“It is always wise to look ahead, but difficult to look further than you can see.”

Winston Churchill

Why do business sustainability trends matter? Sustainability in business is gaining momentum both in profile and in practice. Increasingly sustainability is becoming part of core business strategy, where it will have the maximum impact and business advantage. However many businesses risk being left behind. If they merely react rather than act strategically their ability to generate profits and face challenges with resilience will be diminished.

Whether you are defining or refining your corporate sustainability approach what should you be looking for in 2017?

What are the key issues and opportunities for 2017?

What’s going to keep you ahead of the pack?

As ever, predicting the future is an inexact science but it’s clear that new themes are emerging, and existing issues are building momentum.

Our focus here is upon sustainability for organisations: how they understand and respond strategically to social and environmental issues as a fundamental component of future business success.

What are the big sustainability issues for 2017?

Of course the following big sustainability trends below haven’t just popped into existence. However, we believe that 2017 will see growing momentum from companies to engage in and understand how they can build value from strategic responses to the challenges they face.

Climate change

Following on from the Paris Accord there’s an increased focus on real performance, mitigation, resilience and moving beyond risk to look at market opportunities.

Energy

Improving availability and access while responding to the low carbon agenda.

Food production

Meeting basic needs, improving quality and building resilience in the face of climate disruption and changing demands.

Water scarcity

Understanding is increasing of the linkage between food, energy and water and managing a world where there’s increasingly too little clean water in some areas and too much (flood/storms) in others.

Biodiversity

Other organisms underpin our survival and well being, yet humanity is driving global extinctions.

Changing demographics

Population growth, ageing populations in developed countries and the growth in middle classes all have labour, social, migration and development implications.

Geopolitical instability

The current order may be changing. China and India are on the rise, and with fallout from the 2008 crash still unresolved the electorate in the UK, Europe and the US have been looking for change.

The global development agenda

The 17 UN Sustainable Development Goals (SDGs) aim to end poverty, protect the planet and ensure prosperity for all. They set targets for governments, companies and civil society to achieve over the next 15 years.

Inequality and global equity

It’s becoming an annual counterpoint to the World Economic Forum annual meetings for Oxfam to highlight the headlines of the growing inequality of the current mode of capitalism. Inequity remains on the increase. Today only 8 people own the same as the world’s 3 billion poorest.

Find out more on key sustainability issues >>

Read our concise review article on business and global sustainability context >>

What are the key trends in business sustainability 2017?

Businesses need to respond to the issues above, but exactly how to respond and what they will need to do will vary from company to company.

Based upon our assessment, industry research and feedback from clients, we believe that the following trends will feature strongly in 2017.

Global context – the issues you can’t afford to ignore

Companies can little afford to ignore the global context in which they operate. They must be able to demonstrate how their products and services not only make them money but also make a difference to the world’s big challenges.

We outlined some of the key issues above, their relative importance (in terms of risk, security of supply, market opportunities etc.) will vary depending upon the nature of your business, its dependencies, culture, markets and the nature of your value chain. Navigating these successfully will require research and contextual agility.

Purpose

How globalisation and capitalism contribute to society is still under the spotlight. As a result of their position at the ‘coalface’, companies are increasingly looking to define and communicate their  purpose and and how they better serve society’s needs. Defining and implementing purpose isn’t simply a PR or marketing exercise, it can help drive performance, win market share and improve staff retention and productivity.

For some simple and searching questions to help you assess and develop your organisation’s purpose, see our article Utility – the fundamental metric of social impact.

Transparency

Driven by political change and examples of breaches of trust by governments, companies and civil institutions, increased demands for transparency arise from citizens, consumers and customers. Social technology means it’s never been easier to discover the truth – even amongst all the noise.

It’s good to be transparent about sustainability issues and challenges, but to do so effectively means you need to know what’s going on throughout your value chain and to discover (and manage) any existing or potential issues before anyone else does. To see an example of the work we have done with clients on sustainable supply chains, see the strategy we developed for Europe’s largest snack firm, Intersnack.

Multiple capitals

The multiple capitals concept provides a way to consider additional sources of value, not just financial. Different approaches are taken to defining multiple capitals but most feature; natural, social, manufactured, human and financial capitals.

As the concept has gained wider acceptance and a number of tools have emerged to help companies consider their dependence and impact upon different capitals. Some key ones include:

• Multiple capitals at the heart of reporting sustainability, such as the International Integrated Reporting Council’s (IIRC) Capitals Framework. and the Sustainability Standards Accounting Board (SASB) Conceptual Framework.
• The Natural Capital Coalition’s Natural Capital Protocol provides guidelines to support better decision making by considering business dependencies.
• The WBCSD’s emerging Social Capital Protocol is developing a harmonised approach to measuring social value creation and impacts.

Find out more on key sustainability trends >>

For more insight and analysis on multiple capitals, read our very affordable and accessible e-Book Sustainability Context: Why the elephant is the room, available from the Amazon Kindle Store.

Sustainability Reporting

While sustainability reporting is of course nothing new, there is increased focus on meeting demands for transparency (see above) and upon materiality (issues of strategy, performance and impact which are core to future business success).

Here are some key recent or forthcoming changes in reporting:

• The Global Reporting Initiative (GRI) has standardised – the GRI has moved from its Guidelines to a set of Standards, the first global standards for sustainability reporting.
• Integrated Reporting is gathering speed and the use of the IIRC Integrated Reporting Framework seems to be increasing.
• The World Business Council for Sustainable Development (WBCSD) has launched The Reporting Exchange. This provides comprehensive information on requirements, guidelines and regulations related to providing non-financial information.

