The Climate Of Business #110: 2024 -The year of sustainability?

Climate Change Reality

• Heatwaves during pregnancy could be making babies smaller (Euronews )
• Mysterious plants and fungi named new to science (BBC )
• El Ni?o heralds turbulent start to 2024 (Financial Times )
• ‘Brutal’ Arctic blast expected to bring frigid temperatures to North America (The Guardian )
• Brazil warns dengue cases could hit 5mn as extreme weather takes toll (Financial Times )

• Winters warmer than -8°C could lead to water shortages in Europe and US (Euronews )
• Climate change has forced millions to flee their homes — and Asia is ‘not prepared’ (CNBC )
• 20 things that made the world a better place in 2023 (WIRED )
• 2023 confirmed as world's hottest year on record (BBC )
• Dutch Caribbean islanders sue Netherlands over climate change (The Guardian )

Business Climate Reality

• European asset managers greener than Americans, study finds (Euronews )
• The White House Just Announced a $623 Million EV-Charging Bonanza (WIRED )
• Norway approves controversial deep-sea mining (BBC )
• Cookies and candy are latest victims of climate crisis as sugar prices surge (The Guardian )
• Can ‘water batteries’ solve the energy storage conundrum? (Financial Times )

• EU urged to adopt absolute, not 'net', target for emissions cuts (Euronews )
• As workers prioritize the environment, companies must ‘get on board’ or deal with ‘climate-quitting,’ experts say (CNBC )
• Digitization Beats Deforestation (WIRED )
• UK government plans further nuclear power expansion (BBC )
• How global trade could fragment after the EU’s tax on ‘dirty’ imports (Financial Times )
• World’s renewable energy capacity grew at record pace in 2023 (The Guardian )

Reality Check

As pressure to take immediate climate action reaches an all-time high in 2024, the commitment to low-carbon business models and making net-zero business-as-usual is no longer a distant goal but an immediate imperative.?

Whilst there have been recent global efforts to address climate challenges, national net-zero targets - covering 88% of global greenhouse gas emissions - are yet to fully integrate concrete plans for phasing out fossil fuels. This gap between ambition and action is where businesses can step in, bridging it with science-driven strategies and bold commitments.

In this context, technological solutions emerge as a beacon of hope and practicality. They enable us to engage stakeholders effectively, particularly in supply chains, fostering transparency and accountability. Moreover, as the conference has reiterated, moving beyond greenwashing and carbon offsetting is not just a moral choice but a strategic one.?

Below, we give a brief overview of the sustainability trends set to define 2024. For a comprehensive deep-dive into such themes and expert insight into how businesses can effectively navigate such challenges; access Plan A’s exclusive ‘Sustainability trends for 2024’ whitepaper’.??

The decade of climate disclosure

The year 2024 stands as a landmark in the journey towards enhanced climate disclosure, the message is clear: companies have an opportunity to take control of their destiny in this rapidly evolving regulatory landscape.?

The last three years have seen a doubling of ESG disclosure policies, from 614 in 2020 to 1225 in 2023. Accordingly, companies worldwide are navigating a multitude of current and upcoming regulations that affect an array of businesses depending on their size, revenue, and global presence. This complex regulatory landscape coupled with an increase in climate disclosure policies signals a step change in the regulatory cycle. From a corporate sustainability perspective, this means companies have an opportunity to embrace increased ESG disclosure and stay ahead of the curve. The choice is stark – either let the tide of regulation determine your course or proactively steer your business towards resilience and market leadership.

Visit the Plan A Policy Centre for a expert guidance on up-to-date ESG and climate policies ?

Why are businesses concerned about climate disclosure in 2024??

Businesses crave certainty, empirical metrics and data to make decisions. Keeping abreast of the policy, technical, political and science is becoming an increasingly more burdensome task. A survey of more than 1,000 business leaders outlines how making decisions now is statistically harder than it has ever been. Companies need a trusted partner that can help guide them on the journey so they can focus on what’s important for them: making decisions and ensuring their business grows sustainably. While specialised support like Plan A is invaluable, the diversity of ESG also necessitates tailored strategies. Businesses who seek expert guidance are choosing to not only be regulation-ready but to also shape the future of sustainable development.?

Low-carbon business models: making net-zero business as usual

To limit global warming to the critical threshold of 1.5°C, the pace of decarbonisation must accelerate to a rate 11 times faster than what we are currently achieving . This means that in 2024 companies will ultimately have to transition their operations from simply making net-zero pledges to actively implementing substantial, low-carbon business models. This approach is fundamental in determining how businesses influence and adapt to the evolving environmental landscape.

