23 Sustainability lessons from 2023

The list below can be read as a critique – it celebrates the progress and calls out the excuses. What it does not do, is parrot the mainstream jargons. What it does do, is provoke you to think beyond the superficial and ask more questions from within your areas of impact & influence. So, here is to all you policy-makers, corporates, academics, start-ups and non-profit organisations alike, who want to build a future embedded with sustainability.

1) There is a post-Covid renewed focus on sustainability, after at least a two year pause where many companies were trying to survive at an existential level. Many sustainability activations and community outreach have re-started now.  

2) The COP-28 statements went from a fossil fuel commitment of stoppage from “phasing out” to a draft mention of “phasing down”, to an eventual call to “transition away” from fossil fuels. Phasing down “unabated” coal is another commitment that got lost in the semantics. None of these safe assurances have brought about any transformations in global emissions reduction – don’t fall for the elation in the headlines. Google search page 1 is enough to help you navigate through the superficial claims.

3) Carbon neutrality claims start receiving the necessary brickbats, especially in European Union, where there have been regulatory calls to fine companies making claims on going green without tangible proof. Carbon off-setting exposes by The Guardian and multiple other investigations shows the immense work still to be done in monitoring and preventing double-counting of off-sets in general.

4) Circularity, especially in packaging material takes centre-stage. The biggest of the beverage makers can no longer get away by his recycling an equivalent amount of plastic somewhere else, for what they put into the eco-system as their own packaging. In many places, the law might allow it, but investigative media, aware consumers and activist investors no longer consider this as enough.

5) Logistics de-carbonisation is no longer brushed under the carpet. The aviation and shipping industry is now being called out for the need to invest more on de-carbonisation technologies and processes in their supply-chain. The next big sustainable fuel transformation will indeed come in the domain of international transportation.

6) Domestically, Electric Vehicles (EV’s) arrive at the heart of the land transportation shift to renewable energy. While subsidies drive this transition for the producers and consumers alike, what is still missing is a systems-view to this transition, with an equal emphasis on de-carbonising the grid as well as the back-end resource extraction of minerals required to make EV’s in the first place.

7) Consumers are still not ready to pay the high premium for sustainability in general, that brand managers think they are entitled to charge for a sustainable brand. The reasons for this range from brands not presenting an authentic and certified view on their sustainability claims, to brand managers themselves over-estimating the premium-ness on sustainability that can be equally derived by a commodified product compared to a very consumer-facing brand (there is a huge gulf here in premium perception here).

8) Plant-based diets and veganism grows from an idea to multiple products and lifestyle choices now coming to life. This is as much as a response to the higher carbon emissions from industrial-meat production, to the higher need felt for a healthier (read less cholesterol, triglyceride inducing) lifestyle. The positive sign, basis a Capterra report, is that now consumers are willing to pay more for “sustainable food” as a category.

9) Scope 3 emissions and supply-chain sustainability now becomes mainstream conversation. With many MNC’s now having clear plans and disclosures flowing on their Scope 1 & 2 emissions, the focus has now shifted to asking more from organisation on the scope 3 (which is around 80%-90% of its emission). The shift is from a mere Net Zero to a wider climate-resilient and climate-positive eco-system of partners from suppliers to the distributors.

10) Organizational structures are still not completely ready to embrace sustainability as a “way of operating”. Sustainability has to start become core KPI’s for a supply-chain manager working on resource or production efficiency, or a finance manager seeking to ramp up ESG investing. More the tentacles of Sustainability spread across verticals within a corporation, the more it will be well & truly “embedded”.

11) And the starting point for embedding sustainability, will be from the formative years of our education. Education institutions have now started looking at sustainability beyond a passing fad, and more as a pedagogical element to be embedded across their curriculum. In India, top B-Schools are now offering MBAs on Sustainability, and many more new-age institutions in the development and policy space, also start embracing sustainability as one of their core themes. Much more needs to be done here though.

