ERM - The Ongoing Evolution of Sustainable Business: 2023 Trends Report

The trends report details how companies are working toward a more just and sustainable world through the lens of ten macrotrends:

1. Integrating ESG
   In 2022, issues including fragile global supply chains and geopolitical instability challenged corporate ESG integration. Despite the difficulties such issues create, stakeholders have continued to propose more ESG-related regulations. ESG concepts are expected to be further integrated into the ways companies conduct business in 2023.
   
   
2. Valuing Human Capital
   The workplace of 2023 is dramatically different than that of its pre-COVID-19 counterpart. Changes such as more flexible and remote work options and the increased pursuit of purposeful work have redefined the employee-employer relationship. In this environment, expectations for valuing human capital continue to grow.
   
   
3. Responding to climate change
   Combatting the climate crisis is a generation-defining challenge. While society is working to accelerate its efforts to secure a livable future, the pace of corporate climate action is not yet fast enough. Despite this situation and disruptive events like the war in Ukraine, companies continue to seek better ways to address climate change.
   
   
4. Safeguarding natural systems
   Concern about nature and biodiversity has lagged the attention drawn by the climate crisis, but this is changing. The nature agenda is now top of mind after the United Nations 15th Biodiversity Conference in December 2022 agreed to the Kunming-Montreal Global Biodiversity Framework and as the linkages between biodiversity and climate are recognized.
   
   
5. Building sustainable and resilient supply chains
   Supply chain challenges have been front and center in recent years, especially since COVID-19 emerged. The pandemic and other complications have increased consumer awareness of where and how goods originate. At the same time, companies are finding that better understanding of complex supply chains is key to solving the most complicated ESG issues.
   
   
6. Enabling sustainable consumption and production
   The urgency of figuring out what to do with the world’s waste is underlined by the phenomenon of even low waste production regions being overwhelmed with discarded goods. Businesses and governments are making headway developing circular strategies and models aimed at transitioning from take-make-waste to take-make-reuse approaches, but these efforts must accelerate.
   
   
7. Applying technology to sustainability
   Technological advancements support the rapid development of more sustainable economies and societies. As technological capability and accessibility grow, companies must grapple with important and complex questions about the ethical and sustainable application of the technologies available to them.
   
   
8. Respecting fundamental rights
   Numerous events across the world shaped the human rights landscape of 2022, from Russia’s invasion of Ukraine and massive protests against the Iranian government, to the overturning of Roe v. Wade in the U.S. Stakeholders will continue to demand that companies respect the fundamental rights of every person they interact with directly and indirectly.
   
   
9. Shaping policy, regulations, and norms
   Recent global developments including geopolitical instability, regulatory initiatives, and civil society activism are redefining how businesses approach sustainability. With further changes and pressures certain in 2023, companies need to constantly update their sustainability playbook.
   
   
10. Moving toward stakeholder capitalism
    Views on Stakeholder Capitalism have become increasingly mixed. Much heralded in recent years, criticism of the concept has grown, most notably in the form of anti-ESG shareholder proposals. Even so, actions such as Patagonia’s commitment to donate future profits to protect nature and fight climate change and BNP Paribas’ creation of a data solution for investors to evaluate companies’ alignment with the UN SDGs demonstrate that stakeholder capitalism is still a powerful force.