10 Sustainability Trends to Live and Breathe Your Environmental Credentials

In the face of climate change and dwindling natural resources, it’s more important than ever for companies to follow business sustainability trends and practices. Governments, investors, employees, and customers are not only expecting higher levels of accountability — they’re demanding action.

Whether you’re looking to improve your sustainability practices or communicate them more effectively, understanding the latest sustainability trends is the key to a successful path forward. That’s why we’ve used our expertise at Business2Community to curate 10 of the most important sustainability trends to follow in 2024 and beyond.

What are 2024’s Sustainability Trends?

As the world shifts its focus towards a green economy, sustainable business practices have become the key to survival and achieving a competitive advantage. In 2024 and beyond, businesses that respond to sustainability trends with strong sustainability commitments and initiatives will experience benefits such as:

• Improved reputation
• Cost savings
• Attractiveness to investors
• Increased sales
• Customer and employee retention

With that, let’s explore 10 key sustainability trends in greater detail.

1. You Need to Keep Pace with Changing Customer Attitudes

According to a June 2023 PwC consumer report, 80% of consumers indicated that sustainability was important to them. A 2023 EY report further found that:

• 56% of consumers are more likely to buy from companies whose actions have a positive impact on society.
• 49% of consumers prioritize the environment and climate change in how they live and the products they buy.
• 26% of consumers say sustainability will be their most important purchase criteria three years from now.

Shifting attitudes are also reflected in consumer spending habits — a majority of consumers are now willing to pay a premium for goods from environmentally responsible brands.

• Around 80% of consumers are willing to pay a 5% premium.
• 50% are willing to pay a premium of between 6-10%.
• 30% are willing to pay over 10%.

2. Perfect Your Sustainability Messaging

With a third of global consumers willing to pay up to 25% more for sustainable products, businesses are increasingly leaning into sustainability messaging to boost their pricing power.

In first-of-its-kind research, the NYU Stern Center for Sustainable Business (CSB) and Edelman found that effective sustainability messaging can enhance brand reach among consumers by up to 33%.

The study, done in partnership with nine leading global brands spanning apparel, food and beverage, technology, household items, and personal care found that the strongest performing claims were related to sustainability benefits for consumers’ lives, families, and experiences.

Consumers also reacted strongly to:

• Claims regarding animal health
• Sustainable sourcing
• Local sourcing
• Children and future generations
• Support for local farmers

However, they were notably less interested in the scientific messaging behind a brand’s sustainability claims, unless it was linked to a self-centered reason to care or related to the outcome of a specific action.

For example, a message promoting “reduced air pollution for cleaner air to breathe” was more likely to resonate with consumers than a claim promising “reduced air pollution”.

Once considered divisive, sustainability messaging now appeals to consumers across political affiliation, income, gender, education levels, and age groups. Ultimately, done correctly, sustainability messaging is a brand amplifier that can increase growth and trust across demographics.

Businesses and marketers looking to take advantage of this sustainability trend should adhere to the following guidelines:

• Link sustainability to a product’s core value proposition.
• Avoid technical sustainability claims/jargon when speaking to mass consumers and focus on the result, not the process.
• Link sustainability claims to a personal benefit.

According to the research, examples of effective sustainability messaging include:

• “Every ingredient is traceable to your local farmer”
• “100% sustainably sourced ingredients/materials”
• “saving you money on energy bills”
• “…for future generations” or “…for you and your children”

In another 2023 study by McKinsey, products making sustainability-related claims on their packaging have averaged 28% cumulative growth over the past five years, versus 20% for products that haven’t.

The same study found that large and small brands alike benefit from making valid sustainability claims.

In 59% of all categories studied, the smallest brands making such claims achieved growth. Similarly, in 50% of the categories, the largest brands making sustainability claims also experienced growth.

The study also found that unique or less common claims like “vegan” or “carbon zero” helped products grow 8.5% more compared to others. Medium-common claims like “sustainable packaging” led to a 4.7% growth advantage.

