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ESG Monthly News Update: January 2024

Lessons Learned in 2023, and a Glimpse Ahead into 2024

As we look back at 2023, a year marked by both stark environmental realities and glimmers of hope for a sustainable future, there are lessons to be learned. 2023 was a year where record-breaking heatwaves and devastating floods served as reminders of the urgency of climate action, while groundbreaking agreements and technological advancements offered a roadmap for a resilient tomorrow.

Now, with 2024 ahead, the question looms: Will this be a year of global collaboration to combat climate change and build a more equitable world for all? Below, we delve into the defining moments of 2023's sustainability landscape, dissect the emerging trends shaping the year ahead, and explore the expectations that hang heavy in the air as we embark on this crucial journey. Join us as we chart the course for a future where sustainability is not just a buzzword, but a lived reality.

Looking Back – 2023 in Review 

  • 2023 saw several advancements in sustainability, but the pace and scale of the progress is still short of what is needed, highlighting the urgency of collective action to create a more sustainable future. 

  • Decarbonization broadens: The term is everywhere, from chemicals to food systems and heavy transport, thanks to policies and incentives from the U.S. and EU. Even hard-to-abate sectors like concrete and aluminum are under the decarbonization microscope. 

  • Finance fuels climate solutions: COP28 and other forums championed finance mechanisms for the transition. Key areas include embedding nature risks into financial systems and tackling "financed emissions" associated with loans and investments. 

  • Plastic waste movement reaches a boiling point: Efforts towards a global plastics treaty and mounting pressure on companies signal a shift towards policy and legal action, moving beyond voluntary efforts. 

  • ESG recalibrates after criticism: Despite controversies, corporate accounting for environmental, social, and governance impacts is adapting. Companies are engaging in ESG strategies without the acronym, CEOs remain committed, and third-party assurance firms are adding rigor. 

  • AI emerges as a sustainability essential: From finding sustainable ingredients to optimizing emissions, AI is increasingly used to address diverse environmental challenges. However, managing its energy needs and navigating its complexities remain concerns. 


  • The International Sustainability Standards Board, with its financial backing, simple focus on climate change-related finance risks, and single materiality analysis has made it a reliable framework that corporate executives can rely on. 

  • The importance of scope 3 emissions was solidified in 2023 at the international level, both in the EU and at COP28, while the SEC has yet to provide expectations. 

  • While ESG experienced blows from Republicans and investing approaches, environmental, social, and governance issues will still be prioritized by corporations. 

  • Davos and COP28 served as platforms to discuss climate concerns, risks, and sustainable business partnerships. 

  • Ultimately, as the transition towards a more sustainable future continues, emissions from the construction industry and the materials used must be analyzed and prioritized with sustainability in mind. 


  • In 2023, although the EU Green Deal experienced conservative backlash, strides were made in fighting pollution, policing companies' misleading climate-friendly claims, and revitalizing the European critical raw material supply line. 

  • The prevalence of toxic PFAS and increased awareness of “forever chemicals” and water scandals led the European Chemical Agency to draft an EU-level PFAS ban. 

  • The center-right European People’s Party worked to weaken the nature-restoration rules, opposing farm use of pesticides, and greenhouse gas reduction, delaying the EU’s ability to release guidance to decrease emissions related to the agriculture sector. 

  • In 2023, the EU defined laws to police greenwashing claims that companies release, requiring science data to be provided to validate carbon-neutral claims. While many greenwashing cases are waiting in the courts, a carbon removal certification scheme should be before the June EU election. 

  • The negotiations of the UN plastic treaty closed out 2023 with division between oil-rich countries and environmental lawmakers. In April, negotiations will continue and hopefully, the stalemate will be ended throughout 2024. 

  • The Critical Raw Materials Act, released in March 2023, supports the EU’s ambition to support its economy through the reshoring and diversifying metals and minerals currently sourced from China.  