Get the low down and guidance on key sustainability issues

For more comprehensive insight and information on the sustainability Reporting trends, get our free sustainability guidance and resources >>

Sustainability for investors and markets

Sustainability has long been on the agenda of specialist investors. However momentum is now growing for wider market engagement by ‘mainstream’ investors in understanding how sustainability will shape the success of their investment strategies. This move has partly been accelerated by the success of divestment campaigns, so far mainly aimed at withdrawing investment from high carbon activities or from other stocks such as tobacco. However, in line with other developments in sustainability we would expect similar initiatives to spread to other areas of activity that are considered undesirable for a sustainable future.

From a company’s perspective, improved sustainability performance can enhance access to capital, reduce the cost of capital and help attract stable long-term investors. A recent report by Nielsen found “that brands with a demonstrated commitment to sustainability saw more than 4% sales growth, while those without grew less than 1%.”

On a wider agenda, initiatives such as UNEP’s Inquiry into the Design of a Sustainable Financial System are asking big questions about the nature and purpose of finance. The underlying theme behind all this activity is the idea that sustainable investment is simply good investment, and that the world is too small and too interdependent to ignore how the money that we spend today shapes the future that we will share tomorrow.

Find out more on key sustainability issues >>

See our overview of how sustainability delivers financial outperformance >>

Interested in how our systems of value could deliver good for us financially, environmentally and socially over the long term? Read our incisive and visionary short e-Book Capitalism: What’s the point? – at the Amazon Kindle Store.

Priorities for business

Of course, such issues are large and complex (to simplify greatly). They involve global citizens, governments, civil society, institutions and NGOs and drive public and policy agendas. They also involve business – but how can your company get its head around the challenges these issues raise?

Impacts and priorities will be different in different companies and business sectors, depending upon the resources they depend upon, how they compete, their customer base and market positioning.

However, in general, these big sustainability issues will affect your company as follows:

• How your business activities depend upon and impact the issues, and the implications that changing availability, prices and risk may have for your business model – the dependencies that you have and your vulnerability to change in these dependencies
• The nature of evolving policy, regulation, investor focus and emerging sustainability standards
• Public attitudes and behaviour
• Changing customer requirements
• The changing competitive environment

These factors can either be viewed as threats to business as usual or as opportunities to innovate your business model, products and services.

Whatever the appetite for innovation and leadership in your company, these evolving issues will continue to drive the integration of sustainability considerations and priorities into the way your business undertakes the following:

• Strategic analysis and strategy development
• Risk analysis, assessment and planning
• New product development and business innovation
• Performance management
• Non-financial communication and reporting

There’s no single magic bullet to simplify what this means for any one business. However, there are practical and straightforward tools and processes which we use with our clients to identify the issues that matter for them, develop ambition, vision and strategy and plan real-world responses to maximise opportunities and build business value.

By confronting the issues that matter for you in your company and planning business-relevant action it’s possible to develop leadership, win market share and build businesses fit for the future.

“I never am really satisfied that I understand anything; because, understand it well as I may, my comprehension can only be an infinitesimal fraction of all I want to understand.”

Ada Lovelace

What will be the sustainability trends in 2018?

What will be the sustainability trends in 2018? The last few years have been, not to understate it, somewhat unpredictable. While in this context it might seem rather difficult to make predictions for 2018, we believe a number of key sustainability trends will continue to influence organisational practice.

Some of these sustainability trends are of course not new. Many of them build upon those we highlighted last year (which can be viewed in the ‘sustainability issues of 2017’ tab), representing a continuation of issues and themes that have been building in recent years. However, there is often a lag between the recognition of an issue and that issue being translated into corporate management priorities which might give rise to changes in behaviour.

Below, we provide a brief overview of new and building trends that we think will grow in relevance for business sustainability in the coming year, as well as highlighting some questions to consider when focusing upon the sustainability of your organisation:

• Carbon reduction
• Plastics and ocean pollution
• Global mega trends
• UN Sustainable Development Goals (SDGs)
• Sustainability Reporting
• Taxation

Carbon reduction is stepping up

Despite the US Government exiting the Paris Agreement it looks like many US states and companies are moving forward with plans for action both on carbon emissions reduction but also accelerating renewable energy production.

Alongside this, investors are getting in on the act, increasingly moving away from fossil fuel funding. For instance, at the One Planet Summit on 12^th December 2017, the World Bank committed itself (among other things) to cease funding new oil and gas exploration from 2019. It was joined in this declaration by announcements from both the insurance company AXA and the bank ING, that they would be divesting from fossil fuel projects, with a particular focus upon reducing their exposure to coal.

Beyond company undertakings, some countries are also making commitments to reduce fossil fuel dependency. The UK Government made the headlines in 2017 with its decision to ban the sale of diesel and petrol cars from 2040. Some commentators have suggested that this simply allows the UK to appear progressive while essentially delaying a problematic transition for future governments. It could also be said that their commitment provides a clear picture of the need for more sustainable transport over coming decades. In contrast to the UK Government’s rather mixed approach to new fossil fuel discovery (the 2017 UK Autumn Budget also gave tax breaks to new North Sea oil exploration), on 19^th December 2017 the French Government passed legislation to ban all exploration of oil and natural gas in its territories by 2040. However, while 2040 still feels a long way off, France has also pledged that existing drilling permits will not be renewed when they expire, and no new exploration licenses will be granted, with immediate effect.

