Lead Authors: Lai Ly, Global Head of Sustainability Research, S&P Global Ratings, Lindsey Hall, Head of Thought Leadership, S&P Global Sustainable1
Bruno Bastit, Corinne Bendersky, Terry Ellis, Paul Munday, Bruce Thomson – S&P Global Ratings.
SPGlobal.com, January 15, 2024
As the physical risks from climate change increase, we expect 2024 to bring a heightened focus on adaptation and resilience planning alongside rising understanding of the impacts of climate change — including on human health.
In the year ahead we expect companies will take steps to measure and manage material sustainability issues, such as plastic, throughout their value chains under some countries’ mandatory disclosure standards. Assessing value chain impacts is complex, highlighting the need for high-quality data and transparent methodology.
As reliance on newer technologies such as artificial intelligence grows, we expect increasing pressure to ensure more robust governance to manage the risks and opportunities AI presents.
Lastly, we anticipate that the increasing urgency around decarbonizing the economy could take the global green, social, sustainability, and sustainability-linked bond (GSSSB) market closer to the $1 trillion mark.
Over the past several years, many companies globally have taken a voluntary approach to sustainability goals, decisions and strategies. Throughout 2023, a common refrain was that progress toward sustainability goals will be private sector-led and government-enabled.
As 2024 begins, however, many stakeholders are sitting on the sidelines as they wait to see what policies and regulations unfold. This wait-and-see approach is further influenced by the geopolitical environment, evolving attitudes toward the concept of environmental, social and governance or ESG, and continued fear of potential litigation.
This collective breath-holding stands at odds with growing understanding of the risks and opportunities that sustainability issues pose. Stakeholders at the forefront of sustainability discussions continue pushing for action to address climate change — and increasingly, the interlinked crisis of biodiversity loss — in a just and equitable manner.
This tension between urgency and inaction will continue to influence sustainability discussions throughout 2024, as reflected in the trends below.
These trends are expected to impact a wide range of stakeholders, from companies, investors and workers to communities, regulators and policymakers. This list builds on many of the trends we identified last year, several of which we believe will remain relevant in 2024.