12 Trends to Make Your Business More Sustainable 

Every year, leaders, negotiators, campaigners, and industry representatives worldwide gather to discuss and create plans to reduce human impact on the environment and climate. This year, two important climate events, the COP27 United Nations Climate Change Conference and the UN Biodiversity Conference COP15 in Montreal, emphasize the increasing importance of businesses becoming more sustainable. ESG investors and rating agencies hold firms responsible for their sustainability practices, indicating a growing expectation for companies to take a proactive role in securing a sustainable and equitable future for upcoming generations, amongst the other topics discussed. 

It is now impossible for businesses to overlook sustainability, and they must prioritize sustainability efforts to facilitate further transformations of their business functions. To do so, business leaders and professionals should be well-informed about the sustainability trends that help their organizations to create value and manage risks. In this article, we will share 12 sustainability trends that leading academics and experts identified in sustainability, organizational change, innovation, and ESG. 

Keep reading to learn more about the supply chain's future, the adoption of renewable energy, sustainable high performance, and AI’s position in sustainable development. 

1. Transforming supply chains from net zero to climate-positive.

Net-zero sustainability is the main aim for companies. However, reaching net zero proves almost impossible, considering that 90-99% of companies’ greenhouse gas emissions come from Scope 3 emissions from the value chain. Currently, companies are exploring other areas that can go "beyond net-zero" by transforming their supply chains into CO2 negative and devising strategies to compensate for their CO2 "debt."

2. Shifting focus from ESG reporting to sustainability opportunities.

In 2023, managing ESG risks will dominate due to upcoming regulatory changes, but there is a risk of falling into the ESG reporting trap. Many companies approach ESG reporting solely as a disclosure exercise rather than as an opportunity to seize the benefits of sustainable transformation, which could lead to missed opportunities. The transition to net zero alone could provide significant business opportunities; according to McKinsey, the global net-zero transition could be worth £1 trillion to UK businesses by 2030.

3. The next generation of family businesses will drive data-driven sustainability.

In 2021, PWC's survey revealed that 60% of family businesses surveyed had solid digital capabilities and prioritized sustainability. This trend doesn't look like it’s ending any time soon, but on the contrary, family businesses increasingly use digital capabilities to manage sustainability data and promote sustainable business practices. The next generation of tech-savvy family business owners will likely be more committed to sustainability and equity in businesses and further drive the trend. 

4. The adoption of renewable energy is accelerated by war and energy shortages.

The energy crisis caused by Russia's invasion of Ukraine has led to energy insecurity and increased costs in Europe, driving investment in renewable energy sources. Businesses are more severe than ever about implementing energy-saving measures such as renovating buildings and using digital solutions to reduce energy consumption and costs. This may lead to the adoption of new types of energy and fuels in the long term. Policies to stimulate innovation and fund the shift to clean energy will also likely emerge. Companies are seeing the opportunity to accelerate the green energy transition and take advantage of the increasing competitiveness of renewables.

5. Integrating nature and biodiversity into climate goals

Preserving biodiversity does not only help the species at risk of extinction, which 40,000 of them are expected to be at stake in the coming years, it can also help mitigate climate change. Firms are already advised to start accounting for biodiversity following the 2022 UN conference on biodiversity. It wouldn't be surprising to see an increase in businesses advocating for mandatory biodiversity assessments and disclosures. 

6. Sharing emotions can foster healthy and sustainable high performance.

Many people have high levels of anxiety, frustration, and irritability due to a range of challenges in the world, such as geopolitical instability, biodiversity loss, social division, and economic decline. Addressing these emotional challenges can be a good way of sustaining high performance. Using a simple exercise where team members write down their concerns and what they can influence or achieve can help create a more inclusive and productive environment where people can flourish amidst adversity and share their concerns with others.

7. Sustainable supply chains are becoming a focus for luxury brands.

Luxury industries, particularly the automobile and fashion sectors, are amongst the main sectors working towards greater sustainability. They mostly focus on decarbonization and reducing negative environmental and societal impacts. In 2023, the focus will be on accelerating decarbonization efforts, shifting to positive-impact business models, and investing in capability building.

8. A total understanding within the company is the growing focus on environmental, social, and governance (ESG) issues.

Many companies recruit sustainability specialists to lower the ESG pressures; however, more is needed for successful ESG governance. Instead, the entire management must understand their ESG identity and evolve their composition toward climate change, next generation, social justice, or diversity concerns. Only a complete understanding of the company's ESG drive can lead to the ESG culture of an organization through its composition.

9. Climate hopes are fueled by innovation, investment, and business transformation.

Despite disappointment at the lack of governmental action on climate change, there are reasons to be optimistic. The world is searching for new solutions, with one million green startups exploring new energy solutions and 47 climate unicorns worth more than $1bn. It is a matter of time before the world goes through the whole energy transition, builds a circular economy, and scales new technologies to disrupt our carbon economy gradually.

10. New regulations are driving the sustainability strategy.

Companies will soon adopt mandatory sustainability reporting standards worldwide, and executives have a choice between merely complying or seizing the opportunity to prioritize sustainability as a critical component of their strategies. Key issues include:

• Determining material sustainability issues.

• Defining new sustainability KPIs.

• Incentivizing senior managers.

• Preparing for changing standard-setting regulations.

• Planning for transitioning to the low-carbon era under different scenarios.

• Going beyond mere compliance with reporting standards is crucial for gaining and maintaining a competitive advantage in the future.

11. Utilizing collaborative efforts to facilitate the implementation of the circular economy.

The transition to the circular economy requires collaboration among multiple actors within and outside ecosystems. This collaboration can lead to systemic changes that drive innovation and reduce costs, but it requires a shift away from a linear, profit-driven mindset.

12. Artificial Intelligence (AI): An Ally and Adversary for Sustainable Development?

Artificial Intelligence (AI) helps with a better conservation of natural resources through better prediction, agricultural yield, or the demand and supply of energy in energy grids. However, AI, precisely specific deep learning models, such as those designed to process human language, requires a vast amount of energy. By their nature, they process massive amounts of data, and all those data centers carrying out storing and processing tasks require a lot of energy for cooling. Given that several AI giants such as Google and Microsoft have already pledged to become carbon negative soon. Opting for a cloud service provider with such commitments may help organizations reduce their carbon footprint.

These 12 sustainability trends would help you shape how your business operates and put sustainability at the centre in 2023 and beyond. However, it is always good to remember that no matter what you do regarding sustainability, you must take a holistic approach. Always consider your business’ environmental, social, and economic impacts, and seek to create value for all stakeholders. By embracing sustainability in a balanced and meaningful way, you won’t only reduce the effects on the environment but also create new opportunities for growth and innovation for your business.

Tags: sustainable supply chain, data-driven sustainability, renewable energy, biodiversity, ESG, circular economy, AI