Questions to consider

• The world is moving to renewables – what is your dependency on non-renewable energy and what are your plans to go fossil free?
• Do you use diesel and what are your plans to ensure a transition to cleaner fuels or the latest technologies? Read more on the air quality issues with diesel.
• Solar and wind generation is becoming cheaper and more reliable, especially when combined with energy storage solutions, how is your company exploring the opportunities to generate your own energy or to contribute towards local or distributed generation capacity?
• How exposed is your business model to climate change risks? If you depend upon global supply chains, and especially if you have biological supply chains (food, drink, natural yarns etc.), the countries you source from will be increasingly impacted by water availability, social and demographic shifts and political instability arising from accelerating climate change.

Plastics & ocean pollution

The issue of plastic pollution is gathering pace. BBC’s Blue Planet 2 provided a shocking insight into the sheer scale and extent of how plastics have entered ecosystems even in the most remote parts of the world. Plastics are entering food chains, with birds and animals mistaking plastic for food and it being found in the guts of animals even at 36,000 feet down, at the bottom of the Mariana Trench. Governments are starting to respond: in the UK, a ban was introduced on plastic microbeads in cosmetic products, with an extension to other products. For an overview of the actions that have been taken so far by governments across the world, Beat the Microbead presents a timeline.

Companies have also been engaging in activities to tackle the issue, from Adidas’ plan to make more than 1 million shoes from ocean plastic, to Interface’s work with fishing communities in the Philippines to provide them with additional income in collecting ocean plastic waste for use as a recycled feedstock for their ‘Net Effect‘ floor tiling products. Other corporate focus for ocean plastics is upon the development of circular industrial and economic processes. Plastics are extremely useful, high-performing and lightweight components in many technologies, products and infrastructure. With something so vital to modern life as we know it, wouldn’t it make more sense to retain such material within our systems of production, so that they can be recycled and remanufactured, rather than giving rise to pollution on such a vast scale? The Ellen MacArthur Foundation’s New Plastics Economy Programme provides vital information on why and how we might develop new industrial models for the use and re-use of plastic.

Questions to consider

• How do you use plastic and do you know what happens to it once it leaves your control?
• Are there opportunities to innovate your approaches to make use of recovered plastic, how might this help reduce your impact and create new product differentiation? (for an insight into sustainability and competitive strategy, see sustainability; how does your business compete?).
• Beyond just reducing your use of plastics, what can you do to play a role in wider, societal, waste plastics recovery?

More global mega-trends

Companies will be increasingly required to understand how global mega-trends such as climate change, demographic shifts, increasing inequality, water issues and biodiversity loss have relevance to their business models and strategic plans.

Such investigation should become a standard aspect of their strategic analysis and planning, representing key elements of their strategic context. Beyond a simple acknowledgement that the world is changing fast, companies will need to disclose the implications of such changes for their business and demonstrate how their strategies seek to minimise their contributions to the acceleration of negative trends and maximise their positive impacts through core business.

Questions to consider

• Do you understand how global mega trends provide new sources of risk and opportunity for your business? For some tips see our guidance on exploring and managing sustainability in a fast changing and complex world or, if you prefer, a short video exploring strategic business resilience.
• Have you conducted strategic analysis to quantify these risks and opportunities?
• How are you communicating the impacts of megatrends? For an example of leading practice, see DSM’s approach.

The UN Sustainable Development Goals (SDGs)

As with most of these trends, 2018 will see a continuation and growth of activities from 2016 and 2017. For the UN Sustainable Development Goals, companies will increasingly need to understand and prove how their activities and strategies are located against the SDGs. In practice this will involve highlighting which of the SDGs have particular relevance to the business and how the company intends to contribute towards the achievement of the Goals while ensuring their activities do not undermine them.

Questions to consider

• Do you acknowledge the UN SDGs in your strategic approach to sustainability?
• Which specific SDGs have particular relevance to your business…which of them do you directly impact, either positively or negatively, and what can you do differently to play an active role in delivering the future we want?

Sustainability Reporting

Sustainability reporting is maturing. With the Global Reporting Initiative’s (GRI) move from guidance to standards in 2016, companies using the standards will have to ensure that their approach to reporting makes the grade.

Reporting is also, slowly, making progress in getting on investors’ agendas. Carbon and water remain areas of primary focus. However, there’s an ongoing evolution of approach, moving from a requirement for companies to disclose their environmental and social impacts, investors are increasingly asking companies to tell them how these trends and impacts manifest as risk and exposure.

One such development which will start to shape disclosure on previously “non-financial” issues in the coming years was publication in 2017 of the recommendations for effective disclosure of climate-related financial risks by the industry-led Task Force on Climate-related Financial Disclosures (TCFD).

The Task Force members were drawn from business, finance, investment and insurance, and the recommendations were characterised by the Mark Carney (Governor of the Bank of England and Chair of the Financial Stability Board) as “developed by the market for the market”.

The TCFD developed four recommendations on climate-related financial disclosures that are applicable to organisations across sectors and jurisdictions. The recommendations are structured around four thematic areas:

• Governance: The organisation’s governance around climate-related risks and opportunities.
• Strategy: The actual and potential impacts of climate-related risks and opportunities on the organisation’s businesses, strategy, and financial planning.
• Risk Management: The processes used by the organisation to identify, assess and manage climate-related risks.
• Metrics and Targets: The metrics and targets used to assess and manage relevant climate-related risks and opportunities.