Common claims like “environmentally sustainable” didn’t make much difference in growth. This suggests that unique claims might help products stand out and grow.

3. Consumers are Cracking Down on Greenwashing

Greenwashing, or misleading claims about sustainability are on the rise. A study by the European Union found that 53% of green claims on products and services were vague, misleading, or unfounded and 40% had no supporting evidence. In the US, that number was even higher, with 68% of executives admitting to greenwashing.

Trends highlight increased scrutiny of brands perceived to be greenwashing. Companies are being held accountable for their environmental and social impact claims through stricter consumer protection regulations, greater levels of enforcement, and higher penalties.

In 2022, Italian oil producer, Eni made history by being the first in the country to be prosecuted for greenwashing. The company was fined $5.94 million for claiming that its palm oil-based diesel was “green” in an advertising campaign.

Similarly, in Canada, Keurig was sued for falsely claiming its coffee pods were recyclable and biodegradable and fined $3 million for misleading advertising.

Customer Satisfaction Implications

Harvard Business Review (HBR) found that customers are highly aware of the gap between stated claims and implementation, and their satisfaction levels, as measured by ACSI, fall as the number of claims outweighs the number of actions.

This disconnect can trigger perceptions of hypocrisy, erode trust, and negatively affect a customer’s experience with a product.

Companies caught greenwashing suffer a 1.34% drop in their ACSI customer satisfaction score. As companies already compete within a relatively narrow range of ACSI scores, this drop is significant.

A change of just one unit in customer satisfaction can result in lower net earnings per share (EPS) and return on investment (ROI).

Offsetting Scams

Companies have long relied on carbon offsetting schemes as a way to lower their carbon footprint. However, in recent months, well-known offsetting schemes have been exposed as greenwashing scams.

An investigation by the Guardian found that 90% of carbon offsets certified by Verra, the industry-leading standard, had no impact.

In response to this, the UK Advertising Standards Authority (ASA) issued revised guidelines, pledging to ban ads that fail to substantiate their carbon removal claims.

Greenhushing

In an emerging trend, companies are choosing to stay quiet about their emissions-reduction goals. This comes as the state of Texas banned local entities from doing business with certain financial firms, due to their declared intention to factor concerns about fossil fuels into their investment decisions.

The decision is expected to cost local entities as much as $532 million in additional interest over eight months.

A South Pole report revealed that to avoid similar retaliation, many firms are going radio silent. Nearly 25% of 1,200 firms surveyed didn’t plan to publicize their science-based emissions targets.

Unfortunately, this limits knowledge-sharing on decarbonization, which could potentially lead to less ambitious targets being set, and missed opportunities for industries to collaborate.

4. Businesses Need to Take Action on Climate Change

To mitigate climate change, meet the +1.5°C target set out in the 2015 Paris Climate Agreement, and reach net zero emissions by 2050, more than 4,000 companies across the globe are reducing greenhouse gas emissions through the Science Based Targets initiative (SBTi).

Science-based targets guide companies in reducing GHG emissions, steering them towards decarbonization.

Through science-based target setting, SBTi helps companies in the private sector address climate change and enhance their competitiveness in transitioning to a net-zero economy. This has meant that:

• Since March 2023, over 2,300 companies have had science-based targets approved with the SBTi.
• 33% of global market capitalization has committed to climate action through the SBTi.
• 1.5 billion tonnes of CO2 are covered by the SBTi (scopes 1 and 2).
• Since 2021 over 53 million tonnes of CO2 emissions have been reduced across all targets.

Clean Energy Transition

Consumers, businesses, and governments worldwide are moving away from fossil fuels to clean energy to reduce emissions, improve energy security, and reduce the impact of climate change.

Renewable energy sources include:

• Solar
• Wind
• Water (hydropower, tides, and waves)
• Biomass
• Geothermal

The Center for Climate and Energy Solutions (C2es) reports that businesses with sustainability goals are:

• Driving renewable energy generation by building their own facilities (solar roofs and wind farms).
• Procuring renewable electricity through power purchase agreements.
• Purchasing renewable energy certificates (RECs).

