Predicting the future is a fool’s errand, but why let that stop us? Last year was volatile, and so was everything around corporate sustainability. The big stories of 2023 included the “anti-ESG” movement’s silencing effect on many companies; the explosion of clean tech; new reporting laws that are pressuring companies to measure and do more; and most oddly, the annual global climate meeting held in the United Arab Emirates, a petro-state.
So, what will 2024 look like? With the caveat that we’re in a time of chaos (which makes prediction especially challenging), here’s my take for leaders on what will come from the sustainability landscape this year. Starting with the prediction I’m most confident in and ending with the least likely, here are seven big, evolving stories that deserve close attention.
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1. Climate change will get worse. This is mostly about physics, not prophecy. 2023 has been declared the hottest year on record, and in terms of climate impacts, there’s no going back. As many people have said, the coolest, most climate-stable summer of your life was the last one. Climate chaos will continue to bring us major wildfires, extreme floods and storms, heat waves and droughts, and more. We will also see a degradation of natural systems and declines in biodiversity.
Companies will feel all of these impacts throughout their operations and supply chains, and they will need to develop better skills in managing volatility. But, on the bright side, I’m confident that awareness of our challenges will continue to rise rapidly. As younger people become a larger part of the workforce and consumer base, pressure for corporate and government action — and the skills and determination to do something about the crisis — will rise.
2. Elections will dramatically influence the future of sustainability and climate action. Roughly half of humanity will vote in national elections this year. Eyes will be on India, the U.K., Indonesia, Russia, Pakistan, Mexico, and many more.
But the U.S. election, of course, will get extra attention. Pundits will fill the airwaves for the next 10 months, but nobody — nobody — has any clue what will happen. But what is certain is that these elections are critical to everyone’s future, and how countries address climate change, inequality, and other societal issues (or don’t) will clearly impact business. On climate specifically, as a Bloomberg article recently declared, “If Donald Trump wins this November, U.S. Republicans are promising … a brutal assault on climate action … with the ultimate aim of repealing the landmark Inflation Reduction Act. A Trump victory would also add another strident climate denier to the roster of world leaders.”
Conversely, if Biden wins (and Democrats control the U.S. Congress), I expect that commitments in the U.S. on climate action will accelerate — along with commitments to democracy and the protection of human rights. In this case, companies should prepare to take advantage of massive investments in clean tech and more. With this election, the stakes are as high as they get.
3. Sustainability reporting will garner more attention and investment within companies. Last year was a big one for transparency and reporting regulations. The European Union drove the agenda with the Corporate Sustainability Reporting Directive, but California — on its own the fifth-largest economy in the world — also passed two climate-related disclosure bills.
Companies and sustainability execs were generally overwhelmed with the new requirements, and the year ahead should bring some increased investment in compliance. A Danish industry association estimated that companies will have to spend as much money on nonfinancial reporting as they currently do on financial reporting. That’s stunning. Millions of people work in accounting or finance in a system that generates billions of dollars in fees for accounting firms. If that estimate is even partly on target, then this year it will become much clearer to multinationals that they need to throw more people and money at reporting.
The next year should bring some increased investment in sustainability compliance.
4. Clean tech will continue to expand. The International Energy Agency estimated that in 2023, the world added a stunning 440 gigawatts of renewable capacity — more than all of the electric capacity of Germany and Spain combined. China alone added more solar than the existing solar capacity in the U.S. This rapid expansion is being driven partly by aggressive policy (like the Inflation Reduction Act in the U.S.). But even if political winds shift, the real momentum now is economics: Renewables are cheaper in most places, so the expansion will continue. Multitrillion-dollar markets are in play.
Some parts of the transition might face headwinds, such as the solar sector contending with inflation and supply chain issues. But no industry buildout is a straight line, and the train has left the station on clean energy, electric vehicles, smart grids, building efficiency, and more. The transition is inevitable, which even the oil-drenched climate meeting (COP28, held in December in Dubai) agreed to with its final commitment to “transition away” from fossil fuels.
5. Distractions and strawman arguments will proliferate. Clean tech’s expansion threatens some very rich and powerful vested interests. Major players in the fossil fuel industry, such as ExxonMobil, spent decades muddying the science on climate — while they knew very well what was happening, according to a study published in Science.
Today, many anti-climate-action stories have become more subtle, moving from “It’s not happening” to “It’s too expensive” (which is, increasingly, blindingly and obviously untrue) to now declaring that EVs are worse for the planet because they do have a footprint (just one of the myths that the U.S. Environmental Production Agency debunks on its website). We’re also seeing strawman statements like, “We can’t just shut down fossil fuels immediately” — something that nobody serious is suggesting. Companies on the decarbonization path will need to cut through this noise and keep moving.
6. Partnerships to tackle sustainability issues at scale will grow. A few times a year — around Earth Day in April, the week of the United Nations General Assembly meetings in September, and the global COP meeting in December — we always see a flood of commitment statements about climate and many more issues. One area of focus that grew in 2023 was collaborations in the sectors producing the most carbon-intensive materials in the world (cement, steel, aluminum, and so on). We also saw more customer companies commit to buying greener versions of such products, creating markets for new technologies. It’s possible that announcements will slow as the real work begins, but I think we’ll see an acceleration of systems thinking.
7. The threat of the anti-ESG movement will wane. This is at the bottom of the prediction list (ranked by likelihood) because it might be my wishful thinking. The anti-ESG story was the biggest issue in corporate sustainability over the past 12 to 18 months. It deeply affected how companies acted, spawning a new word — “greenhushing” — to describe how companies got much quieter about their sustainability efforts. This has been a U.S.-based phenomenon, but it has affected multinationals everywhere.
That said, both anecdotal evidence and data show that companies are continuing with their efforts. A company’s initiative to decarbonize the business, for example, is a long-term investment, and once it’s moving (and profitable), it’s hard to stop. Or if a company has set public gender parity or other diversity goals, it’s difficult to go back. This year, it should become clearer to politicians that they’re not getting as much mileage from attacking “woke” companies as they’d like. Businesses will continue to find that investing in sustainability and committing to social values and progress not only pays off but is the right thing to do and something their stakeholders reward them for.
We are in a time of chaos, where the outcomes of nearly everything, especially elections, are unknowable. There will be black swans, unknown unknowns, or major system shocks. They will definitely happen in a world this complex and interconnected. But who knows what those will be. Dealing with duality and uncertainty, and developing resilience, will be skill sets to hone this year.
As someone wise once said — and people have attributed it to Abraham Lincoln, Peter Drucker, and others — the best way to predict the future is to invent it. If we want more partnerships, or more bravery in the face of anti-sustainability fervor, or for pro-climate leaders to win elections, then we should get out there and work for it. Let’s make sure the big themes from 2024 end up being the ones that help build a thriving world.