Another trend in reporting we will see in 2018 is a move towards the further development of disclosure on social and natural capital impacts through more meaningful indicators of performance. At present companies tend to focus upon lagging indicators (this is how much we emitted last year) but will need to start adding some leading indicators (here is our relationship to the state and health of the natural capital we depend upon and to the resilience of the communities and societies we rely upon and sell to). Look out for our thinking on moving from lagging to leading indicators of sustainability in early 2018.

Questions to consider

• Are you focusing your reporting upon material business impacts?
• What best practice approaches do you use to guide your reporting…GRI Standards, IIRC or SASB?
• How are you dealing with multiple capitals reporting, and do you understand your dependence upon healthy natural and social capital? For example, see context based sustainability and multiple capitals management.
• How are you engaging your investors in your sustainability activities, can you demonstrate to them how sustainability minimises your risk and maximises your value creation?
• How are you acknowledging and integrating the TCFD recommendations on climate change risk disclosure and communicating with investors how you understand, mitigate and manage your climate risks?

Taxation

Responsible tax has become ever more prominent recently, with news stories on corporate tax management grabbing headlines around the world. Judging how much tax a business should pay is of course immensely difficult, and the activities of the vast majority of companies is legal. However, in the public mind, there is a difference between legal and acceptable, and the more complex approaches adopted by some companies (e.g. placing company Intellectual Property in ‘conveniently’ low tax territories) is increasingly seen as artificial and ethically problematic. The challenge though, is that it is tax revenue that allows countries to build social capital (roads, healthcare, education – useful stuff like that) which in turn supports the work forces, consumer base and intellectual capital that companies rely upon. Aggressive tax planning is more likely to be seen as evidence of an extractive approach – taking the benefits without paying the costs of doing business. Companies which can demonstrate how they provide genuine social utility should be the ones that can genuinely demonstrate that they are socially sustainable.

Questions to consider

• How do you tell your tax story, can you justify that your arrangements are appropriate and justified?
• Can you demonstrate your social utility, how do you balance the value you get from stable and functional societies with the tax you may to support their health and future viability? For further thoughts to help you explore your social purpose and impact, see our thinking on why a focus on social utility is essential.

How can we help?

The world is a complex and changing place. While it always has been, there are good reasons to believe that the economic and business norms of the past will increasingly struggle under the strain of changing times.

Over the past 20 plus years, we have pioneered approaches to sustainable strategy, reporting, skills development, sustainable innovation and vision development. We can help accelerate your current plans, assess your progress or develop strategies to build business value and mitigate risk.

“Never prophesy, especially about the future.”

Samuel Goldwyn

What will be the sustainable business trends in 2019? 2018 saw many companies caught out on the issue of plastics, few people expected it to blow up so fast, or to catch the public’s attention so deeply, or to cause so much disruption.

“If it’s not in my annual management plan then I’m not interested”. That (to paraphrase) is what I was told recently by a senior manager in a leading company. The response begs the question of just which issues make it into strategy and plans and just how can you react to fast-moving issues?

Prediction is always a perilous endeavour, but as in previous years we’re looking at what businesses will (or really should be) focusing on in 2019.

To do so we’ve looked at the fast-moving issues which gained momentum in 2018 and at emerging issues that could grow in 2019. We’ve also picked issues that apply or arise in different ways, whether at a company level or in the wider environment or society.

The biggest trends are about a growing awareness of context, i.e. moving beyond doing a good job with respect to peers or sector norms, to assessing and setting performance in the context of the wider world on a quantitative and scientific basis. Related to this is the fact that there are large degrees of interrelatedness and inter-dependency in all sustainability issues. No issue arises, or can be dealt with effectively, in isolation.

There is perhaps, finally, a growing consensus that taking steps to address the challenges that the planet faces are indivisible from saving ourselves. The environment is not separate from us and our wellbeing, and neither is the economy. Global shared intentions such as the UN’s Sustainable Development Goals has helped highlight this, as has Kate Raworth’s Doughnut Economics which graphically (in both senses) made the link between social values and a safe global environment for humanity.

Science-based targets – boiling a frog (1)

We’ve long worked with clients to explore how wide/far and fast they should be moving on different sustainability issues. This often includes looking at current best practice – but what if best practice isn’t enough? What if we’re in the classic boiling a frog situation where the ‘environment’ is changing relatively slowly but abruptly meets a perilous position? Science-based targets seek to address this question by using what we know in terms of planetary science to inform the goals we set and the pace at which we need to achieve them. In some areas the science isn’t clear enough to fully support this approach. However, its nearly always still clear what needs to be done or avoided. There is likely to be an increased focus therefore on ‘sustainability context‘ as leading companies strive to set goals and demonstrate positive impacts that are objectively meaningful and not simply based upon relative performance compared to peers.

Biodiversity loss – boiling a frog (2)

Frogs are being threatened by more than just metaphors. Amphibians – along with other vertebrates (and invertebrates) are already in metaphorical hot water. WWF and ZSL’s Living Planet Report showed that the Earth has lost c. 60% of vertebrates since 1970. It’s important to understand this isn’t loss of species per se (although species are becoming extinct at an alarming rate too) it’s loss in the number of animals. Put simply there are estimated to be 60% fewer animals alive than there were 50 years ago. That’s a shocking headline, but will it lead to more action on biodiversity? It’s not clear; biodiversity is complex and difficult to engage with, but public and corporate awareness is rising and the need is pressing.

