How Sustainable was 2023?
This year marked a significant shift in global consciousness and action towards sustainable practices. From groundbreaking research to innovative business strategies and transformative methods to a swarm of new climate tech companies, 2023 demonstrated a strong commitment to tackling the pressing environmental challenges of our time. Maintaining global temperatures within 1.5°C of pre-industrial levels is not an easy feat. This target increasingly appears to be slipping beyond our grasp, raising concerns about our ability to control and mitigate the escalating impacts of climate change effectively. In the midst of major climate catastrophes and short falls, there was some good news that happened for the planet and people. And while we saw a surge of interest, awareness, and messaging, action was slow to follow.
This sentiment was reflected in the startup and investment space, a combination of the market and other forces resulted in a 40% drop in climate tech investments with the global sustainability-focused funding remaining flat at around $13.9 billion with significant climate-focused funds available for investment - $33 billion. All through the year we saw an overall increase in the number of climate tech startup deals, despite a decrease in overall investment amounts.
The question of the year remained - Are we moving to slowly for the immensity of our challenges?
Many believe the answer is YES - much too slow.
So yes, 2023 was a year of noteworthy progress in the realm of sustainability, but this progress is tempered by the reality that efforts are still not matching the scale and urgency of the environmental crises we face. Amidst a backdrop of significant climate catastrophes and ongoing ecological challenges, the strides made in sectors like renewable energy, corporate sustainability, ESG, and environmental policy, though progressive, are not yet sufficient.
Seven in ten people anticipate climate change will have a “severe effect” in their area within the next ten years - Ipsos
The pace of change, while positive, is outstripped by the rapidly escalating demands of a planet in distress, highlighting a gap between current actions and the transformative measures needed. COP28 was a great example of the years theme, we make historic strides yet they are not quite aggressive enough.
Its Official: 2023 is the Hottest Year on Record in Human History
2023 has officially become the hottest year on record, surpassing previous temperature highs and marking a concerning milestone in the ongoing narrative of global climate change. From heat records that swept the globe, to cyclones, tornadoes, and monsoon flooding that devastated communities, to one of the nasties wildfire seasons on record - in Canada alone the fires destroyed approximately 5% of the Canadian forests. These unprecedented (now a bit expected) climate events underscore the urgent need for comprehensive and sustained efforts to address environmental challenges worldwide. There is no more hiding from our climate reality.
Read more on CNN, the New Yorker, and the Carbon Brief
Fossil Fuels made History at COP 28
At COP 28, fossil fuels made a historic breakthrough, marking a significant shift in the global energy dialogue. As countries made a historic pledge to ‘transition’ energy systems away from fossil fuels, many felt that it was too weak and not directive enough for a full fossil fuel phase out, while the future of carbon markets remained murky at best. And while COP28 was plagued by the presence of so many oil & gas lobbyists, it was also the most attended COP to date, signalling the interest and importance of sustainability and the need to face climate change globally. Overall progress was made, but as many critics pointed out, not enough not quick enough.
Sustainability Transformation in Organizations
As pressure from looming ESG disclosure and reporting regulations across the US, Europe, Canada and many other jurisdictions, has put pressure on transformation of organizational approaches to sustainability. These regulatory pressures necessitated a fundamental shift in how organizations approached sustainability, moving it from a peripheral issue to a core business strategy. We are at the beginning of a transformation, with much work yet to be done on the regulatory, market and company levels, but one thing is certain: the momentum towards sustainable practices is irreversible and is reshaping the landscape of global business and environmental policy.
Greenwashing is under the MicroScope
With an astounding 70% increase in climate-related greenwashing incidents and litigations across the world. Governments, regulatory bodies, and consumer advocacy groups intensified their efforts to identify and penalize misleading environmental claims, signaling a growing intolerance for deceptive practices in the realm of sustainability. And its not specific to one industry - a diverse group has been hit from H&M, Ryan Air, MacDonald's and many more. This trend reflects a broader push for transparency and accountability in environmental marketing and corporate sustainability reporting.
Read more on RepRisk, KPMG, and Bloomberg
We Look to AI to Help Us Tackle Climate Change
In 2023, while there was a notable increase in sustainability awareness, the pace of corresponding action lagged. Amidst this, Artificial Intelligence (AI) emerged as the standout focus of the year, capturing widespread attention for its capabilities and for its potential in addressing climate challenges. AI's capabilities, ranging from enhancing weather forecasting and optimizing climate action strategies to automating processes, hold immense promise in supporting sustainable initiatives. Despite AI's own environmental footprint, which is an inherent aspect of any technology, its responsible deployment could prove to be a vital asset in our journey towards true sustainability. So will AI save us all? Time will tell.
Read more on Google, UN, and BCG.
Looking ahead, the big question for business remains: How can the business sector navigate the immediate need for environmental action while effectively addressing the complexities inherent in capitalism, economic and technological shifts, as well as the essential process of disentangling these intertwined challenges?
This question not only challenges the current approaches and strategies but also calls for a deeper introspection into the significant role of business in shaping a sustainable future. As the world grapples with the realities of climate change and environmental degradation, the actions and innovations of the business sector in the coming years will be crucial in determining the trajectory of our global environmental health.
