illustration of ESG Trends

Top Sustainability Trends to Watch in 2024 

We have carefully curated insights from esteemed sources in our analysis. Drawing from Andrew Winston’s thought-provoking piece in Sloan Management Review on January 23, 2024, S&P Global’s comprehensive Sustainability Trends report released on January 15, 2024, and the enlightening article on Seven Key Trends in ESG from Harvard Law School dated January 14, 2024, we present a refined selection of key perspectives. 

These are listed as sources at the end of this article, along with other recommended reading. 

    

The impacts of responding – or failing to respond – to climate change will be more significant. 

Climate change adaptation, or the lack thereof, could result in an annual loss of up to 4.4% of the global GDP. This impact will vary across different sectors, with communication, finance, and health industries being most affected. According to S&P’s analysis, climate change could erode 3.3% of companies’ values annually up to 2050. As these effects accumulate over time, financing adaptation efforts may become more challenging due to higher interest rates and slower economic growth, posing a significant hurdle for companies, especially those in developing nations. 

  

  

Increased attention and investments will be directed towards sustainability reporting 

The previous year marked a significant shift towards transparency and sustainability reporting. Leading the charge, the EU introduced the Corporate Sustainability Reporting directive, while California, boasting the fifth-largest economy globally, enacted two climate-focused laws. 

According to Dansk Industri, companies are projected to allocate as much funds towards non-financial reporting as they currently do towards financial reporting. 

Harvard anticipates a surge in AI-driven software that not only meets ESG reporting standards but also predicts potential deviations in advance. This innovative technology will reinforce the alignment of business models with sustainability goals and significantly enhance relationships with all stakeholders. 

  

  

The growth of clean technology is set to persist and flourish 

The International Energy Agency projected a significant surge in global renewable energy capacity by 2023, estimated at a whopping 440 gigawatts – equivalent to the combined energy output of Germany and Spain. With renewable energy proving to be more cost-effective in various markets, the momentum for expansion is poised to continue. Notably, even at the oil-centric climate summit in Dubai (COP28, held in December), there was a consensus on transitioning from fossil fuels to renewable energy sources. 

  

 

Partnerships to address sustainability issues at scale will grow 

Andrew Wilson anticipates that in 2024, we can expect declarations of binding climate cooperation from international organizations. This alignment often coincides with Earth Day in April, the UN General Assembly in September, and the global COP meeting in December of 2023. These signals indicate a growing commitment to climate action in industries that are major carbon emitters, such as cement, steel, and aluminum. Additionally, consumers are showing a strong interest in purchasing more environmentally friendly versions of these products, creating new market opportunities for innovative technologies. While challenges may arise as we transition from discussions to practical implementation, Wilson is optimistic about the acceleration of holistic systems thinking in addressing sustainability challenges. 

  

Explore further insights on sustainability trends 

Below you will find a selection of sources for increased knowledge about trends in sustainability and ESG. 

Sloan Management Review: https://sloanreview.mit.edu/article/seven-sustainability-trends-to-watch-in-2024/  

The Sustainability Project: https://impact.economist.com/sustainability/net-zero-and-energy/what-are-the-top-sustainability-trends-for-2024  

S&P Global: https://www.spglobal.com/esg/insights/featured/special-editorial/key-2024-sustainability-trends-driving-the-year-ahead  

Forbes: https://www.forbes.com/sites/solitairetownsend/2023/12/22/five-big-sustainability-prophesies-for-2024/  

  Harvard University: https://corpgov.law.harvard.edu/2024/01/14/seven-key-trends-in-esg-for-2023-and-what-to-expect-in-2024/