While there’s increased focus on climate change, biodiversity issues are increasingly coming to the fore. As we write, the latest climate conference (COP 24) was closing in Poland (see below). Making fewer headlines was COP (Conference of the Parties) 14. The governing bodies of the Convention on Biological Diversity met at Sharm El-Sheikh, Egypt, where over 190 countries joined to step up efforts to halt global biodiversity loss and protect ecosystems.

The CBD (Convention on Biological Diversity), like the UN Framework on Climate Change, emerged from the Rio Earth Summit in 1992 and in a similar way has an Intergovernmental Science Policy platform (the IPBES). The CBD aims to conserve biological diversity, safeguard sustainable use of biological resources and ensure that genetic resources are fairly shared. In Spring 2019, the IBPES will publish its first assessment of global ecosystems, their state, decline, progress on targets and policy options.

The COP 24 agreed to take measures to meet the Aichi targets as set out in the Strategic Plan for Biodiversity 2011-2020. The conference also agreed on a wide-ranging participatory process for developing a post 2020 global biodiversity framework. It is expected this will agreed in 2020 at COP 15 in Beijing.

EU Sustainable Finance / TCFD ++

Mainstream finance still has a great distance to travel to truly recognise and integrate sustainability issues as sources of material risk which therefore require adequate disclosure. But there is some encouraging action on this front.

 In June 2017, The Task Force of Climate-related Financial Disclosures (TCFD), released its recommendations for voluntary climate-related financial disclosures that are consistent, comparable, reliable, clear and efficient, and provide decision-useful information to lenders, insurers, and investors.

The recommendations focus upon the physical, liability and transition risks associated with climate change and what constitutes effective financial disclosure across industries.

In March of 2018, the European Union, in its Action Plan: Financing Sustainable Growth, committed to revise its guidelines on the disclosure of non-financial information in line with the “(TCFD) and the climate-related metrics…Subsequently, the guidelines will be amended to include other environmental and social factors.” (from Action 9: Strengthening sustainability disclosure and accounting rule-making).

As of September 2018, 513 organisations have expressed support for the TCFD recommendations.

Multiple Capitals

The concept of context and multiple capitals continues to grow as a core aspect of sustainability management, as we have noted in previous years. 

An approach to addressing what are considered in economics as ‘externalities’ *, multiple capitals refer to a number of conditions, states and sources of value that are either unpriced or under-priced.

 Two major initiatives which are developing conceptual and management tools for organisations to recognise and integrate their impacts on multiple capitals are the Natural Capital Coalition and the Social and Human Capital Coalition, producing guidance and tools.

We believe that the coming year should see organisations undertaking strategic assessments of their dependencies, impacts and vulnerabilities in relation to natural and social capitals changes by identifying a series of leading indicators which are likely to meaningfully assess their contribution to the continuing health of those capitals. This would, in turn, provide investors, regulators and society at large with an indication of the potential continued success of that company (and meaningfully describe their relationships with the natural and social systems which they depend upon).

* economic costs and benefits that lie outside or across the boundaries of conventional financial accounting.

Get essential insights and guidance on Materiality, the Business Case for Sustainability, Developing Sustainable Business Culture and Sustainable Business Culture – and more – with our free sustainable business guides.

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Climate – disruptive change

As we know climate change has been rumbling on for years with insufficient action to meet the scale of the challenge.

Delegates to the Global Climate Action Summit in San Francisco September 2018 called upon governments to increase climate action ahead of 2020 after which greenhouse gases need to fall quickly and continue to decrease in order to avoid the worst effects. The Summit was convened by Jerry Brown, California’s state governor and was aimed at governors and other public leaders and business executives rather than national leaders.

There were calls for action in different areas, but including:

• Global Climate Action – a call for global cooperative effort to combat climate disruption and create a safer and more prosperous future for all.
• A call for governments to develop Nationally Determined Contributions (NDCs) by 2020. These empower bottom-up climate action and plot a path to a zero-carbon future consistent with the science and goals agreed in the Paris Agreement.
• A shared investor agenda – formally launched with 400 investors representing US$32 trillion of assets*, the investors are focused on using financial flows to further climate action. Climate Action 100+ includes nearly 300 investors working with some of the highest emitting companies to align then with the Paris Agreement.

The Summit also published the Exponential Climate Action Roadmap which outlines the global economic transformation required by 2030 to meet the Paris Agreement target on climate, sector by sector including agriculture and sustainable energy.

The next Climate Summit in 2019 will focus on the sectors with the greatest emissions.

* While the investors represent/manage funds with these asset values, normally only much smaller figures are invested in low carbon initiatives.

COP 24 Poland

In December, the UN process continued with countries meeting in Katowice Poland for COP 24 to agree the ‘Rule Book’ for how the Paris Agreement will be implemented in 2020.

The conference was mired in disagreement, mainly over how to deal with the UN IPCC’s findings on the risks of overshooting a 1.5 degree rise in global temperatures. The Paris Accord agreed a 2-degree target by 2020 but representatives of many vulnerable countries wanted to amend this to 1.5 degrees. This was resisted by oil-producing countries including the US, Russia, Kuwait and Saudi Arabia. Compromises were made but without full agreement and acceptance of the 1.5 degree target.

Meanwhile, the US has withdrawn from prominence, looking to step away from the Paris Agreement in 2020, China and the EU supported plans for common reporting and accounting systems for emission reductions and the US achieved one of its objectives of ensuring it is subject to similar regulations as China.

“You cannot cut a deal with science, you cannot negotiate with the laws of physics”

Mohamed Nasheed, former president of the Maldives.

