In the spirit of Charles Dickens, who gave us A Christmas Carol and popularized the holiday season, here is my take on 2024’s ESG & climate landscape. Another of his classics, A Tale of Two Cities, is a perfect analogy for 2024’s ESG & climate landscape. Its iconic opening line-”It was the best of times, it was the worst of times”-speaks to the contrasting themes in this year’s ESG and Climate News.
Here are five sustainability stories from the year’s biggest news stories, which fall in the best of times: It Was the Best of Times
1. New Regulations A Plenty
It was a year in 2024 when new regulations on ESG for good were introduced to nudge companies to act on sustainability:
California Climate Disclosure Law: The policy requires companies to report on climate emissions and risks from 2026 and survived legal challenges. The court has upheld the policy and inspired similar bills in 4 other states. This week, the California Air and Resources Board solicited public comment on several key questions for this policy. It will be open until Feb. 14th.
EU Directives: Following the Green Deal, the EU enacted the Corporate Sustainability Due Diligence Directive (CSDDD), which demands that businesses understand and act against social and environmental impacts at every stage of their supply chain. Going live in 2027, Europe will be late to Corporate Sustainability Reporting Directive (CSRD), whose first wave of reporting will happen in the spring of 2025. The rating providers under a new ESG Ratings Regulation will have to make publicly available a description of the methodology starting from mid 2026 and avoid any sort of conflict of interest.
International Sustainability Standards Board (ISSB): Over 30 jurisdictions now claim to align with the standards of ISSB. Finally, UK Government is set to adopt the climate standard by ISSB for the UK-based companies.
2. Companies Continue To Take Voluntary Action
Reporting Scope 1 and 2 emissions by US public listed companies by size. Source HIP Investors
But the ESG backlash remains, and companies were acting voluntarily in 2024. A record number of companies reported on social metrics and climate emissions; meanwhile, 95 percent of the world’s largest 250 companies publish a carbon target. Some have achieved great success, as evidenced by Walmart’s ambitious Project Gigaton – to reduce a billion metric tons of emissions from its sprawl supply chain – where it finished six years early!
And mounting evidence continues to pile up that climate risk mitigation just makes economic sense. This month, a new report out from BCG indicates that for every dollar invested in reducing climate risk, there can be as much as $19 in return.
3. Renewables and EVs Hit Records
2024 was the year of records for renewable energy and EV adoption. Zero-carbon energy now accounts for 40% of world output and the International Energy Agency, IEA forecasts nearly triple renewable by 2030, and is on course at a pace currently running at 2.7 times levels in 2022. For EVs, the number of new vehicles being bought worldwide is up 35% from last year and six times more than in 2018. We also saw some emblematic wins with the closure of the UK’s last coal power station after 142 years of producing power from coal and in the US, wind energy beat out coal for two consecutive months.
4. Nature and Biodiversity: On the Agenda
World’s largest biodiversity event This year took place in Colombia, Cali. While no deal could be signed, several of its announcements showcased how companies value nature and biodiversity with spectacular 43% growth as the number of reporting firms reports to CDP and passed the milestone over 500-companies at TNFD Taskforce on Nature-related Financial Disclosures. But enough depressing news. Related, business impacts on biodiversity per annum – between $10tn and $25tn, according to one report this week.
5. Sustainability Professionals and Activists Stand Steady
Sustainability professionals have bucked political pushback, reporting and regulatory fatigue. The 2024 Joel Makower survey proves it shows majoritarian stability at work in the sustainability professions-a majority of workers remain cautious optimism.
Climate activists won some battles; the first climate case has been heard at the International Court of Justice, and activists in Switzerland won their climate case at the European Court of Human Rights, having obliged a change in policy on Switzerland. Meanwhile, “activists” were sent to prison for many long years as common criminals.
Source:ESG NEWS