In today’s increasingly interconnected world, businesses are facing growing pressure to operate in a sustainable and responsible manner. This has led to the rise of ESG, which stands for environmental, social, and governance.
ESG is a framework for measuring a company’s non-financial performance, taking into account its impact on the environment, society, and governance.
ESG trends are the evolving expectations and practices that businesses are adopting to meet the challenges of sustainability. These trends are driven by a number of factors, including:
- Increased investor interest in ESG: Investors are increasingly recognising the importance of ESG factors in their investment decisions. This is due to the growing understanding that ESG factors can have a material impact on a company’s financial performance.
- Greater consumer demand for sustainable products and services: Consumers are increasingly demanding products and services from companies that are committed to sustainability. This is leading businesses to adopt more sustainable practices in order to meet consumer demand.
- Regulatory changes: Governments around the world are implementing regulations to promote sustainable business practices. This is putting additional pressure on businesses to adopt ESG practices.
Top ESG trends for 2024
There are a number of ESG trends that are expected to be important in 2024. These trends include:
Increased focus on Scope 3 emissions:
Scope 3 emissions are the indirect emissions that occur up and down a company’s value chain. These emissions are often more difficult to measure and control than Scope 1 and 2 emissions, but they can be a significant source of a company’s environmental impact.
In 2024, businesses will be under increasing pressure to track and reduce their Scope 3 emissions. This will require them to work closely with their suppliers and customers to identify and implement emission-reduction strategies.
Demand for transparency and accountability:
Consumers and investors are increasingly demanding transparency from businesses about their sustainability practices. They want to know how companies are measuring and managing their environmental impact, as well as how they are addressing social and governance issues.
In 2024, businesses will need to be more transparent about their sustainability performance. This will involve regularly reporting on their progress, as well as providing assurance to stakeholders that their data is accurate and reliable.
Adoption of circular economy principles:
The circular economy is a model of production and consumption that aims to eliminate waste and pollution. It involves designing products that can be easily repaired, reused, or recycled, as well as extending the lifespan of products through maintenance and upgrades.
In 2024, businesses will increasingly adopt circular economy principles. This will involve developing new products and services that are designed for circularity, as well as implementing waste reduction and recycling programs.
Investments in renewable energy and energy efficiency:
The transition to renewable energy sources, such as solar and wind power, is essential for reducing greenhouse gas emissions. Businesses are also investing in energy efficiency measures to reduce their energy consumption.
In 2024, businesses will continue to invest in renewable energy and energy efficiency. This will help them to reduce their carbon footprint, as well as save money on energy costs.
Embracing nature-based solutions:
Nature-based solutions are actions that use natural systems to address environmental challenges, such as climate change and biodiversity loss. Examples of nature-based solutions include planting trees, restoring wetlands, and protecting forests.
In 2024, businesses will increasingly embrace nature-based solutions. This will help them to mitigate their environmental impact, as well as create positive social and economic benefits.
How to embrace ESG trends
There are a number of things that businesses can do to embrace ESG trends and incorporate sustainable practices into their operations. Here are a few tips:
- Set ambitious sustainability goals. What do you want to achieve in terms of environmental impact, social responsibility, and governance?
- Measure and track your progress. It’s important to track your progress against your sustainability goals so that you can identify areas for improvement.
- Communicate your sustainability efforts to stakeholders. Let your employees, customers, investors, and the public know about your commitment to sustainability.
- Seek out partnerships. Collaborate with other businesses, NGOs, and government agencies to advance sustainability.
ESG trends are important because they help to further develop the practices and priorities of a business when it comes to ESG factors and potential ESG investments.
ESG factors are becoming a common way to measure a company’s efforts towards sustainability – meaning that paying attention to ESG trends is important for businesses who want to find long-term success.
Previous ESG trends:
- Diversity, Equity, and Inclusion (DEI)
- Carbon Neutrality
- Stakeholder Engagement
- ESG Reporting
- Sustainable Supply Chains
- Ethical Investments
Previous trends source: Greenly.earth
There are a number of resources available to help businesses learn more about ESG and implement sustainable practices. Here are a few suggestions:
- The Sustainability Accounting Standards Board (SASB): SASB provides industry-specific ESG reporting standards.
- The Task Force on Climate-Related Financial Disclosures (TCFD): TCFD provides recommendations for companies to report on their climate-related