While the world grapples with a spate of global geopolitical turmoil, businesses are pushing to take a step forward and become greener still, but challenges arise. The latest report by the Capgemini Research Institute, A World in Balance 2024: Accelerating Sustainability Amidst Geopolitical Challenges, describes how technology and regulatory frameworks are informing policies that nudge them toward a greener future. It is far from smooth, though.
Climate Tech and Regulatory Push
The increasing relevance of climate technology brings the business leader to ask what they are doing to help propel the world toward sustainable economies. “The power and responsibility lies squarely with the business leader,” says Cyril Garcia, Head of Global Sustainability Services at Capgemini, “to help shape us toward a more sustainable economy.” A key regulation in hastening this shift is the Corporate Sustainability Reporting Directive, by way of the EU, and its ramifications for companies. A significant 73% of leaders believe the CSRD is better equipping them to report on and track their sustainability efforts.
At the same time, the organization seems not well prepared for future regulatory requirements, especially concerning Scope 3 emissions. Nevertheless, 86% of organizations seem ready to start reporting direct emissions, and only 36% feel prepared to meet the challenge of reporting on the complexities surrounding downstream emissions.
Geopolitics Slow Sustainability Progress
Geopolitical tensions represent the biggest hurdle. Almost two-thirds of executives identify global conflicts, including the US-China trade dispute and Europe’s energy crisis, as a major roadblock to their sustainability goals. Business leaders in Sweden are concerned, as 75 percent believe political instability is a significant threat to progress.
Consumer Trust on the Decline
Additional issues are the increasing consumer skepticism. Alarming, 51% of consumers now believe that companies are greenwashing their sustainability efforts, sharply up from 33% in 2023. Transparency is the way to win back public trust. According to Garcia, “the best way to build trust and credibility with consumers is by showing tangible outcomes.”
The challenge for the firms is that while much momentum is gained in the sustainability movement, balance must be struck between geopolitical uncertainty, changing regulations, and building consumer confidence.