Trends that Will Shape Sustainability in 2024

Amidst two concurrent conflicts and escalating geopolitical tensions on a global scale, businesses have displayed resilience, incorporating innovations and enhancements to fortify their supply chains throughout the year.

 

The advent of Generative Artificial Intelligence (AI) took centre stage, with ChatGPT emerging as the world's preeminent AI platform, garnering 100 million users within a mere two months of its launch. While businesses eagerly adopt this technology to enhance productivity and streamline costs, a growing consensus underscores the necessity to safeguard and bolster the workforce. The imperative is to ensure that automation serves to augment the workplace rather than pose a threat to employment. These endeavours are poised to persist.

 

In emerging economies such as India, Thailand, and Indonesia, the rapid ascent of electric vehicle (EV) adoption is notable. Fueled by the popularity of affordable models, these regions are witnessing a surge in demand for EVs.

 

Stringent regulations have compelled corporations not only to monitor their direct emissions but also those emanating from their suppliers and end-users.

 

In 2024, eco-business delineates 5 pivotal trends anticipated to mould business and society.

1. The Predominance of Generative AI in Rapidly Evolving Technology

From crafting a science fiction novel within a few hours to engaging with clients in diverse languages, ChatGPT hailed for its swift creation of a science fiction novel and multilingual client interactions, sparks debate for potentially displacing 300 million jobs. In the U.S., artists protest AI-generated images with #artbyhumans. A Mintel Trends survey in the Asia Pacific reveals job concerns despite limited AI knowledge (57%). Notably, 69% oppose unethical corporate practices, and 73% demand addressing inequality. Mintel's Crabbe envisions a "human-as-premium" trend, empowering artisans beyond algorithms. Amidst AI integration, a consensus emerges to shield workers, emphasizing digital-physical convergence. Consumer adaptation is crucial, fostering dialogues on intentional tech applicability.

2. Accelerated Advancement: The Trajectory of Electric Vehicle Adoption in Developing Asia

China dominates EV sales, commanding a quarter of the global market, with Hainan province setting a bold 2030 target to phase out traditional vehicle sales. In contrast to solar tech's economic appeal, EVs face challenges in affordability and charging infrastructure, hindering their impact in developing nations. At COP28, 56 governments, including the UK, Sweden, and Germany, pledged support to position EVs as the top option globally by 2030. Developing Asian nations—Thailand, Indonesia, and India—forge independent EV industries. Thailand, a regional auto powerhouse, sees 9% EV adoption, spurred by a $1.44 billion BYD plant. Indonesia leverages nickel reserves for an EV supply chain, while India, backed by a $1.3 billion initiative, sees a surge in EV ownership, led by electric two-wheelers and rickshaws.

3. Spotlight on Scope 3 Disclosure

The intensifying focus on Scope 3 disclosure compels companies to reveal both direct and indirect emissions involving suppliers and end-users. Ivan Li, Asia Pacific Director of Strategy and Implementation at ENGIE Impact, emphasizes the heightened attention on Scope 3 emissions, citing a 2023 report from the CDP's Corporate Environmental Action Tracker. This report reveals a significant surge in global emissions coverage by companies with Scope 3 targets since 2019, reflecting an increased commitment to addressing indirect emissions and reducing overall environmental impact. Li anticipates greater scrutiny and pressure on companies for more comprehensive reporting in 2024, attributing this focus to new legislation enforcing stringent environmental reporting and sustainability guidelines.

 

In June, the International Sustainability Standards Board (ISSB) introduced disclosure standards covering general sustainability concerns (IFRS S1) and climate disclosures (IFRS S2). The escalating scrutiny from governmental bodies and key stakeholders propels corporations to proactively enhance transparency. Many companies embrace voluntary reporting structures, showcasing commitment through initiatives like seeking approval for science-based targets by the Science Based Targets Initiative (SBTi) and mandating comprehensive reporting on pertinent Scope 3 emissions.

4. Guidance away from Greenwashing

This is imperative as corporations integrate climate adaptability into their business strategies, according to Mintel's Crabbe. Trust and reassurance will become integral to environmental, social, and corporate governance (ESG) initiatives. Mintel's survey in the Asia Pacific region reveals that 74% of respondents expect brands to lead in addressing environmental concerns and champion climate solutions. Consumers express a desire for transparency, feeling that many companies are unclear about their positive climate impact. To build trust, brands should elucidate actions taken to reduce food waste, energy, and water usage, minimize packaging waste, adopt a circular economy model, and allocate profits to sustainability or ethical causes.

5. Election Dynamics in Asia: Impact on the Sustainability Landscape

With 40 national elections globally, and a quarter in Asia, observers predict incoming administrations will likely maintain predecessor policies on climate change. Indonesia's leader, Joko Widodo, expects his successor to continue the ban on nickel ore exports. However, Rere Christanto of the Indonesian Forum for the Environment highlights candidates' silence on downstream nickel industry impacts, such as deforestation and environmental law violations. In India, Prime Minister Narendra Modi's promise of 500 gigawatts of clean energy is short of emphasis on coal reforms, a stance unlikely to change despite elections.

 

The landscape of 2024 is marked by the dominance of Generative AI. As businesses navigate these trends, a proactive and transparent approach to technology, environmental practices, and governance becomes paramount for success and resilience.