Five Sustainability Trends of 2020
Today, companies are no longer focusing only on delivering profits and creating value for shareholders. They also need to show that they are making a difference to the environment and society. With the pandemic occupying most of 2020, the year also witnessed other key trends that impact the operation of businesses.
1. The excuse of ‘we would if we could’ comes to a near end
How many times have you heard statements like “We cannot just change from one day to another”, “The real problem is overpopulation”, “Profits are important. We cannot move faster than competitors”? But, 2020 ambushed such excuses for inaction with the pandemic devastating economies and populations worldwide, forcing people, companies, and governments to take immediate and radical actions when an evident problem was urgent and big enough. So, what has changed for businesses? Among many other things, the pandemic suddenly changed a 70-year long tradition of working from the offices. The imperative of WFH, which companies partly have been reluctant to historically, is the new normal. Now, an increasing number of companies are taking measures to enable employees to WFH, to allow for better work-life balance. Cutting the commute to work by employees positively affects the environment by reducing the company’s carbon footprint and reducing greenhouse gas emissions. What else can be the new normal if we allow ourselves to think outside the box?
Bottom Line: The new normal can be invented and implemented fast, and there is no room for any more excuses for inaction - also when it comes to inaction for sustainability.
2. Carbon Zero and Carbon Neutrality: A New Imperative
Announcements of zero carbon and carbon neutrality goals by companies are on the upswing. The pandemic has exposed the world's delicacy, and any measures taken by companies to promote sustainability are appreciated. How many of us can imagine zero carbon society? Google claims to have wiped out its entire carbon footprint by investing in "high-quality carbon offsets." It became carbon-neutral in 2007, but in September 2020, it claims to have compensated for all of the carbon it has ever created. Google is aiming to run all its data centers and offices on carbon-free energy by 2030. Alongside, companies like Microsoft and Apple are planning to become "carbon negative" by 2030. On record, more than sixty countries are taking initiatives to reduce their net carbon emissions to zero by 2050, including a few nations codifying the net-zero goals into law. While companies and governments are joining the zero-carbon movement, there are discussions on the definitions of carbon-neutral, zero carbon, and net-zero claims. In the future, we expect to get more clarity on these definitions!
Bottom Line: "We are running the most dangerous experiment in history right now, which is to see how much carbon dioxide the atmosphere can handle before there is an environmental catastrophe."- Elon Musk, CEO of Tesla & SpaceX.
It's time to aim for a ZERO!
3. Circular Economy – Moving from buzz to real business
The circular economy is no more a catch-all term. A large growing number of businesses are identifying viable opportunities in adopting strategies that support a circular business model. But what are these strategies? Mainly, companies are adopting strategies in recycling and product life extension. The priorities of circularity measures in the EU’s new carbon reduction and growth program have now been outlined. Also, more than 400 companies have endorsed the New Plastics Economy Global Commitment, which envisions a circular economy where plastics are no more waste. 20% of the plastic packaging companies have set out to eliminate non-biodegradable plastic by 2025 ! They are set to innovate safer, reusable, and compostable packaging.
Bottom Line: “A great positive impact of a model like the circular economy would be innovation – it could be disruptive innovation, in a positive way.”- Khaled Soufani, Director: Circular Economy Research Initiative, Cambridge University.
4. Global Investors interested in sustainable investing
There is a growing interest from the investment community in more sustainable companies. The EU's "Action Plan: Financial Sustainable Growth" puts forth the mandatory climate risk disclosure to be a part of the regulations to support sustainable growth and a low-carbon economy. Now, companies face new legislative pressure. In Morgan Stanley's latest poll of individual investors, 75% of the investors are interested in sustainable investing , and 71% believe that companies that focus on sustainability goals earn better returns. BlackRock's CEO Larry Fink states that his firm avoids investing in companies that "present a high sustainability-related risk," which is just the most recent indicator of this sustainability trend.
Bottom Line: Expecting sustainability reporting by investors is a new normal.
To learn more about sustainability reporting read our earlier blog.
5. Corporate Digital Responsibility will unite Sustainability and Digitalization
The age of rapid technology innovation gives rise to new opportunities and business models with sustainability at its core, uniquely and dramatically. Virtual technologies encompassing artificial intelligence and big data helps organizations make more informed decisions and include sustainability metrics in those decisions, enabled by faster access to better quality information. Organizations are now being able to leverage digital technologies to create more sustainable businesses while minimizing their impact on the environment and increasing their bottom line.
Bottom Line: “AI will transform society, industry, and the way we live and work in the future. It is crucial that we use these opportunities to support sustainable development” - Darja Isaksson, Director General of Sweden’s Innovation Agency Vinnova.
Steering the direction of technology towards sustainable development is just a new beginning. SustainLab is a Sustainability Intelligence Company that creates next-generation technology to help businesses gather, process, and understand their sustainability data automatically. Get in touch to understand how SustainLab will help your company to accelerate change! - firstname.lastname@example.org
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