12) The talk on Artificial Intelligence (AI) driving sustainability decisions, has ramped up. Few recent studies (including the one by Nature Communications) shows that 71% of SDG’s would be positively affected by AI, while 23% would be negatively affected by it. The future will be a lot more of leveraging the AI learnings on SDG’s.

13) Supply chain disruptions and wars resulted in energy shortages, but did not cause an accelerated shift to renewable energy. European countries have found alternate sellers for gas and fuel, while Russia too has found a wider global eco-system willing to buy its oil. This system-shock needs more activated change-makers, to take renewable advantage of this energy crisis.

14) In conferences as well as online discussions, Sustainability professionals express their frustration at turning into report-churning machines. Just within ten years from 2011, number of companies on S&P 500 disclosing a sustainability report went from 20% to 96%. This requires companies to re-look at their Sustainability and ESG team structures from scratch.

15) Consulting firms and their lack of skilled manpower is not ready for the Sustainability transition. Firms will need to think about beyond just reporting aspects of ESG, and look at how they can become value-contributors to a company’s supply-chain sustainability journey. Also, the time is ripe for newer more authentic ESG/Sustainability consulting firms to dive into this gap.

16) Bio-diversity conservation, especially deforestation becomes a widely recognised element of concern. The United Nations has been leading on this front, with the World Environment Day themes for 2020 being “celebrate bio-diversity”, 2021 being “eco-system restoration”, 2022 being “only one earth” and 2023 being “beat plastic pollution”. The integration of conservation, bio-diversity and sustainability is activated on an over-drive now.

17) The International Sustainability Standards Board (ISSB) is taking the lead in creating a central sustainability reporting standard. With TCFD and SASB to be subsumed within ISSB, and double materiality of “financial” and “impact” elements being called for in corporate reporting standards, the wind is blowing in the direction of uniformity on reporting. The critics are still out on how the standards itself require even more focus now on tangible actions and their evaluations across industries.

18) The recognition for Carbon Capture, Utilisation and Storage (CCUS) is playing a parallel role to initiatives on GHG emission reduction. For certain industries like cement, where there aren’t technological solutions already, the carbon sequestration approach will play a key role in kick-start such transitions at least.

19) Fast Fashion still continues its unabated usage of polyester (a type of plastic made from petroleum) as the primary source of material. 50 billion of clothing items are “thrown away” every year, and the likes of a Patagonia in the industry continue to be few and far in between. If there is one consumer-facing industry needing urgent sustainable transformation, it is the fashion industry.

20) Sustainability, or for that matter, CSR, is not a PR stunt. Any corporate manager still not able to lift themselves up above this view of Sustainability, will soon see themselves become a neolithic presence in system-transformation discussions within their organisations. And that is why corporates launching one or two sustainable products at a small-level with good PR, while their entire supply-chain and products continue in the labyrinth of status quo, will very soon be found out.

21) Agriculture has faced intense crisis with the ongoing rainfall fluctuations, salinity ingress issues, degrading ground-water levels as well as the grain-crisis as a result of the Ukraine-Russia war. Near-shoring and localising has picked up steam, and many corporations are launching new products from such ideas or embarking on a path to reform their recipes and production processes to accommodate for these changing global-realities of the climate and our economies.

22) The “rights” of natural resources become hot-topics for judiciaries and law-makers across the world. The right of rivers being a prominent one, with many indigenous communities across the world pushing for a recognition of the same. But, an important question will need to be answered first, before we jump straight into this, who will be the holder and bearer of these rights?

23) To close out, with a look at how “ESG” progressed. ESG has bore the brunt of attacks from the climate deniers and free market absolutists alike. The conservative spectrum in USA utilised the over-emphasis on diversity and inclusion in schools and companies, to question ESG in totality. The free-market absolutists took this opportunity to phase down and transition away from a lot of their original commitments on Sustainability. To all those who were feeling satisfied at a building momentum on ESG, must not give up to these transitionary forces, nor be sucked into the element of ESG being a risk materiality escape only.

Here is to many more transformations in 2024 !