The C2es also reports that:

• Renewable energy is the fastest-growing energy source in the US, increasing 42% between 2010 and 2020.
• Almost 5% of the energy consumed across sectors in the US was from renewable energy sources in 2020 and consumption of renewables is expected to grow over the next 30 years at an average annual rate of 2.4%.
• Renewables made up 19.8% of electricity generation in 2020, with hydro and wind making up the majority. That’s expected to rise to 35% by 2030, with the highest increase expected to come from solar.

Globally as well as in the US, renewable energy is the fastest-growing energy source. About 11.2% of the energy consumed globally for heating, power, and transportation came from modern renewables in 2019 (biomass, geothermal, solar, hydro, wind, and biofuels), up from 8.7% a decade prior.

Energy Efficiency

On the journey to net zero emissions, companies that build carbon reduction competencies across their operations or secure a steady supply of low-carbon raw materials are guaranteed a lasting edge in the marketplace.

Companies in chemicals, pulp and paper, oil and gas, metals, and other process industries are going after the dual benefit of cost and carbon reductions by improving energy efficiency and process yields, and by shifting to lower-carbon raw materials and feedstocks.

5. Sustainable Supply Chains Boost Your Business

According to an ERM Sustainability Institute report, over 75% of US logistics managers expect supply chain challenges to continue beyond 2023.

Supply chain problems, ongoing from the COVID-19 pandemic and worsened by the wars in Ukraine and Gaza, are likely to persist. Recognizing the value of supply chains for long-term success, companies are enhancing their supply chain sustainability management.

EcoVadis, a supply chain sustainability rater, saw a 61% increase in assessed companies between 2017 and 2021, with a notable increase between 2020 to 2021.

In its latest assessment, EcoVadis found that 53,000 companies across various sizes, industries, and regions had significantly improved their sustainability management practices. These improvements included better sustainable operations, procurement systems, and human rights due diligence.

Risk Mitigation

Supplier location continues to play a crucial role in achieving sustainability goals, and companies are shifting production sites to less volatile regions to boost their resilience against external shocks.

Solutions are also emerging to help companies reduce sourcing risks. Using supply chain risk identification tools, companies are now able to identify ESG-related supply chain risks, score them, and engage in ongoing monitoring.

Supplier Diversity

Supplier diversity is now linked to achieving ESG goals and broader business objectives. A study showed that diverse suppliers can provide companies with annual procurement cost savings of 8.5%, compared to the typical 3 to 7% savings that most companies achieve.

6. Mandatory Sustainability Reporting is Happening

As sustainability reporting merges with regular financial reporting, companies are now being held accountable for how they are reducing carbon emissions, preventing biodiversity loss, and addressing societal inequality.

Sustainability reporting has become standard practice for the top 100 companies by revenue in 58 countries, territories, and jurisdictions. According to KPMG, 64% of these companies were reporting on sustainability 10 years ago, and in 2022, this was up to 79%.

Beyond 2023, reporting is only set to increase. In the US, a proposed SEC Climate Disclosure Rule, which focuses on comprehensive sustainability and GHG emissions reporting (covering scope 1, scope 2, and scope 3 emissions), will be finalized by the end of 2023.

Climate Risks

Climate-related deaths have decreased threefold in the last 50 years due to early warning systems and better disaster management.

Yet, natural disasters are occurring more frequently. According to the UN, there will be 560 disasters per year by 2030, a 40% increase from 2015.

As climate risks increase, regulatory trends point to mandatory sustainability reporting standards such as the Task Force on Climate-related Financial Disclosures (TCFD).

• What started as a voluntary set of recommendations is now part of the regulatory framework in many jurisdictions, including the EU, Singapore, Canada, Japan, and South Africa.
• New Zealand and the UK are mandating climate risk disclosures in line with the TCFD by 2023 and 2025, respectively.
• The urgency to act on the TCFD’s recommendations is set to increase in 2023 and beyond.