So, what was the outcome? The headline is that 196 countries agreed a deal, in the form of a rulebook on the Paris 2015 Agreement – but this masks the significant disquiet felt by many nations.

Any agreement is better than none, however the current pledges on emissions will most likely limit warming to the 3 degrees level, requiring far deeper and faster cuts in the near future if the world is going to meet levels that scientists think are anywhere near safe.

Ironically, the conference venue was decorated with displays of coal. Poland is heavily dependent upon coal for energy generation, the most carbon intensive source of energy.

But perhaps one of the most notable features of the conference was the role of young people. More attended the conference and they made their presence felt. Greta Thunberg, a 15-year-old Swedish student hit social media memes with her daily press conferences and organisation of school strikes. Greta told global leaders: “You are not mature enough to tell it like is, even that burden you leave to us children. But I don’t care about being popular. I care about climate justice and the living planet.”

Plastics

There have been several interesting facets to the plastics phenomenon. Plastics have long been on the radar for sustainability professionals, environmentalists and some NGOs. Plastic micro-beads were the subject of long-running campaigns, and finally action, through voluntary and regulatory action.

This was before Blue Planet II caught the public’s imagination with a tide (pun intended) of awareness, anger and calls for action. Perhaps it was the combination of characteristics, cute animals suffering, the growing awareness that we’re also poisoning own food chain and increased understanding of wider climate and environmental issues. It’s unclear, but it has generated enough momentum for politicians to consider taking action. Like many decisions taken in a hurry, picking alternatives in haste can mean that one ill is substituted for another – albeit with different characteristics. While paper bags for example, don’t have the plastic waste end of life issues, they can drive deforestation, have a higher carbon footprint (they’re heavier to transport by road) and are only likely to be used once by consumers. They are unlikely to be more sustainable*, just have other issues in the trade-off for ‘good’ solution.

One of the most interesting aspects of plastic is the widespread awareness means that businesses of all sizes are encountering requests to reduce plastic use, not just corporates.

* More sustainable – in common parlance this of course really means ‘less unsustainable’ – like other terms such as ‘planet friendly’ etc.

Building Collaboration- evolving the role and responsibility of business

Sustainable outcomes require companies to work outside their boundaries as issues and challenges often lie across the boundaries of any one organisation, country or sector.

Companies are increasingly recognising that they will need to develop new models of partnership and engagement if they are to respond adequately to emerging environmental and social challenges.

This can include:

• Work to adjust the ‘enabling conditions’, values, drivers and rules that can either arrest or accelerate sustainable business.
• Partnerships with organisations in different parts of value chains to achieve wholesale change in the dynamics of these chains – examples would include commodity focused initiative on tea, chocolate, coffee etc (such as those convened by IDH, the Dutch Sustainable Trade Initiative)

Many of these aspects relate to the previous theme of social utility and the notion of common-self-interest. Companies truly engaged in sustainability will need to undertake activities within their own direct spheres of control and influence, but also engage in wider activities designed to evolve norms, values and the rules of business.

Between organisations – corporate activism

The 2018 Trust Barometer Survey from Edelman highlights that consumers are increasing their expectations of companies to undertake activism in social and environmental dimensions.

They found that:

• Trust in companies headquartered in the U.S. has dropped five points from 55 to 50% just in the last year, after having already fallen from 61% in 2014.
• Sixty-four percent of respondents agree that CEOs should take the lead on (social) change rather than waiting for government to impose it.
• 79% of U.S. employees trust their employers to do what is right.

Various collective initiatives have been developed in recent years to address social/environmental issues which are beyond the ability of any single organisation to resolve. This is likely to grow further in 2019, especially as our understanding of the scale of likely climate disruption grows.
Disruption is highly likely in agricultural supply chains, particularly in developing markets. While philanthropic partnerships have long featured in business’s CSR approaches, the understanding of value gained through deeper partnerships continues to grow. This is driven by both value and values. Companies want to engage at a more meaningful level, over longer periods than the superficial aspects of donating money and/or unskilled (as in not using staff competencies in activities) staff time. Longer, deeper engagements are more difficult to nurture but generate greater value for both parties.

For information and guidance on how your company can develop as an activity for sustainable change see Act now for sustainability! Should companies be activists?

Implementation challenges

The evolution of sustainability management in companies has continued, although after a period of growth there’s been some consolidation for many, while the leaders forge ahead.

There appears to be some stalling in implementation as strategies run out of steam or fail to embed. This is normally down to issues to do with leadership and governance. It might appear dull – but it’s serious.

There’s a huge implementation gap – between what planetary science suggests needs to be done, commitments made and real action that can be verified.

What are the challenges? They tend to boil down to the following:

• Not having a plan or strategy
• Having a poor plan that falls short on scope
• A plan that’s isolated on unsupported
• Lack of leadership understanding or support
• Seeing CSR/sustainability as a cost not a value centre

Sustainable capacity within organisations

While the idea of building sustainability skills and understanding at scale within organisations is not a new idea, our work has seen this become an increasing priority that will grow further over 2019.

As sustainability becomes increasingly understood as a strategic priority of value to investors, customers and consumers and the subject of strengthened disclosure and reporting rules, there is also a requirement for sustainability within organisations to the focus of the many, not the few.
Even within some leading companies you can find examples where sustainability is not truly owned by leadership and the organisation as a whole but is still the ‘problem’ of dedicated sustainability managers and teams.
Building wider ownership of sustainability and embedding it within corporate culture is an increasing focus of sustainability management. This is manifesting within companies as leadership which understands that better outcomes are more likely to be realised through spreading understanding and responsibility for sustainability across the organisation, not simply building expertise in single departments.

