Continuing the sustainability drive in business

Continuing the sustainability drive in business

Recently, people have recognized the significant impact of human activities on the planet, so attention has been given to sustainable practices and reducing environmental footprint.

Sustainability is not just a buzzword but rather a multifaceted concept that demands attention. It is about finding ways to meet the needs of the present generation without compromising the ability of future generations to meet their own needs. Hence, sustainability requires people to consider the social, economic, and environmental impacts of their actions and decisions.

The idea of sustainability covers a broad range of actions aimed at conserving natural resources and ecosystems that are crucial for life on the planet. It calls for a forward-looking approach, cooperation across different sectors, and holistic strategies to tackle today’s intricate problems.

Governments, businesses, and individuals alike are now taking action to reduce their carbon footprint and promote sustainable development.

Global green bond market

The global green bond market is poised to become one of the key sustainable trends in 2024, with continued growth expected in sustainable bond issuance, particularly in the green bond segment. This growth is driven by several factors, including climate policies, investor demand, and global efforts to decarbonize the economy and achieve sustainability goals.

According to a report of S&P Global, the issuance of global green, social, sustainability, and sustainability-linked bonds (GSSSB) is expected to continue growing, with a particular focus on decarbonizing the economy and addressing sustainability goals.

“While we expect 2024 to be a tough year for borrowers across all asset classes as tighter financing conditions continue and amid softer economic conditions, the increasing urgency around decarbonizing the economy could take the GSSSB market closer to the $1-trillion mark,” the report stated.

One of the main drivers of growth in the green bond market is the global push to combat climate change. Several partnerships and deals have spurred demand for green bonds as investors seek to align their portfolios with climate targets.

As governments and companies increasingly commit to net-zero emissions targets, the green bond market is expected to contribute to financing renewable energy projects, sustainable infrastructure, and other climate solutions.

Renewable energy adoption

Global efforts to accelerate the production and application of renewable energy sources are set to make 2024 a year for renewable energy adoption. This trend is driven by the declining costs and increasing accessibility of renewable technologies, as well as growing international support for sustainable development initiatives.

Renewable energy sources such as solar, wind, hydro, and geothermal power are becoming increasingly cost-effective and accessible, making them a viable alternative to traditional fossil fuels. According to the International Energy Agency (IEA), the cost of renewable technologies has been declining rapidly, making them more competitive with fossil fuels. Global renewable capacity additions are also set to soar by 107 gigawatts (GW), the largest absolute increase ever, to more than 440 GW in 2023.

Climate’s impact on human health

In 2024, the world will pay more attention to the economic and financial costs of the adverse health impacts caused by climate change. This issue has been a concern for a long time and was officially placed on the global agenda at the UN’s COP28 Climate Change Conference held last December. The agreement came with an initial $1 billion in financial commitments from governments, multilateral development banks, and philanthropies.

Based on the report of S&P Global, the effects of climate change are already being observed and are likely to worsen without adaptation. As temperatures rise, the risks related to the spread of infectious and vector-borne diseases, access to sufficient high-quality water and food, and the direct health impacts of extreme weather events are all heightened.

Unfortunately, research shows that these effects are likely to have a greater impact on the health of communities that are already vulnerable. This includes those living in poverty, exposed to physical climate risks, with limited access to quality health systems, and the elderly.

The consequences of climate change are not limited to health impacts alone. There are also direct economic impacts, such as fiscal and financial strains on health systems, productivity loss from working in hotter environments, and the disruptive effects of epidemics. These impacts can be felt throughout society and can be particularly challenging for already vulnerable populations.

However, it is important to remember that much more work needs to be done. Governments, businesses, and individuals all have a role to play in reducing greenhouse gas emissions and adapting to the impacts of climate change.

Adaptation and resilience planning

As the effects of climate change become more severe, it is becoming increasingly important to plan for adaptation and resilience. With the increase in sea levels, extreme weather events, and changes in temperature and precipitation patterns, communities and governments worldwide are beginning to prioritize strategies to adapt to these challenges.

According to S&P, adaptation and resilience planning this year includes understanding the impacts of climate change on human health and taking steps to measure and manage material sustainability issues, such as plastic, throughout value chains under some countries’ mandatory disclosure standards.

Increased pressure for better governance

The “World Economic Forum’s Global Risks Report 2024” highlights the impact of weakened economies and societies on the need for better governance and sustainable practices, highlighting the importance of developing a sustainable, resilient, and inclusive global economy.

Currently, executives are facing greater scrutiny and pressure to take public stances on controversial issues, leading to a need for more transparent and responsible governance. Corporate environmental, social and governance (ESG) goals and board oversight are also under increased pressure and subject to enhanced stakeholder scrutiny.

With future-proofing in mind, investors are looking for companies that are committed to sustainability and are willing to take action to address environmental and social issues. Companies that have strong ESG goals and policies are more likely to attract investment and to have a positive impact on the environment and society.

On the other hand, the need for better governance and sustainable practices is not just an issue for large corporations. Small businesses and startups also have an important role to play in promoting good governance and sustainability by adopting ESG goals and implementing effective governance policies. — Mhicole A. Moral