Nature and Biological Diversity Risks

According to the World Economic Forum, over 50% of the world’s economic production, valued at $44 trillion is moderately or heavily dependent on nature.

This reliance implies that nature loss, such as the recorded extinction of 83% of wild mammals and 50% of plants, poses a serious threat to both business and financial stability.

Likewise, a positive environmental transformation effort can generate up to $ 10.1 trillion in business value annually and create 395 million jobs by 2030.

With growing pressure to mitigate and understand biodiversity risk, nature-based regulation and reporting is emerging through initiatives such as the Taskforce on Nature-related Financial Disclosures (TNFD). Building on the TCFD, this standard will provide frameworks to identify, measure, and disclose nature-related risks.

Accountability Concerns

The number of companies filing corporate social responsibility (CSR) reports using the Global Reporting Initiative (GRI) standards (the most extensive available) has increased a hundredfold over the past two decades.

Yet, carbon emissions have increased steadily over this period, and environmental risks have intensified.

Unfortunately, while reporting has widely been considered an indicator of progress, a lack of accountability has turned it into a vehicle for exaggeration or greenwashing.

In a Capgemini report in 2022, less than 50% of respondents said their organization’s sustainability data was audited by a third party or used sustainability indices to benchmark progress.

7. Sustainability Regulations are Increasing

Global ESG regulation has increased by 155% over the past decade and by 647% since the turn of the millennium.

As environmental impact and energy efficiency concerns mount, more companies face regulatory pressure to adopt sustainable business practices.

Sustainability is fast becoming the “license to operate”. Governments across the world are:

• Drafting regulations that call for reduced emissions.
• Implementing green taxation.
• Enforcing stricter regulations.
• Providing grants and subsidies for meeting environmental standards.

In 2023, the Corporate Sustainability Reporting Directive (CSRD) takes effect for companies operating across Europe and foreign companies with significant operations in Europe. EU Green Deal initiatives will include:

• Decarbonization: Regulations to reduce carbon emissions.
• Greenwashing: Directives to prevent misleading environmental claims.
• Transition planning: Guidelines for transitioning to greener operations.
• Circular economy: Initiatives to promote resource efficiency and recycling.
• Sustainable finance: Regulations to channel finance towards sustainable projects.

Other notable regulations include the:

• Corporate Sustainability Due Diligence Directive (CSDDD)
• Ecodesign for Sustainable Products Regulation (ESPR) EU taxonomy.
• Sustainable Finance Disclosure Regulation (SFDR).

In the US, the sustainability regulations set to shape business operations in the next few years include:

• The Inflation Reduction Act of 2022, is a climate bill that allocated $369 billion for climate initiatives like tax breaks for energy-saving measures and carbon capture systems.
• The US Environmental Protection Agency, EPA, planned to implement stricter regulations regarding greenhouse gas emissions for large vehicles between 2023 and 2030.

Regulatory trends indicate a shift from largely voluntary frameworks to more stringent requirements regarding how companies manage human rights in their upstream operations.

For example, claims of human rights violations in the Xinjiang region of China and in other parts of the world gave rise to the Uyghur Forced Labor Prevention Act, effective June 21, 2022. This marked a historic move toward regulating the impact of human rights within corporate supply chains in the US.

Consequently, more companies, especially those in industries with high exposure to working condition risks, will incur higher costs to develop the systems and capabilities required to adhere to new regulations.

8. Social Sustainability is Trending

Recent social sustainability data reported by Economist Impact highlights the following:

• Only 6% of 374 community-centered climate programs featured locally-led initiatives.
• 25% of avoided emissions per year in North America and Canada was due to Indigenous resistance.
• $4 billion projected direct health costs per year by 2030 are due to climate change.
• 80% of people displaced by climate change identify as women.

Community Engagement

Social sustainability trends point to a growing focus on vulnerable communities in developing countries. In line with broader Sustainable Development Goals (SDGs), more companies are investing in the health, well-being, and education of local communities, employees, and suppliers.

