Sustainability Trends 2024: Sustainability is not going to be merely a buzzword but a strategic imperative that will span political, economic, and social dimensions
As the world grapples with the urgent need for sustainable development, 2024 promises to be a pivotal year marked by geopolitical tensions, crucial elections, economic shifts, and a heightened global focus on climate action. From limiting temperature rise to fostering cleaner economies, several trends are expected to shape the sustainability landscape.
The role of politics in shaping and implementing effective measures for climate action cannot be overstated. Political decisions influence the policies, regulations, and international collaborations necessary to combat climate change. As we navigate the complexities of climate change, political leadership remains instrumental in driving meaningful and impactful climate action on a global scale.
Two of the world's largest democracies, which also happen to be two of the highest emitting economies on the planet, India and the United States, are heading for elections in 2024. With the impending elections, the world is closely watching how these nations align their policies to limit the rise in global temperatures to 1.5 degrees Celsius. The outcomes of these elections will significantly influence the global climate agenda.
Yet, the scenario in China paints a somewhat more optimistic outlook for the climate discourse. According to an article in CarbonBrief, despite a modest economic recovery from COVID-19, China has not embarked on major infrastructure expansions as seen after previous economic shocks.
Notably, there has been a surge in investment in manufacturing capacity for low-carbon technologies like solar, electric vehicles, and batteries, creating a significant interest group in China that could influence its climate policies domestically and internationally.
The expansion of coal power capacity poses a challenge, setting the stage for a potential conflict between traditional and emerging interest groups. However, overall, these dynamics suggest a likely decline in China's CO2 emissions in 2024, especially if efforts to hinder the growth of wind and solar capacity by coal interests prove unsuccessful, potentially leading to a prolonged structural decline in fossil fuel use and emissions.
In the realm of trade, instruments similar to the European Union's Carbon Border Adjustment Mechanism (CBAM) are gaining prominence. Such measures act as trade barriers, incentivizing sustainable practices by imposing levies on goods from countries with lax environmental standards. The integration of environmental considerations into trade policies reflects a growing commitment to harmonising economic growth with ecological responsibility.
As sustainability regulations tighten globally, businesses will face an increase in compliance requirements and associated costs. Governments and international bodies are likely to impose stricter standards to ensure companies adhere to sustainable practices.
This shift will necessitate a reevaluation of business processes and investments in sustainable technologies.
As the Indian economy continues on its upward trajectory, companies are likely to align their operations with global sustainability goals, fostering a more responsible and resilient business environment.
Sustainability is set to become a critical boardroom discussion, with businesses recognising the interdependence of economic success, environmental stewardship, and social responsibility and the need to incorporate ESG criteria into decision-making processes.
Further, consumers are increasingly steering purchasing decisions towards environmentally, socially, and ethically responsible products. A 2023 article by McKinsey titled “Consumers care about sustainability—and back it up with their wallets” aptly sums up the changing market dynamic with regard to consumer sentiment towards sustainability.
Companies that prioritise sustainability in their product offerings are likely to see increased customer loyalty and positive brand perception. Moreover, increased digitalization and automation and the subsequent integration of AI in sustainability efforts are set to play a crucial role in driving operational efficiencies, optimising resource utilisation, and enhancing overall performance.
Beyond individual company efforts, there is also a rising interest in ensuring sustainability across entire value chains. Businesses are recognising the need for transparency and responsibility throughout the production process. Collaborative initiatives with suppliers and partners to create a more sustainable and transparent supply chain are expected to gain traction.
Another trend on the rise, fueled by a growing awareness of the environmental impact of traditional transportation, is the demand for clean mobility solutions. Opportunities abound for clean tech companies as governments and consumers alike seek alternatives to traditional fossil fuel-powered vehicles. The push for cleaner air and water is also steering innovation and investment towards sustainable technologies.
The financial sector is also undergoing a transformation, with an increased focus on sustainable financing. Investors are directing funds towards projects and businesses that align with ESG principles. The integration of sustainability metrics into financial decision-making is expected to accelerate, marking a paradigm shift in how capital is allocated.
Lastly, the concept of just transition also continues to gain prominence as a crucial aspect of climate policy and social justice. The idea emphasises a fair and inclusive shift from traditional, carbon-intensive industries to more sustainable and environmentally friendly alternatives.
Going forward, the outlook for a just transition remains optimistic, reflecting a growing commitment to balancing ecological imperatives with social equity in the pursuit of a sustainable future.
Despite the plethora of initiatives, policies, and geopolitical efforts aimed at curbing emissions, it remains highly probable that global emissions will see an absolute increase in 2024. While strides may be made in reducing emission intensity relative to GDP, overall absolute emissions are anticipated to rise.
The complex interplay of economic activities, policy effectiveness, and geopolitical dynamics underscores the formidable challenges in achieving a significant reduction in global carbon output in the immediate future.
To conclude, in 2024, sustainability is not merely a buzzword; it is a strategic imperative that spans political, economic, and social dimensions. However, balancing economic growth with sustainability goals remains a complex task on the global stage.
As nations, businesses, and consumers recognise the urgent need for responsible and sustainable practices, the trends outlined above will shape a more conscientious and responsible future that will not only ensure a healthier planet but also contribute to the long-term success and resilience of businesses on a global scale.
(Prabodha Acharya is Chief Sustainability Officer, JSW Group, Anuna Banerjee, Deputy Manager, Corporate Sustainability, JSW Group.)