Before discussing the sustainability trends that will shape the business agenda in 2023, we want to reflect and review the events of the past year.
Each year has its events, but the past 12 months seem to have yielded a decade of issues and moments, if not of generational consequence. Chief among these, Russia’s invasion of Ukraine has changed geopolitics, economics, and sustainability, the implications of which are still being felt. In many ways, global societal networks and interdependencies such as social media and supply chains have underscored the invasion’s effects, particularly on energy, food security, and migration from Ukraine and beyond. The economic disruptions caused by the war, combined with the highest inflation in decades, have further challenged government and business leaders. In the year As 2023 begins, recession looms, and communities are struggling financially after years of strong growth and low unemployment.
Global and local corporations have been deeply affected by the war in Ukraine, the impact of the market and the broader economic headwinds. This has forced the private sector to decide whether to fall back on fundamentals and scale back corporate sustainability efforts or continue ESG efforts. While some companies have scaled back sustainability activities and investments, many have embraced them, recognizing that strong sustainability performance increases their resilience to external shocks and strengthens long-term profitability.
Corporate sustainability highlights from 2022 include companies linking executive compensation to ESG factors, helping employees cope with economic hardships with bonuses and non-reserved raises, setting net zero and nature positive goals, adopting and increasing circular solutions to reduce waste in business models such as recycling. Supplier diversity to strengthen inclusion and equity efforts and increase overall business resilience.
Corporate sustainability has faced challenges this past year. On the one hand, the Russian invasion complicated ESG-related investment decisions as investors grappled with whether investments in fossil fuel and defense companies were ethical given the energy and security challenges raised by the war. On the other hand, some investors and politicians have pushed back on sustainability and ESG initiatives, accusing them of putting society ahead of profit.
The war in Ukraine casts a shadow over 2022. We were shocked by the human suffering caused by this crisis. Still shocking us. In such unique and tragic circumstances, it can be difficult to move forward on other pressing issues such as climate change and natural disasters. However, as we mentioned above, there is also much to celebrate.
The 2023 Sustainability Trends Report details the progress companies are making towards a more just and sustainable world. We hope you enjoy reading about the trends we identify and the corporate responses to them, and that some of them will spark action in your own lives and organizations. As always, we welcome any feedback.
Download the report for more information.