Are companies becoming more sustainable?
- 67% of CxOs (business leaders) felt concerned about climate change and the environment most, if not all, of the time.
- Almost two-thirds of business leaders (61%) said climate change would have a high or very high impact on their business’s strategy and operations over the next three years.
- In fact, 75% of leaders said their organizations had already increased their investments towards a sustainable future in the past year, with 20% saying they had significantly increased their investments.
- Only 3% of organizations decreased their investments in a greener future, with the leading concern being fear of economic downturn and the effects of the Russia-Ukraine conflict.
- More than half of leaders acknowledged that their organization's increased investments in sustainability were encouraged by employee activism on the matter.
- 65% of CxOs admitted that the regulatory environment was a driver in their choosing to invest in climate change matters.
- Organizations ranked climate change as the second most significant concern (42%) for their business in 2024, following closely behind the economic outlook (44%).
- 84% of CxOs agreed or strongly agreed that it was possible to achieve global economic growth while also reaching sustainability goals.
- 59% of companies started using more sustainable materials, such as recycled materials and lower-emitting products in 2023.
- 59% increased their energy efficiency in 2023.
- 7480 companies globally are working with the Science Based Targets Initiative (SBTi) towards decarbonization; reducing their carbon emissions in line with climate science in 2024.
- 55% of companies started using energy-efficient or climate-friendly machinery, technologies, and equipment in 2023.
- 50% were also providing employee training on climate change/climate action throughout 2023.
- Over 6000 companies globally had become certified B Corps as of August 2023. (To become certified as a B Corp a company must meet the highest standards of verified social and environmental performance, public transparency, and legal accountability, and aspire to use the power of markets to solve social and environmental problems).
- More than 8,000 companies and countries representing 90% of the global GDP have committed to reaching net zero by 2050.
- However, in none of the scenarios tried by McKinsey do global emissions of CO2 reach net zero by the end of the next century.
- An estimated 98% of companies on the S&P 500 index published a sustainability report in 2022, compared to just 96% in 2021. (The S&P 500 index is an index featuring the 500 leading U.S. publicly traded companies).
- 49% of organizations developed new climate-friendly products or services in 2023.
- 44% had begun requiring business partners across their supply chain/value chain to meet specific sustainability criteria.
- 43% were updating/relocating facilities to make them more resistant to climate impacts.
- 32% of companies started incorporating climate considerations into lobbying and political donations in 2023.
- 33% tied senior leaders’ compensation to environmental sustainability performance in 2023.
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Why is sustainability important in business?
Business and the environment are closely connected
- According to U.S. scientists, 2024 has a one in three chance of breaking 2023’s temperature records. And 99% chance of being among the five hottest years since records started.
- In recent decades, as the global population has grown, economies have improved, and demand/production of goods and services has increased, energy demand has soared, along with our collective carbon footprint. The increased combustion of fossil fuels to meet this demand has seen annual global greenhouse gas emissions increase by 50% over the past 30 years.
- Countries were expected to emit a total of 36.8 billion metric tons of CO2 from fossil fuels in 2023, representing a 1.1% YoY increase.
- In 2023, approximately 430 million tonnes of plastic were produced, two-thirds of which were short-lived products that soon became waste.
- However, it is estimated that current commitments made by governments and industries will only reduce the annual volume of plastic flowing into the ocean by 8% by 2040.
- By the end of 2023, the social and economic costs of plastic pollution were US$600 billion.
- A global shift to a circular economy, which refers to using resources efficiently, reducing waste, and recycling, by 2040 could create savings of more than US$4.5 trillion.
- Each year, between 19 and 23 million tonnes of plastic waste seep into aquatic ecosystems, contaminating lakes, rivers, and oceans. That’s the equivalent of about 2,000 garbage trucks per day.
- The primary cause of biodiversity loss is the inefficient production and use of natural resources.
- Marine plastic pollution affected at least 267 animal species in 2023.
