What will happen in the field of sustainability? Let’s check the outlook for 2024.

Erola Palau. Director of the UPF-BSM's Master of Science in Sustainaibility Management

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In 2023, we have witnessed growth in terms of global collaboration to enhance climate resilience, with nations and companies all over the world working together to achieve the United Nations’ Agenda 2030. Meanwhile, Environmental, Social, and Governance (ESG) criteria have steadily gained importance and companies are increasingly realizing that sustainable practices are not just an essential tool for enhancing their reputation, but also a crucial factor in maintaining their long-term profitability.

It is clear that sustainability is not just a passing fad and that it is here to stay. With this in mind, Erola Palau, the Director of the Master of Science in Sustainability Management at the UPF Barcelona School of Management, takes a look at what the coming year has in store in terms of sustainability. According to our expert, we can expect the following key developments in this field in 2024:

• European laws are getting stricter: On 1 January 2024 the European Commission’s European Sustainability Reporting Standards (ESRS) come into force, representing an important step forward in terms of expanding and standardizing the reporting of sustainability information across the EU. The standards include the requirements that companies will have to fulfill when preparing and disclosing information on the environmental, social and governance aspects of their activity and in terms of their value chain. Although the ESRS are aimed at medium and large companies, some small firms will also be affected.
• New technologies will continue to gather pace: Interest in low carbon-emission technologies will continue to grow. We will see the evolution of solutions for conserving water resources; for agroecology, through techniques that improve soil health, preserve biodiversity and capture carbon; and for sustainable fuel for aviation, coming from biomass and other non-oil based raw materials.
• Greater AI for sustainability: In 2024, the use of Artificial Intelligence (AI) and advanced data analytics will have a decisive impact on ESG evaluation. Companies will use Machine Learning algorithms to analyze massive data sets, providing real-time information on their ESG performance. Over the course of 2023, we have already witnessed the emergence of some of these technologies, and we will see them gain ground in 2024.
• Ecodesign will keep gaining prominence: As consumers and companies take action to reduce their consumption of disposable plastics, in 2024, we will see a rise in plastic-free packaging alternatives, with innovative materials and designs gaining ground in the market. Moreover, more and more products will be designed applying environmental criteria throughout all the stages of their creation, from conceptualization right through to recycling. In addition, more companies will strive to obtain sustainable design certifications such as ISO 14001, ISO 14062 and C2C (Cradle to Cradle).
• We will reduce e-waste: According to the World Health Organization, electronic waste is growing three times faster that the global population and less than 20% of this waste is collected and recycled properly. The electronic waste crisis will demand greater attention in 2024. Some of the solutions will include improving device longevity, expanding repair and reuse options, establishing partnerships with electronic waste recycling facilities, and incentivizing responsible disposal practices.
• It is time to focus on all the stakeholders: Rather than just concentrating on their shareholders, companies will have to address the concerns of all their stakeholders, including their customers, workforce, affected communities and suppliers, with whom companies will have to prioritize their interactions and show greater responsibility. The new non-financial information reporting requirements will be a crucial tool for strengthening these relationships.
• Measuring direct emissions will no longer be enough: When calculating a company’s carbon footprint and greenhouse gas emissions, we differentiate between three types of emissions. Scope 1 emissions are direct emissions controlled by the company, such as through fuel combustion. Scope 2 emissions are indirect, caused by generating the energy they consume. Scope 3 emissions include all other indirect emissions from sources not controlled by the company, such as those generated through the use of the products they have sold. If companies want to maintain their social and environmental reputation, they will have to measure and reduce their scope 3 emissions throughout their value chain
• Increasing renewable energy capacity: According to the International Energy Agency, the global capacity to produce renewable energy has tripled over the course of 2023 and will keep rising, probably due to an increase in public policy, rising fossil fuel prices and growing concern for energy security. However, in some regions, such as Europe, urban planning regulations, labor shortages and higher financing costs will slow down the implementation or wind and solar energies.

The leaders in 2024 will be companies that adapt their activity to the sustainability requirements set by the European standards and consumers, as well as companies that embrace their social and environmental impact as a fundamental part of their strategy. Although many companies are already taking steps in this direction, those that do not will be left behind.