How are businesses making net-zero business as usual in 2024??

Overcoming the gap between intention and action requires a shift from traditional linear business models towards more sustainable, circular, ones. While companies reliant on the extraction and depletion of resources are encountering greater challenges in transitioning to new operating models, circular business models have been found to generate immense economic opportunities – up to $560 billion in the fashion industry. Practical examples from the fashion industry include:?

1. Rainwater harvesting systems used in the manufacturing process
2. Using innovative dyeing techniques
3. Substituting high-carbon with low-carbon materials (leather → cotton)
4. Eliminating single-use plastics and using recycled materials for packaging)

Businesses must remember – while the path toward a low carbon business model is complex and requires resilience, it presents an unparalleled opportunity for businesses to lead in the decarbonisation era.?

Greenwashing scrutiny intensifies

As we advance into 2024, companies are required to transcend the practice of greenwashing worldwide, with specific greenwashing regulations being implemented across the globe. The European Union has taken a bold step by prohibiting greenwashing and climate-neutral assertions by 2026, and companies could now face potential penalties of up to 4% of their annual revenue for making misleading environmental claims. For a comprehensive guide to the EU’s greenwashing regulations, read here.

How are businesses avoiding greenwashing in 2024?

Responsible business leaders must adopt a comprehensive and transparent sustainability approach that is both genuine and legitimate as stakeholders increasingly insist on a sincere commitment to sustainability, necessitating a departure from superficial gestures. Below are a number of steps businesses can take to avoid greenwashing. For a comprehensive guide to avoiding greenwashing – read Plan A’s 10 principles to avoid greenwashing .?

1. Transparency and accountability: Organisations must provide clear and accurate information regarding their sustainability efforts. Third-party certifications and independent audits play a pivotal role in verifying and substantiating claims and instilling confidence in stakeholders.
2. Life Cycle Assessments (LCAs): These assessments analyse the environmental impact of a product or service throughout its entire life cycle, from raw material extraction to end-of-life disposal. By embracing LCAs, organisations gain a comprehensive understanding of their environmental footprint, allowing for informed decisions and targeted improvements in sustainability practices.
3. Integrating sustainable practices: Companies must integrate sustainability into their core business operations. This involves adopting sustainable practices not only in the final product but also in the supply chain, production processes, and distribution networks.
4. Carbon insetting: Insetting involves prioritising internal initiatives within a company's value chain to directly diminish its carbon footprint. This approach not only underscores the commitment to emission reduction but also serves as a fundamental principle, replacing traditional offsetting methods in alignment with broader sustainability goals.

Leveraging technology for enhanced stakeholder engagement

As businesses face increasing pressure from regulations, investors, and consumers to ensure transparency and sustainability in their wider operations, effective stakeholder management will be crucial in 2024. Businesses who are able to effectively engage suppliers, partners and investors on their sustainability journey will be able to reap the vast strategic benefits of decarbonisation. To do so, businesses must undertake stakeholder engagement initiatives such as:

• Setting and validating net-zero targets
• Risk and opportunity analysis
• Carbon footprint calculation and validation
• Incorporating climate-related considerations into critical decision-making processes
• Repositioning to meet the increasingly sustainable demands of consumers
• Ensuring clear and transparent communications?

What technologies are businesses using for stakeholder engagement in 2024?

1. Supplier relationship management (SRM) systems: SRM technologies are emerging as a fundamental stakeholder engagement tool as they provide a centralised platform for businesses to manage their relationships with suppliers. Such technology also often facilitates collaboration between stakeholders, allowing suppliers, manufacturers, and distributors to work together towards common sustainability objectives.
2. Decarbonisation software: Corporate entities will adopt comprehensive decarbonisation software solutions to engage stakeholders in 2024.? Not only will such solutions enable businesses to collect data, measure their emissions, and ensure compliance with sustainability disclosures — but comprehensive sustainability software will provide businesses with expert guidance on engaging with suppliers and communicating with internal and external stakeholders along the entire net-zero journey.?

The critical year of 2024 represents a landmark in advancing climate disclosure, developing low-carbon business models, engaging value chains and leveraging technology for accountability and transparency. Such trends highlight the importance of embracing technological solutions for effective supplier engagement and stakeholder communication, advocating for a robust, data-driven approach to sustainability in 2024. Book a demo with Plan A today.?

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