Environmental, social and governance (ESG) criteria and particularly sustainability are now key to many business spending decisions. Here we look at some of the current key trends.
1. Putting sustainability at the heart of the business. This is now much more than just an attractive concept. The need to tackle global warming, meet net-zero targets, appeal to environmentally aware customers, and compete successfully means that sustainability is now a highly valued feature of products and services has made sustainability an important trend. Businesses and organisations that can be proactive and successfully manage sustainability transformation have a brighter future. As part of a company’s broader ESG efforts, measuring, assessing, and monitoring a company’s sustainability impacts can help it to pinpoint priority areas to change to improve sustainability.
2. Greenhouse Gas Protocol (GHG) frameworks. These are the global standardised frameworks for measuring and managing greenhouse gas (GHG) emissions from both private and public sector companies, organistions, operations and value chains. By understanding what Scope 1, 2, and 3 emissions are, companies are finding that they are better able to make the realistic goals and targets required to address them. For example, Scope 1 emissions are direct emissions e.g., from the factory or vehicles, and Scope 2 emissions are indirect greenhouse gas emissions into the atmosphere e.g., from HVAC systems. Scope 3 emissions make up the majority and include those generated from upstream sources (raw materials production) and downstream sources (distribution and recycling).
3. Extending product life cycles through the circular economy. In technology, for example, this could include the recycling of precious metals in phone handsets and other e-waste and increasing ‘fix your own device\’ possibilities, information, and help.
4. Addressing climate adaptation as part of a risk mitigation strategy. Climate change adaption refers to making alterations that can accommodate the current and future effects of climate change, thereby attempting to avoid disruption to operations, supply chains, and customers.
5. Creating a more sustainable supply chain by making greater efforts to connect data gaps and help achieve sustainability goals across the whole supply chain.
6. Being more honest in disclosing carbon footprint information. For example, because of this need, some large banks are now exploring ways to move investment from more carbon-intensive industries to industries that are actively reducing emissions.
7. Creating ‘Green IT’ services and structures. Tech heavy industries are now looking at ways to reduce carbon emissions across their IT functions and supply chains. Also, big technology companies e.g., Microsoft and Google are currently working on minimising the carbon footprint of their data centres.
8. Impact sourcing. Many companies and organisations are trying to prioritise a focus on employing marginalised and disadvantaged populations, reducing workplace bias, and increasing diversity.
9. Turning to more responsible and transparent AI and using a more holistic approach to minimise the chance for algorithms (which are now widely used) to cause harm.
10. Improving ESG analytics and reporting to help stay ahead of developments and keep stakeholders informed.
What Does This Mean For Your Organisation?
These trends indicate the value that is now placed upon sustainability and the investment and efforts that businesses and organisations are putting into the many strands needed to achieve goals and hit targets. Businesses and organisations are now not just focused on their own operations, but on the genuine sustainability credentials of all those along the supply chain and across their value chains.