Establishing key goals to keep global warming below 1.5 degrees and achieve net-zero carbon emissions by 2050, the conference ensured companies across the globe now face enormous pressure to help the transition to a green economy.
Today, much of global business is undergoing a sustainable shift. To find out some of the key areas ripe for change in 2023, BusinessBecause spoke with sustainability experts from Copenhagen Business School.
Here are five of the hottest sustainability trends they identified, as well as how you can prepare for them.
1. Regulation
Underpinning all of the changes that are likely to take place in 2023 are various sustainable regulation packages being implemented by governments across the globe.
The USA’s Securities and Exchange Commission (SEC) has outlined plans to finalize 29 ESG (environmental, social, governance) regulations and propose a further 23 amendments over the course of the year, aiming to increase governance of sustainable practices.
Likewise, for countries within the European Union, the implementation of new Taxonomy legislation means companies must now report the degree to which their turnover aligns with several criteria, including the impact on water and biodiversity, pollution, and support of a circular economy.
These are just some of the changes in progress.
“This is kind of a wake up call for a lot of companies,” says Andreas Rasche, CBS Full-time MBA associate dean and professor of corporate sustainability. “If you have neglected or downplayed [sustainability] until this stage, it is now really time to get moving. Because even if you don't want to, it becomes a compliance issue.”
2. Supply chain changes
Increased regulation and oversight means companies are under pressure to scrutinise their own products and processes.
Key to proving sustainability credentials, many firms must investigate their own supply chains to evaluate the entire life cycle of their products or services. From fashion to fintech, firms must be sure that any raw materials, processes, operational resources, and energy sources they use are sustainable from start to finish.
“Nowadays, to meet all disclosure requirements, companies will have to proactively manage their supply chains,” says Ivan Sokolov, senior sustainability manager at Ascendis Pharma and CBS MBA graduate.
“They will need to answer questions about their impact and their footprint, [and] they will need to reach out to their suppliers to solicit information and data.”
3. Life Cycle Assessments
Greater focus on the sustainability of products and services is driving a relatively new phenomenon: ‘Life Cycle Assessments’ (LCAs).
LCAs refer to services that provide detailed information on the life cycle of a product. They provide analytics to help evaluate the sustainability of the materials used, the manufacturing and operational processes, and distribution methods. This provides increased transparency for consumers.
Fledgeling Barcelona-based startup, Color Sensing, for example, has created technology that provides all this information and more when you scan a QR code on packaged food at the supermarket.
While this technology is relatively nascent today, Ivan feels it’s likely to boom in 2023: “It will no longer be this niche, but rather with every business, if they have a physical product, you will easily be able to calculate the LCA.”
4. Collaborations between startups and corporates
While Color Sensing aims to reduce food waste and improve supermarket sustainability, you’ll find a plethora of similar startups in other industries aiming to provide innovative green solutions.
There’s wide consensus that these startups will prove essential in achieving a green economy. Indeed, at a recent net-zero summit held by McKinsey, the firm suggested the world needs 200-300 green ‘decacorns’—private firms worth at least $10 billion—by 2030.
But transforming an innovative solution into a global company is tricky. While agile and innovative, startups often lack the reach and resources to scale up and take their solutions across borders.
To combat this, Ivan predicts a growth in collaborations between eco-startups and top multinational companies looking to enter the sustainability market.
“Entrepreneurs will indeed be a backbone of this green transition, but they need resources and backing from large corporations,” he says. “I think it’s going to be a mutually beneficial partnership.”
5. Increased pressure from consumers and investors
Regulation may be driving companies to shift towards more sustainable business models, but firms are also increasingly facing pressure from their stakeholders.
Today, consumers increasingly have an expectation that the companies they purchase from are ethical. In the US, the number of Americans who identify as vegan—meat consumption is a key issue linked to the climate crisis—increased 30 fold between 2004 and 2019.
Equally influential are investors, who increasingly demand that the companies they support employ sustainable business practices as those who do are less susceptible to reputational risks or logistical challenges caused by external changes.
“Investors press heavily, and they don’t do this for ethical reasons,” explains Andreas. “Sometimes people say: ‘What’s in it for the investors? Have they all turned ethical?’ Not at all, they do this for risk management reasons.”
How to capitalize on sustainable trends?
With business undergoing such wide-reaching changes, it’s important therefore to establish your own sustainable credentials if you plan to future-proof your career and capitalize on these sustainable trends.
Many careers today demand green knowledge or skills: the number of sustainable jobs among the workforce rose by 38% between 2015 and 2022, according to Linkedin.
To give yourself the best chance of career success, you need to understand the regulatory landscape as well as how sustainability impacts the key industry you’re interested in.
While Ivan had already held previous roles in sustainability, he enrolled in the CBS Full-time MBA to develop his understanding of these key areas: “I think it helped me stay up-to-date with the latest developments in legislation and just to stay tuned to the latest trends,” he says.
Ivan is one of many graduates from the program to land roles in sustainability, which is among the five most popular graduating sectors for CBS grads.
“A lot of our graduates move into sustainability positions because companies, due to regulatory changes, need to hire more people who do this kind of reporting and data gathering,” says Andreas.
“You need to know about sustainability because it is now bread and butter MBA knowledge.”
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