  • With the expected finalization of the Net Zero Industry Act by June 2024, the EU aims to fuel its “strategic autonomy” by increasing the continent’s green technology manufacturing capacity. 


  • Challenges in 2023: Climate change has become even more of a daily, relentless threat as seen in shattered heat records, wildfires, floods, and storms affecting lives worldwide. 

  • Duality in Sustainability Progress: While sustainability in business is now mainstream, there's a duality in progress. The push towards sustainability is countered by influential anti-ESG movements, creating controversies, and some companies opting for "greenhushing" amid social and media discussions. 

  • China's Leading Role in Clean Economy: China stands out as a major player in clean tech, surpassing $1 trillion in green tech investment and achieving peak gasoline demand. China's commitment to renewables and clean energy, such as substantial solar capacity additions, challenges misconceptions that it is inactive on climate issues. 

  • Rising Regulations for Sustainability Reporting: A significant focus in sustainability is on reporting, with rising regulations demanding companies measure and report on various aspects, including carbon emissions (Scope 3), water impact, biodiversity, and human rights. The EU leads with standards like the European Sustainability Reporting Standards and Corporate Sustainability Reporting Directive. 


  • A few additional trends to follow include:  

    • Emissions-heavy industries are making efforts to reduce carbon footprint through partnerships, buyer commitments, and financing frameworks. 

    • Scrutiny on company policy alignment with sustainability goals persists. 

    • Insurance companies respond to climate impacts, with State Farm discontinuing home insurance policies in California due to wildfires. 

    • Consumers influence sustainability, with products featuring ESG claims experiencing faster sales growth. 

    • Engaging Gen Z in sustainability and activism becomes a rising focus for companies. 

    • Valuing nature gains attention, with the development of the Taskforce on Nature-related Financial Disclosures. 

    • Concerns persist about working conditions in the mining supply chain for clean-economy metals. 

    • Persistent myths about EVs being as harmful as fossil-fuel cars are debunked, emphasizing their role in a systemic solution. 


Looking Forward – 2024 Trends & Predictions 

  • 2023 was a year defined by financial, social, geopolitical, and planetary uncertainty, but there are reasons to be optimistic in 2024: 

  1. Economic rebound: Global supply chains are stabilizing, inflation is cooling, and the stock market is predicted to reach record highs. 

  2. Climate progress: Global efforts are increasing, like Ecuador phasing out oil, Portugal running on renewables, and COP28 acknowledging the need to move away from fossil fuels. Greenwashing is also facing legal consequences. 

  3. Closing the gender gap: The U.S. saw its smallest pay gap between genders on record, and the UK surpassed targets for female boardroom representation. 

  4. Stronger corporate allyship: Brands like Walmart and The North Face stood behind equity-deserving groups during Pride month, showcasing true allyship. 

  5. Medical breakthroughs: Quantum leaps in Alzheimer's and cancer treatments, the fight against AIDS advancing, and obesity epidemics being tackled with new drugs give hope for a healthier future. 

  6. Co-opetition: Businesses are teaming up to tackle issues like diversity in outdoor sports through initiatives like OUTO. 

  7. Empowered women: Female health issues are gaining prominence, breaking taboos and promoting equity. 

  8. AI for good: Artificial intelligence is showing its potential to create positive change in areas like disease detection and drug discovery. 

  9. ESG maturing: Sustainability efforts will become more focused and impactful, moving away from generic greenwashing. 

  10. Businesses commit to climate action: With growing awareness of climate urgency, we can expect more measurable and meaningful environmental commitments from companies. 


  • In COP28, 200 nations agreed to move away from fossil fuels, but what this means is a move away from talking about investing in climate to actually investing in the transition. There are a few key trends and takeaways to consider as the world of transition finance grows in 2024: 

  • Transition finance is seen as crucial for achieving net zero, moving beyond green investments to support high-emitters who plan to decarbonize. 

  • Fossil fuel companies and even coal plants could qualify, sparking concerns about greenwashing and lack of rigor. 

