Organisations proceed to make progress of their sustainability initiatives, regardless of dealing with geopolitical challenges. Regulation and expertise are proving to be a significant a part of this progress, with two thirds of executives agreeing that their organisation won’t ever have the ability to obtain its sustainability objectives with out local weather tech. That is in response to findings from the Capgemini Analysis Institute, the suppose tank related to the French consultancy agency.
The group’s newest report, “A world in stability 2024:Accelerating sustainability amidst geopolitical challenges” tracks developments in organisations’ environmental and social sustainability during the last three years. This newest version reviews on what the authors say are marked enhancements in circularity, sustainable design, measurement, water stewardship, biodiversity, and sustainability skilling, regardless of shortfalls in tackling Scope 3 emissions and client skepticism.
Collectively, organisations are ramping up their efforts to satisfy their sustainability targets, say the authors, and a better stage of sophistication is clear in the best way sustainable practices are adopted, since 2022. 84% of executives this 12 months say their organisation is on course to satisfy its carbon emissions objectives; lower than a tenth say they’re behind.
The group mentioned progress is especially seen when it comes to circularity, sustainable product design, measurement, and water administration. For example, almost three quarters of executives say that recycling merchandise is a core facet of their manufacturing technique, up from 53% in 2022, whereas over two thirds mentioned they had been redesigning merchandise to take away fossil gas feedstock sources, up from lower than half in 2022. As well as, three-quarters of executives have carried out a water-stewardship program, up from 55% in 2022.
In late 2023, executives had been planning to extend investments in sustainability this 12 months. Nonetheless, firms haven’t adopted via: common annual funding in sustainability initiatives and practices now stands at 0.82% of whole income, down from 0.92% in 2023.
“This 12 months’s report exhibits sustainability initiatives persevering with to construct momentum in 2024 regardless of present headwinds,” mentioned Cyril Garcia, Capgemini’s Head of International Sustainability Providers and Company Duty and Group Government Board Member. “Enterprise leaders have the ability and the duty to steer us in the direction of a extra sustainable economic system. Water stewardship, biodiversity preservation, and round practices at the moment are established as key enterprise imperatives. Executives are being very pragmatic, and CO2 discount should now be translated into value financial savings. We proceed to see sustainability efforts bolstered by new local weather tech improvements and rules. The easiest way to construct belief and credibility with shoppers is by demonstrating tangible outcomes and planning for a future with sustainability at its coronary heart.”
Customers unconvinced about progress
Based on the reviews’ authors, shoppers need to see firms going even additional and so they demand transparency. The report seems to search out three-quarters of shoppers anticipating firms to play a bigger function in decreasing GHG emissions in 2024. “Moreover, at the same time as organisations ramp up sustainability initiatives, shoppers are extra skeptical than ever about company sustainability, as greater than half imagine that organisations are greenwashing their sustainability initiatives, up from 33% in 2023.”
Geopolitics and rules impacting company sustainability initiatives
Executives pointed to climate-related rules as a key driver of sustainability initiatives. A full three-quarters of executives imagine that sustainability regulation is critical to realize international local weather objectives, and almost two thirds even agree that with out regulation, their organisation wouldn’t have launched many environmental sustainability initiatives.
Globally, 73% of executives agree that the EU’s Company Sustainability Reporting Directive (CSRD) is honing sustainability measurement and monitoring capabilities. Nonetheless, organisations proceed to fall brief when it comes to reporting on sustainability initiatives, particularly on Scope 3 emissions. Amongst organisations required to report for CSRD in 2025, simply over a 3rd say that they’re ready to report Scope 3 downstream emissions subsequent 12 months, whereas 86% are ready for Scope 1.
In the meantime, tensions resembling US-China relations, the wars in Ukraine and the Center East, and the European power disaster, are resulting in disruption to produce chains and enterprise operations, and uncertainty round authorities funding. This 12 months, almost two thirds of executives pointed to geopolitics as an rising consideration in sustainability investments, and 69% are involved concerning the influence of the unsure US political scene. That is felt throughout international locations, however Swedish executives are most involved (75%), in contrast with 71% of US executives and 59% of executives in India.
To entry the complete report: https://www.capgemini.com/insights/research-library/sustainability-trends-2024
Methodology
The Capgemini Analysis Institute surveyed 2,152 executives employed at 727 organisations, every with greater than $1 billion in annual income, throughout 13 international locations in North America, Europe, and Asia-Pacific and in 12 industries and sectors, in June and July 2024. Executives surveyed had been director stage and above and 50% had been from company capabilities, resembling technique, sustainability, gross sales, and advertising and marketing; 50% had been from worth chain capabilities, resembling product design, R&D, procurement, and logistics. The Institute additionally surveyed 6,500 shoppers over the age of 18 throughout the 13 international locations and carried out interviews with 12 senior sustainability executives at main organisations globally.
