￼Corporate Sustainability Trends to Watch Out For in 2023￼
Corporate sustainability is the integration of environmental, social, and governance (ESG) principles into a company’s operations and decision-making processes. It is about managing the economic, social, and environmental impacts of a business in a responsible way. This can include reducing the company’s environmental footprint, promoting fair labor practices, improving community relations, and promoting ethical and transparent governance.
Adopting a sustainability strategy can help companies to mitigate risks, such as those associated with climate change and resource scarcity. It can also provide opportunities for innovation, cost savings, and revenue growth. In addition, more and more consumers, investors, and stakeholders are becoming interested in the sustainability performance of companies. They use that information to decide where to invest, work, and shop. Companies that demonstrate their commitment to sustainability may be better positioned to attract and retain customers, employees, and investors.
Overall, corporate sustainability is a holistic approach to managing a business that considers the long-term social and environmental consequences of a company’s operations.
Trends in corporate sustainability
Companies that embrace sustainability are investing in their future by positioning themselves as responsible corporate citizens and positioning themselves to thrive in an economy that is increasingly focused on sustainable growth.
Some of the latest trends in corporate sustainability include:
Setting science-based emissions targets
Many companies are setting emissions reduction targets that are aligned with the goals of the Paris Climate Agreement to limit global warming to well below 2 degrees Celsius. They are demonstrating their commitment to addressing climate change and positioning themselves as part of the solution. Setting scientifically sound targets helps companies manage the risks associated with climate change, such as extreme weather, supply chain disruptions, and increased regulation. Companies also want to appeal to customers, investors, and other stakeholders increasingly concerned about the environmental impact of their consumption and investment decisions. Ensuring their targets are science-based and having a roadmap to get to those figures helps them assuage customers and other stakeholders and enable them to vote with their money.
Increasing transparency across the board
Transparency is essential because it allows stakeholders, such as customers, investors, and regulators, to understand a company’s sustainability performance better, and to make more informed decisions about that company.
Many companies are using sustainability reporting frameworks, such as the Global Reporting Initiative (GRI) and the Sustainability Accounting Standards Board (SASB), to provide detailed information about their environmental, social, and governance (ESG) performance. These frameworks provide a standardized and consistent way for companies to report their sustainability performance and can help to increase transparency and comparability. Some companies also have their sustainability reports independently verified or audited by third-party organizations for additional assurance.
Finally, many companies are also becoming more transparent about their supply chains. Often, this happens in the form of disclosing the names and locations of their suppliers, as well as information about the environmental and social performance of those suppliers.
Investing in renewable energy
By investing in renewable energy, companies can reduce their greenhouse gas emissions and achieve long-term cost savings and improved energy security. Additionally, some governments provide incentives or subsidies to companies to support their investments in renewable energy, making the financial case for it more attractive.
So how do companies invest in renewable energy? Here are some trends we’ve seen so far:
On-site generation: Some companies invest in renewable energy sources, such as solar panels or wind turbines, to generate electricity on-site. This can help them to reduce their dependence on fossil fuels and to lower their energy costs.
Power Purchase Agreements (PPA): Companies can also enter into Power Purchase Agreements (PPAs) with renewable energy providers. Under a PPA, the company agrees to purchase renewable energy from the provider at a fixed price over a specified period. This can help companies to reduce their greenhouse gas emissions and to hedge against future energy price increases.
Green Energy Tariffs: Some utility companies are now offering “green tariffs” or “renewable energy tariffs” that allow companies to purchase energy generated from renewable sources. This will enable them to reduce the emissions associated with their energy consumption.
Investing in renewable energy projects: Private companies can also invest in renewable energy projects, such as wind farms or solar power plants, either through direct investment or equity participation. This can help companies to access a steady stream of renewable energy and to reduce their dependence on fossil fuels.
Supporting tree planting efforts
Tree planting is considered a cost-effective way of removing carbon dioxide from the atmosphere while providing other benefits such as biodiversity conservation, soil conservation, and water management. Companies can directly invest in tree-planting projects by planting the right trees on land they own or manage.
A more popular way, however, is to partner with a tree planting organization and financially support planting a large swathe of forest land. This way, the tree planting partner, like EcoMatcher, takes care of the logistics and science-based planting while the corporate company sees results.
Incorporating circular economy principles
The circular economy is a production and consumption system that is restorative and regenerative by design. As we move beyond surface-level proclamations of “reduce, reuse, and recycle,” many companies lead toward a truly circular economy.
For example, companies that design products are doing so to maximize durability, repairability, and recyclability, which helps keep products and materials in use for longer periods. They are also implementing closed-loop manufacturing processes, in which waste materials are reused or recycled within the production process, reducing the need for virgin raw materials.
The final word
2023 is set to be a pivotal year for sustainability. It will be marked by increasing pressure from governments, regulators, investors, and consumers, and a growing number of companies will be required to report on their sustainability performance. Companies that can demonstrate their commitment to sustainability will be better positioned to compete in the global economy.
EcoMatcher helps businesses get ahead of the wave and jump straight into meeting sustainability goals through tree planting in areas that desperately need forest cover. We leverage technology and artificial intelligence—another rising trend—to green the Earth and ensure we’re not only repairing the damage we’ve collectively caused over the years but conserving what we have for future generations, too.