  • Investor coalitions are working on guardrails, but there's no consistent global standard yet. 

  • Questions remain about what qualifies as transition finance and how to ensure polluters actually decarbonize. 

  • Expectations are firming up, but fragmented regulations could be a challenge. 


  • As we move into 2024, many of the trends and topics to watch out for build on the progress made in 2023: 

    • Companies are gearing up for mandatory third-party assurance requirements for ESG disclosures, particularly focusing on collecting and managing data for regulatory reporting, with positions like ESG controller becoming more prevalent. 

    • Transition finance, aimed at achieving net-zero emissions by 2050, is gaining momentum with significant investments, legislative support, and provisions like transferable clean energy tax credits facilitating clean energy project development. 

    • The implementation of directives like the EU's Corporate Sustainability Reporting Directive and recommendations from the Taskforce on Nature-related Financial Disclosures are driving better disclosure of environmental and social risks, leading to the development of a "planet economy" that aids investors in scaling investments in nature. 

    • Marina Severinovsky (Head of Sustainability, North America, Schroders) emphasizes the importance of focusing on the future of fossil fuels in 2024, stressing the need for energy companies to adapt and transition their business models to support the global clean energy transition. 

    • Andrew Behar (CEO, As You Sow) urges individuals to align their investments with their values to shape companies' trajectories toward sustainability and financial outperformance, highlighting the significance of individual power in driving sustainable finance. 

    • Jeff Mindlin (Chief Investment Officer, ASU Foundation) emphasizes the need for standardization of reporting at both company and fund levels to move beyond greenwashing and greenhushing phases and make tangible progress in sustainable finance. 


  • This article outlines five trends to keep on your radar during 2024: 

    • The switch from managerial to entrepreneurial sustainability: shifts in building out compliance to create a level playing field that is rooted in carbon accounting and reporting. Momentum will (hopefully) enable innovation and product developments that exceed compliance, providing an advantage. Challenge your company to “raise the ceiling of innovation, not just the floor of compliance.” 

    • Going beyond Net Zero toward an agenda with solutions: companies need to realize the mutual dependence on industry-level solutions. Corporate products influence climate at the societal level. Businesses are likely to take a comprehensive role in creating climate solutions, not just carbon emissions. 

    • Purpose marketing blooming into honest products: purpose anxiety, greenwashing, ‘green hushing’, pushback, and “woke” accusations have impacted the development of US and EU proposed directives that fine greenwashing activities. Integrating responsible action, diversity, and environmental impact reduction is the bare minimum of corporate engagement in 2024. 

    • Social impact that evolves into justice: deepening brand involvement beyond the superficial level of “social impact” and not being fearful to mention issues of poverty, benefits, or rights should be incorporated in a justice-focused strategy in 2024. 

    • The personal case is the new business case: relying on the business case doesn’t connect with a wide team. Adding the ‘personal case’ to moral and/or business logic amplifies the value and importance that every business function has in the transition toward a sustainable future. 


  • New frameworks and laws, including ESG reporting assurance requirements, financial incentives for the transition to clean energy, and enhanced guidelines for calculating the impact on natural capital, are influencing sustainable finance strategy. 

  • In 2023, the largest banks in the world made $3 billion by providing financing for environmentally friendly deals and projects; these banks are gaining the rewards of their green debt.  

  • Nasdaq's official rules on diverse board representation require listed companies to have at least one woman, underrepresented minority, or LGBTQ+ representative. 

  • The Corporate Sustainability Reporting Directive (CSRD) of the European Union mandates businesses disclose their impacts on ESG issues and how climate change may affect their operations going forward. This is known as the "double materiality" principle. 

  • By 2024, Deloitte predicts that IT expenditure for ESG reporting software will surpass $1 billion, an increase of more than 30% from last year. 

  • Climate-related litigation cases are predicted to rise throughout 2024 as the next generation of climate leaders enters the workforce and likely advance climate justice. 



