Sustainability has always been important to corporations because it demonstrates a concern for the environment in which they operate and makes it part of their business strategy.
In 2024, experts say that sustainability will be at the heart of corporate strategy as they demonstrate their readiness for the challenges of the future.
This means that from a regulatory perspective as well, things will shift with businesses who want to be change drivers seeking legal transformations to address sustainability issues. For this, businesses will be expected to collaborate rather than compete. Sustainability is not a case of outdoing the other, but working together to offer practical and real solutions to problems such as pollution, wastage and energy consumption.
The International Institute for Management Development (IMD) says that the COP28 United Nations Climate Change Conference in Dubai and other political issues around the world have demonstrated the need for businesses to help in influencing non-market environments and managing geopolitical risks.
Furthermore, IMD also says that company CEOs will be expected to speak up about sustainability issues including social and political changes that need to be made. While this can be a sensitive area to deal with because not all stakeholders will take a particular stance on the issues in question, it is important to practice cautious activism rather than remain mum on pertinent issues.
Sustainability through mental health
Corporate sustainability also includes ensuring that the workforce is fit and ready to work. To this end, ensuring that employees are not overly stressed, enjoy a healthy work-life balance, and that their work is appreciated and rewarded is crucial.
Good mental health among employees has a domino effect in that it creates a work environment that is both rewarding and fulfilling. This, in turn, drives business growth.
IMD says that 87% of companies are expected to initiate at least one human sustainability initiative in the year ahead to establish better mental health in the workplace. This process involves facilitating counselling in the workplace, conducting seminars on mental health, fostering a more open work environment to discuss mental health issues, and managers and the top rung of businesses implementing mechanisms such as mental health days, dealing with employee anxiety, sharing the workload and setting the stage for productivity via better health.
Nurturing nature
Turning our attention to nature is more important than ever before because we are battling the real effects of climate change. Companies will be looking more at making nature-centric decisions across the production process and involving technology such as AI, environmental DNA, and imaging technology among others to help in this.
Mintel, a global Market Intelligence and Research Agency says that just reducing one’s carbon emissions will do the trick no more. Companies will need to show what they plan to do to reduce food waste, the use of water and electricity, and packaging waste. Therefore, companies will also be expected to divert some of their profits into such sustainability initiatives.
In 2024, more businesses are also expected to follow ESG (Environmental, Social and Corporate Governance) practices that consumers are made aware of. In fact, from 1st January this year, European companies coming under the Non-Financial Reporting Directive (NFRD) have been required to report on their climate impact. It is expected that from next year, various other large companies who engage in business in the EU will need to proceed under the new regulations. So this year, ESG data collection and reporting will become a serious part of financial reporting.
Furthermore, Circular Economy Marketing is already gaining momentum as part of these measures to ascertain that there is less wastage at every step of a product’s life cycle. As such, brands are turning their focus to marketing products that can be upcycled or recycled.
Placing the consumer at the centre of it all
Today’s consumers are intelligent and well-informed. Therefore, businesses should not expect to be able to blindly sell to them and see success. Educating consumers on sustainability issues and how one’s brand is following sustainability strategies is important. Vinit Nair, a marketing expert has recommended the 80/20 strategy in this endeavour, showing that 80% of a brand’s marketing content should be educational, while 20% should be promotional.
This will also build more consumer trust in one’s brand, and companies can work on this by conducting workshops and webinars or by using digital media tools to disseminate sustainability messages. Using tools like TikTok and YouTube to post video content that tells sustainability stories will be key.
Making changes for the better
2024 has allowed businesses to turn over a new leaf and work on renewing areas of the business model that have been neglected. This year, companies have already determined to approach sustainability from multiple perspectives, not just branding and reducing carbon emissions.
A collaborative approach across all business areas is being adopted to ensure greater growth of sustainability. The big bucks will only continue to come in if companies recognize the need for sustainability that involves people, production, and processes.
(Anouk De Silva)