Capgemini Research Institute reports that organisations continue to progress with sustainability efforts despite ongoing geopolitical challenges.
Its latest study, A world in balance 2024: Accelerating sustainability amidst geopolitical challenges, tracks developments in environmental and social sustainability over the past three years.
The report shows that technology and regulation play a crucial role in this progress, with two-thirds of executives stating their organisation cannot achieve sustainability goals without climate tech. Key improvements have been noted in circularity, sustainable design, water management, biodiversity and sustainability training. However, there are still challenges, particularly with Scope 3 emissions and consumer scepticism.
The report highlights increased organisational maturity in sustainability since 2022. This year, 84% of executives say their organisation is on target to meet carbon emissions goals, and only a small percentage are falling behind.
A significant number of executives have integrated recycling into their manufacturing strategies, with 74% prioritising it, up from 53% in 2022. Additionally, three-quarters of executives have implemented water-stewardship programs.
Decrease in investment
Despite these advancements, investment in sustainability has slightly decreased, with average annual spending now at 0.82% of total revenue, down from 0.92% in 2023.
“This year’s report shows sustainability projects continuing to build momentum in 2024 despite current headwinds,” Capgemini head of global sustainability services and corporate responsibility and group executive board member Cyril Garcia said.
“Business leaders have the power and the responsibility to steer us towards a more sustainable economy. Water stewardship, biodiversity preservation and circular practices are now established as key business imperatives. Executives are being very pragmatic, and CO2 reduction must now be translated into cost savings.
"We continue to see sustainability efforts bolstered by new climate tech innovations and regulations. The best way to build trust and credibility with consumers is by demonstrating tangible outcomes and planning for a future with sustainability at its heart.”
There is, however, a growing scepticism among consumers regarding corporate sustainability.
More than half of consumers believe companies are greenwashing, up from 33% in 2023. Three-quarters of consumers expect corporations to take a more significant role in reducing greenhouse gas (GHG) emissions by 2024 and demand greater transparency.
Critical regulations
Executives acknowledge that climate-related regulations are critical to driving sustainability initiatives. Three-quarters agree that such regulations are necessary to meet global climate goals, with nearly two-thirds admitting that many of their environmental initiatives would not have been launched without regulatory pressures.
The EU's Corporate Sustainability Reporting Directive (CSRD) has been key in enhancing measurement and tracking capabilities, with 73% of executives recognising its positive impact. However, only a third of organisations required to report under CSRD are prepared to report Scope 3 emissions by 2025, compared to 86% for Scope 1.
Geopolitical tensions, such as US-China relations, the European energy crisis, and conflicts in Ukraine and the Middle East, are affecting supply chains and sustainability investments.
Sixty-nine per cent of executives are concerned about the impact of US political uncertainty, with Swedish executives expressing the most concern (75%).
To access the full report: https://www.capgemini.com/insights/research-library/sustainability-trends-2024