Sustainable Brands: Innovating for Impact: The Sustainable Tech Trends to Watch in 2024 

  • Advancing Automation: Automation, including hyper-automation, contributes significantly to lowering carbon footprints in product design and manufacturing. Examples include AI-based systems detecting anomalies, reducing cycle times, and cutting carbon footprints for a leading consumer goods supplier. 

  • AI and Automation in Product Lifecycle: AI and automation play a crucial role in sustainable design by monitoring emissions, automating power consumption, and designing lighter-weight products. Integration with blockchain extends sustainability efforts into the supply chain, ensuring adherence to standards. 

  • Digital Twin Technology for Decarbonization: The metaverse, digital twin simulations, and virtual training programs contribute to sustainability efforts. In 2024, decarbonization is a growing driver for digital twin technology and virtual training programs, with industries like aerospace and defense investing to reduce carbon footprints. 

  • Challenges and Considerations: Sustainability efforts face challenges such as anti-ESG sentiment, price sensitivity, and cybersecurity risks. Despite increased costs and uncertainties, public support for technology as a climate solution is growing.  


  • Finance and ESG Integration: Sustainability will deeply embed into financial foundations, with finance professionals considering climate change scenarios' effects on business outcomes. ESG controller roles overseeing integration into operations and financial reporting will become more common. 

  • Expansion of Sustainability Reporting: Scope 3 rules will drive private firms to include sustainability reporting. Regulations from California and the EU will necessitate private companies to monitor and enhance their greenhouse gas accounting methods, impacting sectors beyond public disclosure. 

  • Persistent Politicization of ESG: ESG will remain a partisan topic in 2024, posing challenges for companies in external discussions amid elections and expected pro- and anti-ESG legislation. Stakeholder mapping and focusing on specific initiatives may be strategies to navigate polarized viewpoints. 

  • Biodiversity as a Mainstream ESG Topic: Biodiversity loss gains prominence in ESG discussions, with global goals and investment funds dedicated to biodiversity growing. The Task Force on Nature-related Financial Disclosures (TNFD) recommendations gain adoption, making biodiversity a mainstream ESG concern. 

  • Supply Chains in E and S: Laws mandating Scope 3 reporting drive companies to prioritize ethical material sourcing and fair labor standards across supply chains. Environmental and social aspects of ESG converge in supply chain considerations, with pending regulations requiring due diligence. 

  • Sophistication of Greenwashing Claims: In 2024, greenwashing claims will see increased legal definition and repercussions. Businesses are expected to embrace ESG criteria for comprehensive transformation, covering design processes, procurement, financial management, and communication practices. ESG moves from a peripheral element to a central component of overall corporate business strategies. 


  • Climate Disclosure Priority: Focus on climate disclosure tops sustainability trends for 2024, driven by new standards like the EU’s Corporate Sustainability Reporting Directive (CSRD), Corporate Sustainability Due Diligence Directive (CSDDD), and upcoming regulations from the US Securities and Exchange Commission. 

  • Quality Over Quantity in Disclosure: Shift in focus: The sustainability landscape will witness a move from quantity-driven reporting to quality-based disclosures. There will be a greater emphasis on the credibility of corporate climate transition plans and a shift in business thinking on carbon offsets towards quality. 

  • Nature-Related Disclosures: Alongside climate reporting, disclosures on business impacts on nature gain significance. The Task Force for Nature-Related Financial Disclosures (TNFD) final recommendations aim to enable companies to assess, disclose, and manage nature-related risks and impacts. 

  • Climate Adaptation Intensifies: Companies are increasingly recognizing the physical risks associated with climate change, particularly in areas like flood protection and water supply chain access. Supply chain resilience gains importance as businesses assess the impact of different warming scenarios. 

  • Overall Capacity Building: As companies face significant challenges in various areas of sustainability, the need for capacity building and skill development is being emphasized to address evolving regulations and challenges in the sustainability landscape. 

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