7 major sustainability trends for 2023
With the turbulence of the past two years, for many businesses, sustainability has had to take a back seat. Instead, companies have had to prioritise keeping their heads above water, as well as protecting staff, customers, and stakeholders. But over the past few months, those priorities have started to shift.
Now that the pandemic is largely over, what will sustainability look like in 2023? And what part will the recession play?
Here are our predictions for the biggest sustainability trends of 2023…
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Sustainability will jump back up the charts
We’ve already said it, but we’ll say it again. Sustainability will become a top priority once again in 2023.
During the pandemic, 55% of businesses were forced to pause or cancel sustainability investment. Now that most companies are back to operating at pre-pandemic levels, it’s time to put sustainability back at the top of the agenda.
According to Natwest’s Sustainability PMI, 76% of large UK businesses – and 51% of SMEs – are looking to switch to renewable energy in 2023. And the bank’s most recent report (A Springboard to Sustainability, Nov 2022), estimates there's a revenue opportunity of around £175bn for the UK economy through decarbonisation and the drive to Net Zero.
The rise of green tech
From electric vehicles to rainwater harvesting and tracking energy consumption with IoT, green tech is on the up. Apart from helping you achieve your ESG goals and improving overall efficiency, it can also help you to attract the socially conscious Generation Z.
According to Amnesty International’s 2019 Future of Humanity report, 41% of 18-25 year olds believe global warming is the world’s most important issue. Adopting green tech is a great way to put your money where your mouth is and show your prospective candidates that you’re seriously committed to becoming more sustainable.
Amazon has been leading the way with this trend for a while now. After their HQ jungle-inspired “Amazon spheres”, their $5 billion HQ2 is set to be even greener, complete with waterfalls, groves of trees, and 2.5 acres of garden landscape. But biophilic design doesn’t just apply to global, multi-billion dollar companies.
In essence, biophilic design is all about incorporating as many plants, and as much natural light as possible, inside a building. It's good for the environment, but it also has clear business benefits.
Increasing the amount of natural light and green vegetation in a workspace increases productivity and wellbeing – and it can help you attract top talent. That’s why we’re certain more businesses will be incorporating biophilic design into their workspaces in 2023.
Consumers will be more conscious than ever
Did you know that 62% of consumers say it’s now more important for companies to be sustainable and eco-friendly than it was before the pandemic? Or that since Covid, 54% are more committed to reducing their own carbon footprint?
Conscious consumption isn’t a new trend; it’s been clear for years that customers care about Corporate Sustainable Governance (CSG), but the pandemic has significantly accelerated this shift. That’s why it’s more crucial than ever for brands to become as sustainable as possible. If you don’t, it’s simple: you’ll lose market share to greener competitors.
Carbon neutral and carbon negative emails
One email emits an average of only 4g of CO2 into the atmosphere, so what's the problem? The problem is that around 300 billion emails are sent each year. To illustrate the impact: sending 65 emails is the equivalent of driving a mile in a fuel-powered car.
But new technology is enabling companies to calculate email emissions and offset their footprint so that their campaigns are carbon neutral. Each email is then sent with a carbon neutral seal, so that your customers know your marketing efforts are not impacting the planet.
Some web and email platforms are going one step further and helping their customers send carbon negative emails by over planting or investing in initiatives like Carbon Capture and Storage (CCS).
Tying ESG to bonuses
Executive bonuses have traditionally been determined by hard financial metrics, like profit margins and shareholder equity. But this is changing.
In the last few years more and more companies have started including ESG metrics like carbon footprint reduction and diversity and inclusion as part of their bonus incentive – and it’s much more than playing the optics game.
Tying ESG goals to bonuses is a powerful way for companies to drive change and achieve their social and environmental objectives. A good example of this is McDonald’s Corp.
By 2025, McDonald’s wants 35% of its leadership roles to be filled by women and underrepresented (Black, Hispanic, Asian) minorities. So last year they announced that 15% of executive bonuses would be tied to meeting diversity targets and the disclosure of workforce demographics.
This means that CEO, Chris Kempczinski, will lose 15% of his approximately $2.25 million annual bonus if he fails to meet these objectives.
With investors and customers calling for greater transparency and accountability (both in terms of bonuses and ESG), more businesses are beginning to see the value in tying the two together.
A report by Glass Lewis & Co revealed that in 2021 a quarter of US companies included environmental or social metrics in their executive incentive plans – a 16% rise since 2019.
Corporate sustainability legislation will increase
Currently there is no legislation in the US or UK that forces businesses to disclose their emissions or their targets for reducing them. But it looks like 2023 might be the year that this changes.
On both sides of the Atlantic, more policies are being put in place to ensure businesses are prioritising sustainability.
In the US, the Securities & Exchange Commission (SEC) is proposing transformative new rules that would require full transparency from corporations on their climate risks, Net Zero targets, and Scope 1,2 and 3 emissions. If this policy succeeds in being pushed through, businesses will have between one to three years to achieve compliance.
In the UK, the 1st of January 2023 will see the new Extended Producer Responsibility (EPR) laws come into place. Designed to expedite the transition towards a circular economy and Net Zero, EPR will oblige businesses to drive packaging design changes as well as considering end of life treatment. For businesses placing packaging on the market, data collection, reporting, and payment rules will all change.
Hang on – what about the recession?
Far from being a barrier, a recession is actually the perfect time to strengthen and enhance your sustainability strategies.
With rising energy prices and ongoing supply chain disruption, better operational efficiency has never been more important. Reducing energy consumption and reliance on other scarce resources can help companies mitigate against future price hikes – and increase opportunities for funding and investment.
Ultimately, brands who weave sustainability into the core of their business, will be more protected during an economic downturn.
Firstly, ‘green customers’ are more loyal and less likely to be deterred by price rises. Secondly, sustainability and circularity often translates into instant cost-saving. And, finally, sustainability (done correctly) means innovation – a key business differentiator in times of recession.
Studies show that companies committed to innovation during times of economic crisis are more competitive and recover faster. By committing to reach your sustainability goals, you’re effectively committing to innovation – and that will help you improve everything from cost and waste to PR and customer loyalty.
For businesses in 2023, sustainability has the power to drive everything from innovation to financial stability and talent acquisition. The key to finding the right solutions is defining where you are right now and what you want to achieve.
One thing that won't be changing in 2023 is our global schedule of virtual and in-person Sustainability Masterclasses. You can see our full list of Sustainability events here.