Human Rights

Driven by rising risks and social crises, the monitoring of human rights violations in organizations and supply chains has increased.

It is vital for companies, particularly those with complex, cross-sector supply chains, to understand, monitor, and report on human rights issues to meet stakeholder expectations and avoid reputational damage.

Employee Focus

With ongoing HR and talent shortages, especially in the expanding sustainability sector, business leaders and chief sustainability officers (CSOs) are actively working to upskill employees and improve work-life balance.

71% of employees and employment seekers say that sustainable companies are more attractive employers.

Organizations that prioritize sustainability initiatives will be able to attract and retain employees, especially as younger generations seek employers with a strong social and environmental conscience.

9. The Circular Economy Comes into Focus

100 billion tons of materials are consumed annually, with over 90% becoming waste.

The amount of plastic waste in aquatic ecosystems is projected to grow to as much as 37 million tons by 2040. In light of such alarming figures, the principles of a circular economy are gaining momentum.

Circular economy principles include: designing out waste and pollution, keeping products and materials in use, and regenerating natural systems.

Applying these in just five key areas – cement, aluminum, steel, plastics, and food – could eliminate more than 9 billion tonnes of carbon emissions by 2050.

Reducing plastic waste and moving to a circular economy could save $200 billion annually in plastic production.

It could also create 700,000 jobs, cut greenhouse gas emissions by 25%, and reduce ocean plastics by 80% each year by 2040.

Companies across various sectors are taking different approaches to circularity:

• Fast fashion brand UNIQLO has responded to growing customer sustainability demands by offering affordable repair services for its products.
• Luxury retail brands like Gucci and Alexander McQueen have launched resale programs.
• By putting circularity at the center of its product development model, Australian shipping pallets and containers firm Brambles recovered and refurbished four million pallets in 2022, the equivalent of around 195,000 trees.
• Apple announced a repair program enabling the independent repair of its devices.
• Google has partnered with technology repair company iFixit to increase the fixability and usable life of its technology products.

10. AI Adoption Will Help Deliver Sustainability

2023 research by PwC models the economic impact of artificial intelligence (AI) adoption in sustainability across sectors such as agriculture, water, energy, and transport. The benefits are significant:

• Using AI for sustainability applications could add up to $5.2 trillion to the global economy by 2030, a 4.4% increase relative to business as usual.
• The application of AI levers could reduce worldwide greenhouse gas (GHG) emissions by 4% in 2030, an amount equivalent to 2.4 Gt CO2e – equivalent to the 2030 annual emissions of Australia, Canada, and Japan combined.
• Along with productivity gains, AI could create 38.2 million net new jobs across the global economy offering more skilled occupations as part of this transition.

In the Capgemini report, almost 60% of organizations are using AI and automation to achieve their sustainability objectives.

Through AI, companies are gaining granular insights into their operations and effectively measuring their impact on the environment across functions. They’re also leveraging various AI technologies to reduce costs and achieve greater efficiencies.

For example, Tokyo Hilton Bay in Japan adopted Winnow Vision, a technology that allows kitchens to track food waste using AI-based computer vision. This resulted in major cost savings and a 30% decline in food waste, or more than 17,000 meals.

Sustainability success hinges on acquiring the right data. However, 90% of essential sustainability data resides outside a company; it sits in the value chain, third-party databases, and external data repositories.

To overcome this challenge, companies are turning to AI-powered technologies to decipher sustainability-related data and enhance sustainability performance.

Expansion of these technologies has been rapid, with tech solutions helping carbon-intensive industries reduce their greenhouse gas emissions.

Collectively, these solutions have the capacity to reduce global emissions by up to 4% by 2030.

The Future of Sustainability

The future of sustainability involves a more aggressive approach to combating climate change, addressing the Sustainable Development Goals, and promoting circular economy models — all against the backdrop of rapidly evolving AI technologies, geopolitical events, and economic challenges.

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