Nature and Biodiversity

Why 2024 is the year sustainability develops a credible business case

Eco friendly industry concept. 3d rendering of green factory icon on fresh spring meadow with blue sky in background, illustrating sustainability

Research shows a significant change in. the understanding of the business case for sustainability among top leaders globally Image: Getty Images/iStockphoto

Cyril Garcia
Head, Sustainability Services and Corporate Responsibility, Capgemini
Share:
Our Impact
What's the World Economic Forum doing to accelerate action on Nature and Biodiversity?
A hand holding a looking glass by a lake
Crowdsource Innovation
Get involved with our crowdsourced digital platform to deliver impact at scale
Stay up to date:

Climate and Nature

This article is part of: Centre for Nature and Climate
  • The number of executives globally who understand the business case for sustainability tripled between 2022 and 2023.
  • New research suggests that business leaders are clear on the return on investment (ROI), and a significant proportion of companies will increase sustainability investments in 2024.
  • Organizations can make a substantial impact by progressing on reporting emissions, implementing circular economy practices and leveraging climate technology.

As we step into 2024 and the world grapples with an increasing number of climate disasters and their ever-growing cost, a paradigm shift is underway among global organizations.

In 2023, we saw a significant change in the understanding of the business case for sustainability among top leaders globally. The proportion of executives who thought it was clear tripled compared to 2022, as per the Capgemini Research Institute report.

Investments in sustainability initiatives remained flat between 2022 and 2023 and represented less than 1% of total revenue in 2023, while marketing budgets were equivalent to 9.1% of annual revenue on average.

Image: Capgemini Research Institute, A World in Balance Surveys Nov 2022 and Nov 2023

Fast-forward to now, and sustainability is becoming a priority investment area, increasingly viewed as an opportunity to create value. At the end of 2022, only a third of organizations intended to increase their sustainability investments. Today, the proportion is over half.

Image: Capgemini Research Institute, Embracing a brighter future, Jan 2024

It is good news that the private sector is fully grasping its responsibility to contribute to the transition towards a more sustainable economy and that it understands it is the only way to create sustainable value.

Have you read?

    Companies must lay the foundations for sustainable transformation

    In the last year, we have seen a major surge in optimism among executives about the future of their organizations. Where business outlooks are positive, investments generally follow. But while over half say they’ll earmark more funds for sustainability in 2024, they must hone in on areas where they can make the most impact.

    First, you can't manage what you can't measure, so companies' sustainability reporting capabilities need attention. While most organizations have a handle on their Scope 1 and 2 emissions, understanding and cutting Scope 3 emissions remains challenging: the proportion of companies that confidently measure Scope 3 emissions dropped in 2023. It's understandable, as these emissions are not within the company's direct control, but they also tend to be far greater than the organization's own emissions. It is paramount to ensure the company has internal and/or external resources to track them and ensure they go down properly.

    Organizations can reap major benefits by putting funds towards implementing circular economy principles and sustainable product design. They can also implement more sustainable products and services.

    Discover

    How is the World Economic Forum ensuring sustainable global markets?

    Expectations are high for climate technology

    Climate technologies (renewables, batteries, low-carbon hydrogen, carbon capture, and alternative fuels, among others) are an essential complement to behaviour changes.

    Three-quarters of business leaders see them as a key lever to decarbonize their value chains and create new industries and business models. We see a significant dynamic in this area, whether in terms of innovation or investment, supported by political momentum, particularly in the United States, China and the European Union. However, as of now, a key hurdle is the added cost of these technologies. Innovations, such as hydrogen and carbon capture, are still costly, which, in turn, increases product pricing. And, while organizations say they would be willing to pay a 'green premium' of around 9%, the expense of low-carbon cement produced using carbon capture is estimated to be 75% to 140% higher than conventional cement.

    At the same time, there are industries and products – such as electric vehicles (EVs) – where green premiums have fallen drastically, inspiring climate tech adoption. Unsurprisingly, our research confirms that the climate techs that are scaling up, such as EVs, solar power, wind and batteries, are mature from a technology standpoint, supported by incentives and favourable policy and close to parity with traditional tech in terms of costs. But to be scaled, climate tech must be made commercially viable. We will need significant mobilization across industries and borders, starting with governments.

    Besides climate tech, companies should also leverage digital technologies, such as AI, digital twins and additive manufacturing. When adopted at scale, they will be essential in reducing development costs, increasing efficiencies and speeding up innovation processes.

    We are seeing the emergence of an eco-digital era

    Over half of organizations believe in the transformative power of technology to accomplish sustainability objectives and digital investment is set to double as a proportion of revenue over the next five years. If properly targeted, this increased digital adoption could achieve considerably more reductions in greenhouse gas emissions and energy consumption than it already has.

    These evolutions will shape an eco-digital eraTM: a new and emerging business landscape that is more interconnected, data-driven, accessible, and sustainable. With the integration of mainstream digital technologies – such as data, analytics and cloud – coupled with innovative advancements, such as generative AI, augmented reality and virtual reality, we will see reimagined business models contributing to a broader societal impact.

    Navigating the opportunities presented by the eco-digital eraTM requires a new, strategic approach. Organizations need to:

    • Focus on identifying efficiencies to streamline processes and drive significant cost savings.

    • Ensure a harmonious integration of immediate wins and long-term sustainability.

    • Invest newly unlocked resources into digital and sustainable transformation initiatives.

    • Make sustainability an intrinsic part of products and services.

    • Forge partnerships that amplify sustainability efforts and contribute to the broader ecosystem of positive change.

    Organizations have only scratched the surface of what can be achieved by harnessing digital technologies. One thing is for sure, the sum will be greater than the parts and will be key to unlocking a sustainable future.

    Loading...
    Don't miss any update on this topic

    Create a free account and access your personalized content collection with our latest publications and analyses.

    Sign up for free

    License and Republishing

    World Economic Forum articles may be republished in accordance with the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International Public License, and in accordance with our Terms of Use.

    The views expressed in this article are those of the author alone and not the World Economic Forum.

    Related topics:
    Nature and BiodiversityForum Institutional
    Share:
    World Economic Forum logo
    Global Agenda

    The Agenda Weekly

    A weekly update of the most important issues driving the global agenda

    Subscribe today

    You can unsubscribe at any time using the link in our emails. For more details, review our privacy policy.

    5 ways sustainable forestry can support climate action, development and biodiversity

    Charlotte Kaiser

    April 23, 2024

    About Us

    Events

    Media

    Partners & Members

    • Join Us

    Language Editions

    Privacy Policy & Terms of Service

    © 2024 World Economic Forum