ESG is a framework used to assess an organization’s business practices and performance on various sustainability and ethical issues. Photo: Internet
Environmental, social, and governance (ESG) is now no longer a new concept but a reality resulting from the popularity it has gained over the past few years. This popularity is anchored on its potential to reduce costs for businesses, boost stock performance, and increase customer and employee loyalty — among other things.
As more companies get on board with ESG, new statistics are emerging every day that show how it is shaping the business landscape.
According to the PwC’s Asset and Wealth Management Revolution 2022 report which captures the views of 250 institutional investors and assets managers worldwide: ‘’ESG-focused institutional investment is seen soaring 84% to US$33.9 trillion in 2026, making up 21.5% of assets under management’’.
With this evident increase in ESG adoption, trends also keep changing to suit the dynamic business environment, and the 2024, the landscape of ESG is poised for significant evolution, driven by societal shifts, regulatory changes, and technological advancements.
Therefore, understanding these emerging trends is crucial for businesses, investors, and policymakers as they strive to create a more sustainable and equitable future.
Here are the ESG 2024 trends to look out for – which perhaps shall be used to assess your organization’s business practices and performance on various sustainability and ethical issues, and further measure business risks and opportunities in those areas.
Climate action
In 2024, the urgency to address climate change reaches new heights. With increasing awareness of the catastrophic impacts of global warming, businesses, and governments are under pressure to accelerate their efforts toward carbon neutrality. Expect to see a surge in net-zero commitments across industries, coupled with tangible action plans to reduce emissions and transition to renewable energy sources.
Social justice and diversity
The events of recent years, including the global pandemic and widespread social movements, have heightened the focus on social justice and diversity.
Therefore, in 2024, stakeholders will demand greater accountability from organizations regarding racial equality, gender diversity, and employee well-being. Companies that prioritize diversity and inclusion initiatives will not only foster a more equitable workplace but also enhance their reputation and attract top talent.
Sustainable finance
Sustainable finance continues to gain momentum as investors increasingly recognize the financial risks associated with environmental and social issues. In 2024, expect to see a rise in green bonds, sustainability-linked loans, and other financial instruments aimed at funding projects with positive environmental or social impacts. Impact investing, which seeks to generate measurable social or environmental benefits alongside financial returns, will also become more mainstream.
Transparency
Following the emergency of the COVID-19 pandemic which exposed vulnerabilities in global supply chains, prompting businesses to reevaluate their sourcing practices and supply chain resilience, in 2024, there will be a greater emphasis on transparency and traceability throughout the supply chain, with consumers demanding information about the environmental and social impacts of the products they purchase. Companies that prioritize ethical sourcing and supply chain resilience will gain a competitive edge in the marketplace.
Meanwhile, governments around the world are increasingly implementing regulations aimed at promoting ESG disclosure and accountability, and going forward, there is an expected increase in further developments in regulatory frameworks related to climate risk disclosure, human rights due diligence, and corporate governance.
Additionally, standardized reporting frameworks such as the Task Force on Climate-related Financial Disclosures (TCFD) and the Sustainability Accounting Standards Board (SASB) will continue to gain traction, facilitating comparability and transparency in ESG reporting.
The year 2024 holds significant promise for advancing the ESG agenda and driving positive change on a global scale. From climate action and social justice to sustainable finance and supply chain transparency, the ESG landscape trends are interconnected and multifaceted.
Therefore, by embracing these trends and integrating ESG considerations into their strategies, businesses, investors, and policymakers can contribute to a more sustainable and resilient future for generations to come.