Sustainability: What to Expect?
The Geopolitics of the Green Transition – January 29, 2024
Assessing the implications of regulations, resource availability, and supply chain transformation that sustainability professionals need to know.
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In today’s letter, we cover four themes that we will be tracking throughout the year 2024.
2024 is a big year for sustainability regulations and corporations need to get serious. Major new regulations are coming online in large markets and more regulations are being finalized. Thus, corporations need to either implement or prepare to implement a whole host of new requirements. Among those are the EU’s Corporate Sustainability Reporting Directive (CSRD), California’s Climate Corporate Data Accountability Act (SB 253) which is likely to inspire other states (Washington, Massachusetts, and others), the Sustainability Disclosure Requirements in the UK, and, finally, Germany’s Supply Chain Due Diligence Act. In the US, the SEC is expected to release its climate disclosure rules by April. And under the UN umbrella, the world may well finalize a Global Plastics Treaty to tackle plastic pollution. The ambitious treaty could be the ‘most important green deal’ since the Paris Agreement. Regulators increasingly define sustainability through a broader lens, looking beyond greenhouse gas emissions (GHG) and net zero toward nature conservation, restoration, and social issues. The EU will be finalizing its Deforestation and Nature Restoration regulations as well as its Corporate Sustainability Due Diligence Directive. These regulations are primarily designed to standardize reporting, facilitate progress assessments, and allow for benchmarking. They are also increasingly designed to push all companies toward new and improved business models. More and improved data should facilitate this process but also give regulators new means to accelerate that transformation.