I hope you had a rejuvenating vacation and that you begin 2024 with regained energy and strength. Let me wish you a wonderful New Year! Health, happiness, purpose and accomplishment in your lives! As this new year starts, it surely comes with new ideas, new projects and new resolutions! I wonder whether Sustainability is also part of yours? Well… I believe it should!
The global Sustainability agenda is quite filled for 2024. Several ESG (Environmental, Social, and Governance) trends are expected to shape more sustainable business practices and investment decisions.
I will go through them first, and I will provide you a Check-list of To Do’s you should consider for this year, right after.
2024 ESG Trends:
1. Compulsory ESG Reporting:
Companies will be required to submit ESG reports. New reporting standards such as the IFRS - IFRS Accounting Standards Navigator require more transparency and accountability from companies to disclose their environmental, social and governance practices.
This is the case around the globe and if your company operates in various geographies or if you supply customers located abroad, it would be recommended to watch for these new reporting norms.
And while public companies may be in the front line, their suppliers will indirectly be required to provide such information as well.
2. Stronger Legal Actions Against Greenwashing:
In response to the growing importance of ESG, legal measures will be strengthened to prevent misleading environmental claims and companies will need to be cautious in their communication to avoid greenwashing. This is about ethics, risk management, about your company’s and your brand reputation, about transparent supply chains and investment portfolios.
It will require that companies put a good governance in place to manage their ESG information and practices properly.
3. Supply Chain Sustainability:
Companies will focus on ensuring sustainability throughout their supply chains. This includes responsible sourcing, ethical labor practices, and reducing their environmental impact. Supply chains’ stakeholders are indeed all interdependent and connected.
Buyers will require from their suppliers to ensure sustainable business practices and to report about their objectives and progress against these goals.
Remember: It’s not about being perfect! It’s about demonstrating commitment and progress.
4. Increased Focus on Smaller Companies:
Small and medium-size organizations will indeed face more pressure to report on their ESG efforts. Sustainability reporting won’t be limited to large corporations and smaller businesses will need to step up their game. Their commitment to being more sustainable will be a source of competitive advantage, of new business opportunities and value creation.
5. Integration of ESG into Financial Decision-Making:
Sustainability will become deeply embedded in financial strategies. CFOs are already examining climate change scenarios’ effects on financial outcomes, emphasizing the financial relevance of ESG and looking into risks and opportunities. There is enough empirical evidence that sustainable businesses create more value, better returns and a stronger EPS growth over time.
So, expect the world of finance to be closely involved.
In a nutshell: 2024 will be a defining year for ESG!
With new standards and regulations coming to play, increased scrutiny and stronger demand for more transparency, Sustainability will no longer be a nice-to-have but will be embedded into companies’ strategies.
Let’s frame it this way: ESG trends are not optional. They are essential for the long-term success of any organization! So, how shall we start this new year and get prepared?
Here is your 2024 To Do’s list:
1. Seek external support, notably if you don’t have enough resources within your organization or if you look for a neutral expert advice.
2. Map the ESG state-of-affairs in your company.
Where are you in terms of environmental, social and governance matters?
Don’t be afraid to do this sanity check. There’s always something already in place. You never start from zero totally!
3. Benchmark what your competitors are doing with ESG.
Any best practice you could learn from? What do they report?
4. Engage the conversation with your customers.
Which Sustainability strategy and goals have they defined?
How can you help them achieve their objectives?
Remember…It is about business opportunities!!
5. Define your own objectives.
Where do you start? Which initiatives can you put in place?
We talk value creation!!
Reducing your carbon footprint by some energy efficiency initiatives can save you $$$.
6. Begin your good governance journey.
Who is or should be in charge of the various aspects of ESG in your teams?
How do you measure your data? Think about the reporting you will have to do, at least to your customers, and then publicly.
7. Start communicating!
About your objectives, your first actions, your initial wins. One step at a time.
This is not about perfection. It is about demonstrating your genuine commitment to sustainability and your progress!
In the end, your employees, your investors, your customers will reward you for doing this.
So, let’s get this journey started! If you wish to discuss your thoughts in more details, feel free to drop me a message: contact@magalidepras.com
I look forward to hearing from you and to supporting you along the way!
Sustainably,
Magali
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