That's what everyone’s talking about these days: sustainability – especially sustainability regulation and reporting. Sustainability reporting was one of the themes for 2024, with more than 1,000 different sustainability regulations published worldwide last year. An increasing weight of expectations is being placed on businesses and market-based measures, which are currently supported by regulation but are not enough on their own. Business and technology skills, among other things, are also needed, as well as an ability to take risks. It's a challenge - but there are always opportunities in challenges.
The right regulation will help the sustainability transition by creating a common set of rules and an environment without which the required investments would be challenging to implement. However, the key is still to take measures that drive development forward in the most efficient and sustainable way possible.
Particularly in the large and long-term business changes that the sustainability transition will inevitably require, it would be essential to be able to understand the requirements of the future business environment. This will allow businesses to target investments in the best possible way to support future opportunities also.
For example, sustainability reporting will increasingly require access to high-quality and reliable information about the supply chain. The same information can also be used for business development, supply chain optimisation and life-cycle services, as long as these business development aspects are included in the planning of sustainability measures. Similar opportunities exist in areas such as the optimisation of the choices of materials, the visualisation of functions and the development of resilience.
What does the future of sustainability look like?
The new year is the time of forward-looking reports, so let's take a peek at what the future of sustainability will look like in the longer term. Observations are based on the foresight work, about which a more detailed Future of Sustainability report will be published at an event in February.
Climate change remains the dominant trend, but adaptation to global warming is becoming increasingly prominent. These have a wide impact on core business functions such as supply chains, and require investment in business resilience. The geopolitical uncertainties and human rights challenges of the coming years, which could have unpredictable consequences, will add to this.
While we’ve seen some back-pedalling in sustainability targets by some operators, the overall trend in the economy remains towards a low-carbon outlook and resource wisdom. These are also areas where there is a growing need for new solutions. This is driven by both global regulation and funding, where sustainability is an increasingly important criterion. The need to protect biodiversity will become increasingly prominent, which will inevitably affect value chains. In terms of the regulatory environment, we’ll see harmonisation and, especially in the longer term, the tightening of standards.
Sustainability transformation requires the systematic use of multiple technologies, which is why understanding the synergies between technologies is particularly important. There are already great expectations of AI, but AI is also driving significant advances in the commercial exploitation of new solutions and a change in business models. The pace of development in other technology areas has also accelerated significantly and, in the future, it will be important for companies to remain active in exploiting technologies relevant to their own business. In addition, geopolitics will accelerate the development of disruptive technologies, in particular in the coming years.
Despite protectionism and political turbulence, consumer and customer behaviour will continue to emphasise sustainability. This is being driven by a number of factors, including the increasingly visible effects of climate change, increased awareness, new generations of decision-makers and expectations of social responsibility. Sustainability in business is increasingly in demand, but it must be made visible to consumers.
The "tsunami of regulation" has made sustainability an increasingly central part of organisations' activities and has created a basis for managing measures and demonstrating results. Measures will continue to be of key importance and will largely follow the trends we can see, although turbulence in (geo-)politics is of course also expected. Turbulence means that sustainability efforts will require increasingly determined leadership, with a focus on longer-term objectives. Without private and public sectors’ investment, risk-taking and commitment, new solutions and technologies will not continue to be adopted in the future.