For an analysis of the challenges and opportunities to build sustainable corporate culture, see Sustainable business culture – how do you nurture it?

Conclusions

Sustainable business trends in 2019 will be moving fast, here is our quick summary:

• More strategic approaches are required – to demonstrate how organisations have analysed what they depend upon and are vulnerable to.
• New issues are emerging which organisations need to recognise, assess, manage and communicate.
• Existing issues are growing in importance to key stakeholders.
• Organisations will need to raise their game in demonstrating how they understand and communicate sustainability in terms of risk, value and opportunity to essential stakeholders.
• Everyone is becoming more interested in meaningful targets and demonstrable impact/progress.
• A focus on building real sustainable cultures is increasingly required.
• Empty promises and lack of consistency won’t cut it any more – real commitment means real change.

What will be the big sustainability issues in 2020?

Each year we look to identify the emerging and fast-moving sustainability issues we believe will shape sustainable business practice. In 2020 these are not wholly new, but existing issues continue to gather momentum, move from the edge to the mainstream or become the focus of policy and business attention.

Here are the high-level issues which should be on your sustainable business agenda in 2020. Each one either links (or will link in coming weeks) to a stand-alone article, providing more detail and insight.

Nature – a super year for nature?

Nature issues are slowly climbing our collective consciousness. As WWF (and others…) put it ‘the world is where we live’. We’re waking up to the fact that we can’t continue to use our land, water, air and oceans in ways that damage, disturb, pollute and degrade them. This doesn’t just harm other species (globally, wildlife populations have declined by 60% on average in 40 years) but it also harms us – sooner or later.

Read more about a big year for nature >>

Climate – real climate action?

Climate will remain perhaps the most vital sustainability issue of 2020. The UN’s Climate Change framework reaches the make or break stage in 2020, but the crucial question is, will attention finally convert into meaningful and proportionate action? Read more on climate >>

Evolving business purpose

In 2019 we saw an acceleration in the recognition and acknowledgement that a simple focus upon profit and shareholder returns is simply not enough for business in the 21^st Century. We believe that 2020 will see this agenda continue to grow, with a focus on the need for organisations to clearly demonstrate how they provide social and ecological utility.

A focus on business purpose will help build failing trust and align direction with global goals. Read more on business purpose >>

Reporting and Disclosure

2020 will see further progress in sustainability reporting, especially key elements such as risk, resilience, climate, water and the UN Sustainable Development Goals (SDGs) moving from the periphery of corporate disclosure to be a required element of corporate communications to regulators, investors and wider stakeholders.

Plastics

The more we learn about the global plastic pollution problem the more significant it seems. From the science which tells us just how much and how far plastic pollution has spread, to the recognition of the significant contribution that the plastic production and use contributes to climate change. Set against this are the continuing development of responses, from societal and policy approaches to address single use plastics, to the development of circular economy solutions and the continuing development of bio-based and lower impact alternatives. Plastics will be a major sustainability focus in 2020.

As of the end of 2020, it was published that human-made materials now outweigh Earth’s entire biomass. This is according to an article published by nature.com, which discusses the effects of humanity on the planet.

Air quality

The World Health Organisation estimates that 80% of people around the world living in urban areas where air quality is monitored are exposed to air which exceeds WHO guideline limits. That around 7 million people die each year due to air pollution and that 9 out of 10 people breathe polluted air.

As more of the world population moves to live in cities and urban areas, a focus on the air that we breathe, the fundamental component of life is essential.

Flooding

Flooding is a local issue, so it is difficult to make generalised statements about, but flood risk is likely to grow in 2020.

The links between flooding and climate change are complex and varied but go hand in hand. As sea levels rise and weather event severity increases, so does the occurrence, risk and severity of flooding.

To focus on the UK, in 2019 the Environment Agency warned that if global temperature continues to rise in line with current trends, that spending on domestic flood protection would need to almost double from its current level, to £1bn per year. In addition, the financial implications of flooding without investment in adequate protection, defences and mitigation were starkly highlighted by the Flood Re scheme which identified that flooding would cost the country £1.8bn annually rather than £700m with proper mitigation investment.

Business is at risk from flooding in a number of ways, from direct risk to business premises and industrial infrastructure, distribution and supply chain disruption, delivery delay to increased costs for insurance. Many businesses are sited on flat land, and often flat land is found on flood plains!

The cost of not investing in our capacity to deal with floods is far more than ignoring it. As with climate change the cost benefit analysis is clear.

What were the biggest issues in sustainability in 2021?

It’s safe to say that 2020 had its share of challenges and setbacks, maybe most notably the COVID-19 pandemic, which still saw itself into the new year of 2021 as countries scrambled for the best way to deal with it. But if we’re to start anywhere with regards to sustainability in 2021, perhaps it’s best to begin here.The Effects of COVID-19 on the Environment

The Effects of COVID-19 on the Environment

As the world entered 2021, it did so under the enduring shadow of COVID-19. The UK’s third national lockdown began in January, marking a continued effort to control the virus and protect public health. But beyond the immediate health and economic concerns, the pandemic served to amplify (and in some cases clarify) many of the sustainability issues already shaping the global agenda.