- The world is losing around 10 million hectares of forest every year due to deforestation.
- Agriculture is the main driver of deforestation in all regions except Europe.
- In 2022, 45% of CEOs believed ESG programs (environmental, social, and governance) improved their businesses' financial performance—up from 37% in 2021.
Customers care about sustainability issues
- In 2023, there was an increase in eco-active (22%) and eco-considerer (40%) consumers compared to 2022, which stood at 18% and 38% respectively, within the fast-moving consumer goods sector. Eco-actives are highly concerned about the environment and plastic waste, and eco-considerers are worried about the environment and plastic waste.
- 64% of global consumers expressed concern about climate change in 2023. Additionally, 41% cited price as the primary obstacle to sustainable purchases, while 28% identified unclear labeling as their main barrier.
- American consumers are willing to pay, on average, 11% more for sustainable products. However, companies charge, on average, 28% more for such products.
- 79% of consumers in rapidly expanding markets such as China, India, and Indonesia showed concern for environmental sustainability, whereas only 55% in developed markets, like the US and Europe, shared similar sentiments.
- Gen Z (72%) and boomer (68%) consumers globally were very or extremely concerned about the environment in 2023.
- 50% of consumers said sustainability is one of their top four key purchase criteria when purchasing products or services.
- In 2023, 64% of UK-based consumers limited their consumption of single-use plastic.
- In 2023, 33% opted for low carbon emission and/or shared modes of transport (electric vehicles, public transport, etc.), a 3% increase compared to 2022.
- By 2030, the global green technology and sustainability market is expected to reach almost 62 billion U.S. dollars, increasing at a compound annual growth rate of 20.8% from 2023 to 2030.
How does sustainability benefit a business?
Finances and the bottom-line
- 71% of C-suite and functional leaders anticipated a growing significance of ESG in corporate performance.
- Almost 50,000 companies will be subject to mandatory sustainability reporting in 2024.
- According to a McKinsey study, financially successful companies that incorporated environmental, social, and corporate governance (ESG) priorities into their growth strategies were twice as likely as their peers to generate a 10% increase in revenue.
- Industries worldwide could save $437 billion per year by 2030 through improved energy efficiency.
- As of October 2023, more than 6,000 companies had set or committed to setting Science Based Targets for emissions reduction—a significant increase from fewer than 500 companies in 2018.
On our journey to Net Zero, precise, granular emissions data is really helpful to Aesop —because before we can act, we need to know what to focus on. Working with Travelperk has enabled us to understand our travel emission hotspots much better and map out the changes we can make that will have the biggest impact.
Rebecca LawsonAesop Sustainability Manager, Climate
Sustainable investing on the rise (sustainable finance)
Employees
- 69% of employed adults expressed a desire for their companies to invest in sustainability efforts such as carbon reduction, renewable energy usage, and waste reduction. This sentiment was particularly strong among respondents aged 18 to 34.
- 27% of respondents indicated they would factor a potential employer's stance on sustainability into their decision to accept a job offer.
- 64% of Gen Z and millennials believed in their ability to drive organizational change and perceived that their feedback was being acknowledged and incorporated by their organizations in 2023.
- Almost a quarter (24%) of employees considered switching jobs to a more sustainable company.
- 80% of C-suite leaders reported that their employees’ activism had positively impacted their sustainability plans.
- However, only 38% of those surveyed agreed that their employer “was doing enough to address climate change and sustainability.”
- 45% of employees had never talked with their managers or supervisors about sustainable practices at work.
- Nearly 70% of workers said they’re more likely to accept a job at an organization considered to be environmentally sustainable—even if it had a lower salary.
- 93% of those working in environmentally friendly workplaces felt happier in their jobs—compared to 55% who were happy in environmentally unfriendly offices.
- 42% of Gen Z and 39% of millennials had already changed or planned to change jobs or industries due to climate concerns in 2023.
- Half of Gen Z and 46% of millennials were "pushing" their employers to start sustainability practices.
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