2023 to see a sustainability boom
Cutting across sectors, industries are doing their bit to practically contribute towards the global sustainability initiative
Sustainability has progressively assumed great importance for companies to remain relevant and competitive in the current global scenario. The recently concluded COP27 Conference made it very clear that the effects of climate change are set to become increasingly pronounced across the world. We have now entered an era of ESG (Environmental, Social, and Governance), as investors with climate and social agendas keep pushing firms and regulators successfully to make the necessary changes.
An immediate need
The future of prosperity is set to be driven by one major agenda: sustainability, inclusion and growth. Many businesses are now implementing a hostof green initiatives – both locally as well as globally.It looks like 2023 is going to be a year in whichwe shall see sustainability efforts across all sectors. According to a late 2022 McKinsey report, “Ninety-three percent of CEOs say that sustainability issues are important for the future success of their business, and 54 percent expect sustainability to be embedded within the core business strategies of most companies in the next decade.”
Renewable energy or low-carbon project facilities involve several different considerations, such as building an energy-storage capacity for backup supply power, if and when needed. The same McKinsey report writes: “A more reliable approach is a portfolio-synergistic strategy in which planning is top-down, with the goal being to develop and deliver each project so that the overall results of the capital spending portfolio are optimised”.
The Science Based Targets initiative (SBTi) is a collaboration between the CDP, the United Nations Global Compact, World Resources Institute and the World Wide Fund for Nature. SBTi drives ambitious climate action in the private sector by enabling organizations to set science-based emissions reduction targets. Since 2015, more than 1,000 companies have joined the initiative to set a science-based climate target.
Clear benefits
Adapting sustainability in corporate strategies is not only essential to meet evolving investor pressure, consumer demand and regulatory requirements, but also a key factor in attracting quality talent, reducing overheads, and improving the bottom-line. Furthermore, as governments, populations and companies face greater pressure to adapt to the changing environmental concerns, the economic benefits of embracing climate change are now clear.
Research from the Global Commission on Adaptation found that investing $1.8 trillion globally between 2020 and 2030 could reap net economic benefits of up to $7.1 trillion. Assuming 15% growth, half the pace of the past five years, ESG assets under management could climb to more than a third of the projected $140.5 trillion global total by 2025.
A 2022 study from consulting giant AT Kearney opines, “businesses that do adapt will better protect themselves against the risks that climate-related disruptions pose to their operations while simultaneously benefiting society and demonstrating the ESG leadership that consumers value.”
It’s a joint effort
Cutting across sectors, industries are doing their bit to practically contribute towards the global sustainability initiative. Sample the following:
- The construction industry had always been a prime polluting villain. However, recent efforts in using renewable material, smart heating, ventilation and air conditioning (HVAC) systems, wastewater recycling, rainwater harvesting, green buildings, urban forests, and resource conservation are reaping noticeable results.
- Almost every car-maker worth its salt is coming out with electronic vehicles – and prices are dropping fast. Indeed, the automobile industry is playing all out to make EVs popular. Many private organisations and commercial fleet owners have already started switching to EVs. But the governments and regulatory bodies have a big role to play in lowering costs and providing ample charging facilities to make EVs a real success.
- The IT industry is a dedicated player in the sustainability race. It was one of the first sectors to successfully go paperless. Now it is focussing to minimise the environmental effects of digital activities. Deploying softwareupdates and upgrades to ensure that devices consume minimum power, increasing memory consumption to increase device lifespan and hence reduce waste, incorporating sustainability factors in the design phase – are some such initiatives.
- Minimising e-waste from batteries, devices and accessories in one area which will require humongous effort. While companies are trying to optimise e-waste, the only option is to develop products that would be future proof to a big extent. Among accessories, “hearables” are currently a huge culprit. This comprises all personal earpieces –headphones, ear buds, earphones, neckbands, and the like. Increasing hardware longevity and enabling software upgrades could keep these devices in use for a much longer period.
- Chargers are another villain. And this is currently a much-discussed issue. As per EU statistics, an average consumer owns around three mobile chargers but regularly uses any two of them. In June 2022, the European Union (EU) had unanimously agreed to formalise a legislation on a uniform charging port for electronic devices. It will now be mandatory for all mobile phones and handheld electronic devices in the EU to carry a USB-C charging port.The EU hopes a universal charger will reduce carbon dioxide emissions and prevent waste.
- Huge economic implications are also being calculated, as eliminating the costs of buying multiple chargers for different devices could allow EU consumers a total annual savings of around 250 million euros.
- In addition, the EU Commission for Internal Market estimated that unused or disposed chargers contribute to roughly 11,000 tons of electronic waste each year. The end goal is to reduce environmental waste, ensure consumer convenience and avoid “lock-in” effects caused by proprietary charging solutions.
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