While temporary reductions in travel and industrial activity during lockdowns led to short-term improvements in air and water quality, these were not signs of long-term progress. Instead, they revealed how deeply modern economies are still entwined with resource-intensive models of production and consumption. The environmental signals of 2020 and early 2021 were not indicators of systemic change, but they did offer a glimpse into what might be possible.

Research from the UK’s Natural Environment Research Council (NERC) underscored that the pandemic must be viewed as both a crisis and a catalyst. Scientific evidence highlighted the interconnectedness of human health, environmental integrity and climate resilience, demonstrating how global shocks can ripple through social, ecological and economic systems.

Importantly, NERC-funded research provided insight into how the UK’s environmental science capability can support better outcomes. From real-time air quality data to tracking how wildlife and ecosystems responded to quieter, less disrupted human activity, the science showed both the fragility and adaptability of natural systems. Less nitrogen dioxide levels and small particle pollution was reported as being significantly lower in spring; these have adverse effects on conditions such as asthma, so a generally positive outcome was felt in this regard. These insights present a crucial opportunity: to shape post-pandemic recovery in ways that are grounded in environmental intelligence and guided by long-term sustainability.

The key question posed in 2021 was not just how to bounce back, but how to build forward, towards systems that are more robust, equitable and aligned with planetary boundaries.

Plastic Waste and Environmental Justice

In early 2021, concerns were raised over the UK’s continued export of plastic waste to non-OECD countries, despite the EU’s move to restrict the practice. The departure from the European Union created a regulatory gap (or, loophole), allowing the UK to send plastic waste to low-income nations such as Malaysia, Vietnam and Pakistan. These shipments often place disproportionate environmental and health burdens on communities least equipped to manage them.

This situation not only highlighted the persistence of global inequalities in waste management, but also the need for a more accountable approach to materials use that addresses waste at its source rather than displacing it elsewhere for someone else to deal with.

Public concern grew rapidly. One notable response came from 9-year-old Lizzie from Devon, whose petition to stop the export of plastic waste gathered over 80,000 signatures. Her campaign served as a powerful reminder that awareness and action can start anywhere, and that sustainable systems require both policy reform and a sense of shared responsibility.

The issue underscored a broader truth: without structural change in how we design, use and recover materials, plastic waste will continue to expose the environmental and ethical limits of the current linear economy.

COP26 Glasgow

In 2021, the UK positioned itself as a global leader on climate ambition, setting a new legally binding target to cut greenhouse gas emissions by 78% by 2035 compared to 1990 levels. This marked the most ambitious target among developed economies and was a highly important signal ahead of the UN Climate Change Conference (COP26), hosted in Glasgow in November.

The target reflected a growing international consensus on the urgency of sustained decarbonisation. But setting goals is only one part of the equation; delivery remains the critical challenge.

In the months leading up to COP26, the Climate Change Committee (CCC), the UK government’s independent advisory body, issued a stark assessment: the UK was not on track to meet its own targets. While the commitment was welcome, the CCC identified a gap between ambition and action, outlining over 200 policy recommendations across energy, transport, buildings, agriculture and land use.

COP26 itself was widely seen as a pivotal moment for global climate diplomacy. While some progress was made – particularly on coal reduction, methane commitments and deforestation pledges – the outcomes fell short of what scientists and vulnerable nations had called for. The summit reaffirmed the importance of limiting global temperature rise to 1.5°C, but left unresolved many of the mechanisms needed to achieve it.

From a systems perspective, COP26 highlighted a recurring theme in sustainability: that high-level commitments must be matched by credible, financed, and coordinated delivery. Without coherent cross-sectoral action—and without addressing underlying systems of energy, finance, and consumption—targets risk becoming symbolic rather than transformative.

The work ahead lies not in crafting new promises, but in implementing existing ones quickly, effectively and equitably.

Cambo Oil Field

A brief stop-off here for a couple of quick wins. Campaigning took place to protest the Cambo oil field off the coast of Scotland in the North Sea. Thought to contain around the equivalent of 800 million barrels of oil, it was estimated that the climate pollution produced by drilling would be equal to 18 coal-fired power plants each year. Shell, who had a 30% stake in the oil field (prompting criticism from environmental groups), pulled funding at the end of the year, putting the project on hold indefinitely.

Cumbria’s Coal Mine

In early 2021, Cumbria County Council gave initial support to a proposal for the UK’s first deep coal mine in over 30 years. Framed as a regional economic stimulus, the project was expected to generate local employment and supply coking coal to the UK and European steel industries.

However, the announcement triggered widespread concern. Environmental groups, climate scientists, and local residents raised objections not simply on the basis of emissions, but on the inconsistency such a move would represent in light of the UK’s broader climate commitments. With COP26 on the horizon and the government publicly committed to net-zero by 2050, the optics and implications of approving new fossil fuel infrastructure were hard to ignore.

In February, faced with mounting pressure, the council announced a review of its decision.

While proponents argue that the mine would support industrial resilience and reduce reliance on imported coal, critics point out a fundamental disconnect: advancing a net-zero future while greenlighting fossil fuel expansion doesn’t add up. It also risks undermining the UK’s position in international climate diplomacy and sends mixed signals to investors and industry.

In a landmark ruling in 2024, the High Court quashed the decision to approve the Whitehaven coal mine. The judgement found that the previous government’s assumption that the mine would not lead to increased greenhouse gas emissions was “legally flawed.”

At its core, the Cumbria case exemplifies a recurring sustainability challenge—balancing short-term economic benefits against long-term systemic risk. If climate action is to be credible, it must be consistent not just in targets, but in the decisions that underpin them.