimulate innovation, help tackle climate change and fund the shift to clean energy. 5 Sustainability Trends in 2023 and Beyond - DHL Express NZ 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. Stakeholder pressures on companies keep rising. The MarketWatch News Department was not involved in the creation of this content. Meanwhile, new human rights regulations will introduce additional requirements for company supply chain management. Another trend in sustainability that's gaining traction in restaurants is eco-friendly packaging. Source: Euromonitor's Voice of the Industry: Sustainability Survey 2022. Sustainability Trends in 2023 for Businesses and Investors By understanding and implementing these 2023 sustainability trends, restaurants can stay ahead of the curve . In the short term, businesses of all industries and sizes will look at energy-saving measures to reduce both costs and carbon emissions.