In 2024 ESG (Environmental, Social, and Governance) policies are here to stay. The rapid adoption of mandatory environmental standards is important not only because of the number of companies that will soon be required to report according to standardized frameworks, but also because of the depth and reach of the reporting requirements.
In the coming years, companies will be required to take ESG criteria seriously, not only as an exercise in compliance and risk management, but as an opportunity to redesign their business models from the ground up. True ESG integration will give way to new design processes, acquisition strategies wil be rewritten, and marketing and communication endeavors will be changed forever. ESG trends for 2024 indicate that these criteria will evolve from being “additions” to an integral part of companies’ core strategies.
Transparency in the Supply Chain
The creation of sustainable supply chains is a process that has been pending for a long time. In 2024 this will acquire a new meaning due to the updated reporting requirements.
The supply chain is often an area where companies can find the culprit steps or processes that cause their Scope 3 emissions, also known as indirect emissions, which often result in a significant carbon footprint, which may surpass the target.
For the PR professionals working with companies with complex supply chains, transparency and effective communication are now a priority. Ethical practices, such as fair labor conditions and responsible sourcing, are essential to the well-being and the social dimension of the ESG, specially for multinational companies.
Attracting Talent
More and more companies are proactively hiring for new sustainability roles and are also investing in related skills.
In a 2023 study by Indeed, Gen Z and Millennial workers prioritized sustainability: 16% of millennials have already changed jobs to one that fits their values, and 23% are about to do so.
Candidates are increasingly analyzing a company’s ESG criteria before applying for a position, and this is why PR teams must guarantee that the company’s commitments are communicated to potential employees. Using a report with messages about environmental issues to attract and retain new talent in corporate roles, whether they are related or not to sustainability, is one of the ESG trends for 2024.
Technological Approaches Driven by Data in Order to Draw Analysis
The integration of technology and data analysis is transforming the way in which investors evaluate ESG risks and opportunities. Advanced tools and platforms are currently available to help investors analyze large quantities of data, which allows them to make more informed decisions. These tools use AI, machine learning, and natural language processing to extract valuable information for complex data sets, giving investors the possibility to identify risks and develop personalized investment strategies.
Read also: Nearshoring as an accelerator for the development of sustainable industrial parks
Climate Risk Management
The increasing frequency of extreme meteorological phenomena entails important risks to assets, investments, and operations in the whole supply chain of a company.
Companies that are not prepared for these events will face severe interruptions. By 2024, it is likely that climate risk management will be included in companies’ core risk management strategies.
It is expected that companies will adopt more integrated approaches, incorporating climate scenario analysis in order to understand the potential impacts to their businesses during different global warming scenarios. This will create new opportunities for innovation and resilience.
Greenwashing Under Fire
Greenwashing is a term that has become popular while trying to criticize weak or deceptive corporate efforts in sustainability. In 2024 there will be more severe legal consequences regarding this.
Compliance will become a key concern for ESG teams, which will need to work closely with marketing teams to guarantee that the environmental messages the company puts forth comply with legal requirements.
At Advance Real Estate we are closely monitoring ESG trends for 2024, and we have integrated strategies into our investments and operations in order to become a more resilient company that can face the challenges the future brings.
Sources of information:
- https://greenly.earth/en-us/blog/company-guide/the-esg-trends-to-watch-in-2024
- https://www.ambitiouspr.co.uk/2024-esg-trends/
- https://permutable.ai/2024-esg-trends-forecast-discover-the-key-trends-shaping-sustainable-investing/
- https://www.apiday.com/blog-posts/5-sustainability-trends-to-follow-in-2024
- https://fiscalnote.com/blog/top-esg-trends-2024
