In 2024, sustainability is taking center stage.
Efforts to track and reduce emissions, environmental impact and contributions to climate change are no longer rare or optional; instead, they’ve become the norm. Businesses, governments and individuals now see sustainability as a global imperative. Advanced technologies, more stringent reporting standards and stronger support from stakeholders are building momentum for eco-friendly initiatives and the incentives that encourage them. Here’s what to watch:
Net zero: The race moves forward
The global focus on achieving net-zero emissions—the point which human-caused greenhouse gas emissions are balanced by an equivalent amount removed from the atmosphere—has intensified in recent years. Many countries have committed to reaching net zero by 2050, aligning with the Paris Agreement’s goal to limit global warming to well below 2 degrees Celsius. And businesses across various sectors are setting rigorous sustainability goals, investing in renewable energy sources and developing innovative solutions to reduce their carbon footprint. These efforts are often driven by stakeholder expectations, regulatory requirements and the recognition that sustainable business practices can improve the bottom line. And they could drive economic gains: Research shows markets for carbon-neutral goods and services may be worth $10.3 trillion to the global economy by 2050.1
In pursuit of net zero, organizations will focus their sustainability efforts on two paths in 2024:
- Clean energy: The transition from fossil fuels to renewable energy sources is central to sustainability strategies and net zero initiatives, and was a central issue last year at the United Nations’ COP28 climate summit. As part of their energy transition plans, many countries are increasing their use of clean energy—that is, power generated from recyclable and regenerating sources, such as solar, wind, geothermal and more—to reduce their carbon footprint. Companies are investing in renewable energy projects and implementing energy-efficient technologies and practices. These efforts often go hand in hand with broader corporate sustainability initiatives and can lead to significant cost savings and improved environmental performance.
- Sustainable supply chains: Driven by increasing consumer demand for sustainable products and heightened awareness of the environmental impact of producing and shipping goods, more businesses are looking to make their supply chain operations more sustainable. This may include using more eco-friendly packaging or production materials and reducing waste, as well as human-centered efforts such as ensuring fair labor practices and safe work environments. These changes often require rethinking organizational practices and developing new partnerships. Businesses are increasingly aware that their impact goes beyond their own operations; as a result, they’re taking steps to address Scope 3 carbon emissions, or those emitted by other operators in their value chain.
Sustainability reporting: Accountability on the record
This may be the biggest year yet in sustainability reporting. The European Union’s Corporate Sustainability Reporting Directive (CSRD), which requires companies in Europe and beyond to make annual reports on the environmental and social impact of their business activities, came into effect in January. In addition to CSRD, California has new mandatory reporting rules coming into play in 2024, while countries around the world are on the verge of implementing their own non-financial disclosure and documentation requirements.
Investors, regulators and stakeholders are increasingly demanding that companies disclose their exposure to climate-related risks , such as dependence on fossil fuels or vulnerability to weather events. Through both mandatory reporting and voluntary disclosures, companies can identify and manage climate-related risks, and provide valuable information to investors and other stakeholders for greater transparency.
Reporting is also becoming critical to corporate social responsibility initiatives. As more companies set broad environmental, social and governance (ESG) goals, finding a way to track and accurately document progress is increasingly important. The transparency provided by regular and thorough reporting is one way to help avoid greenwashing, or misleading claims about sustainability and environmental impact. With regulated documentation, consumers, governments and other stakeholders can make better decisions based on trustworthy information.
But compliance with the broad array of mandatory reporting rules around the globe can be confusing and complicated. One survey found that 81% of companies were creating new roles and responsibilities to accommodate the growing number of disclosure requirements, while 99% of companies said they were somewhat or very likely to invest in more technologies and tools related to ESG reporting.2 For example, some are turning to software solutions that can more easily capture, manage and report ESG data.
Circular economy: When waste is a resource
Waste not, want not: the circular economy model, which aims to minimize unnecessary waste and make the most of resources, is booming. Instead of seeing things as disposable, it encourages the reuse and recycling of products. Research expects that transitioning to a circular economy could generate USD 4.5 trillion in economic benefits by 2030.3
Businesses play a crucial role in promoting the circular economy by redesigning products to be more durable, reusable or recyclable, cutting down resource consumption and reducing waste throughout the product life cycle. Retailers, particularly in the fashion industry, are increasingly embracing circular business models: rental and resale programs offer opportunities for growth, while repair services offer an alternative to landfill disposal. Other businesses are getting involved by providing avenues for extending product life or plans for recycling or refurbishment.
Biodiversity: Embracing nature-positive
Biodiversity loss, one of the impacts of climate change and ecosystem disruption, poses a significant threat to Earth’s future. The World Economic Forum’s Global Risks Report ranks biodiversity loss among the top five threats to humanity in the next decade, with over half of the world’s GDP being moderately or highly dependent on nature.4
Efforts to preserve biodiversity and natural resources gained momentum in December 2022, when countries signed a global biodiversity framework at the United Nations’ COP15 summit. Governments, businesses, and non-profit organizations globally are implementing initiatives such as establishing protected areas, restoring degraded ecosystems and promoting sustainable agriculture and forestry practices.
They’re also turning to a new perspective: “nature positive.” Similar to “carbon neutral” in the context of emissions, nature positive refers to stopping, avoiding and reversing environmental destruction. This can be quantified by measuring metrics like tree cover, habitat integrity and number of species, and is guided by sustainable development principles. The goal is for there to be more nature by 2030 than there is today—which means taking actionable steps in 2024.
Sustainable technology: New ways to do more
With a boom in artificial intelligence (AI), machine learning (ML) and a host of other advanced technologies, 2024 is poised to the be the year for tech-driven sustainability. As companies consider their climate impact in the coming year, several tools and capabilities can help guide key sustainability goals:
- Artificial intelligence: AI can help optimize energy consumption, reduce emissions and support decision-making processes in sustainability strategy development. Some organizations are leveraging AI’s capabilities to pursue their own sustainability—for example, to provide more accurate climate predictions, optimize energy use in buildings or identify areas of waste or inefficiency in the supply chain.
- Industry 4.0: Manufacturers are integrating new technologies, including Internet of Things (IoT), cloud computing and AI and machine learning, into their production facilities and throughout their operations. The smart factories that make up Industry 4.0 have capabilities that lead to increased automation, predictive maintenance, self-optimization of process improvements and efficiencies that reduce both emissions and overall costs.
- Software solutions: As mentioned, software solutions can help companies navigate the increasingly complex web of mandatory ESG reporting requirements. The IBM Envizi ESG Suite, for example, can collect hundreds of data types efficiently, analyze data across silos and deliver audit-ready reports easily—a process that would otherwise be labor and cost intensive. Environment, health and safety (EHS) software can streamline data collection and incident reporting, track safety inspections and certifications, and guide risk assessment and mitigation, while environmental intelligence software can monitor weather for potential disruptions and inform decision-making.
Sustainability trends for 2024: The year ahead
As we move through 2024, these sustainability trends will shape global responses to the pressing challenges of climate action and environmental impact. By understanding these key sustainability trends, your organization can better navigate the path to a more sustainable future.
1 Green transition creates $10.3T opportunity for the global economy by 2050, a new report finds (Link resides outside ibm.com), January 2023
2 Sustainability Action Report (link resides outside ibm.com), Deloitte, December 2022
3 The Circular Economy Could Unlock $4.5 trillion of Economic Growth (Link resides outside ibm.com), Accenture, September 2015