Top 5 ESG Trends to Watch in 2024: Shaping the Future of Sustainability
The year 2024 is poised to be a pivotal moment in the world of Environmental, Social, and Governance (ESG) and corporate sustainability policy. As the importance of sustainability and ESG principles continues to grow, businesses across the globe are embracing transformative changes. Here are the top five ESG trends to watch for in 2024:
1. Rapid Uptake in Mandatory Disclosures
The demand for corporate transparency, particularly concerning environmental impact and climate-related risks, reached a tipping point in 2023. In 2024, we anticipate a surge in mandatory reporting and disclosure requirements, marking a significant shift from voluntary to mandated sustainability reporting. It’s poised to become the Year of Compliance, as companies adapt to the new wave of regulatory expectations.
2. Greenwashing In the Spotlight
Greenwashing, the deceptive practice of making misleading sustainability claims, will face intensified scrutiny in 2024. Stronger legal definitions and consequences are set to put greenwashing under the spotlight. Already in 2023, we witnessed an asset manager facing a $19 million charge for misleading ESG disclosures. The stakes are higher, and the commitment to genuine sustainability is more crucial than ever.
3. Deeper Integration with the Company Balance Sheet
With the proliferation of mandatory climate-related financial disclosures, such as the SEC’s climate disclosure rule, sustainability and ESG factors will be more deeply integrated into the company balance sheet. CFOs and financial controllers will play an increasingly critical role in managing ESG, as it becomes an asset and liability, particularly in the context of global carbon pricing and mandated carbon removal purchases.
4. Scope 3 Emissions and Supply Chain Transparency
2024 is expected to witness a significant shift towards addressing scope 3 emissions, encompassing supply chain transparency. Historically, many voluntary climate reports overlooked scope 3 emissions, despite their significant contribution to a company’s greenhouse gas footprint. Consumers are demanding improved transparency in product lifecycles, and environmental and human rights concerns have highlighted the need for companies to understand and disclose how their products are manufactured.
5. Expansion Beyond Public Enterprises
Sustainability reporting is set to extend beyond publicly listed companies in 2024. New climate disclosure laws are notable for including both public and private enterprises, such as California’s SB 253 and SB 261 bills and the EU’s CSRD. What’s more, these laws increasingly require reporting on scope 3 emissions, reflecting a broader and more comprehensive approach to sustainability.
C-its: Leading the Way in ESG
At C-its, we’re committed to promoting and supporting ESG and sustainability efforts. We firmly believe that all businesses, whether public or private, should invest in ESG strategies. Our belief is rooted in the understanding that ESG isn’t just about compliance; it’s a pathway to a sustainable, ethical, and responsible future. It’s an investment in attracting top talent, fostering growth, and ensuring long-term success.
In the evolving landscape of ESG and sustainability, we’re here to help businesses align with these transformative trends, embracing a future of responsible and impactful operations. Explore our services and join us in shaping a brighter and more sustainable tomorrow.
For more information about C-its and how we can assist your business on its journey, visit our website here. Let’s work together to make 2024 a year of profound change and progress in the world of ESG and sustainability.