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2024 Sustainability Trends

Clarkston’s team of consultants have highlighted the top sustainability trends that businesses should consider. Read all 5 trends for 2024 by downloading the full report here.

As we enter 2024, sustainability remains an increasingly hot topic amongst consumers and organizations, and it continues to evolve to meet the needs of those consumers and organizations.  

In 2024, we expect there to be growing transparency and disclosure from businesses as hyper-aware and knowledgeable consumers increasingly search for products that are produced and distributed ethically. Further, as advancing technology, such as AI, helps enable more sustainable steps forward, organizations are now better able to make eco-conscious decisions along the manufacturing process and supply chain. With the pressure from shareholders, consumers, and governments alike to make these changes, organizations will continue to pledge their commitment to making sustainability a priority in their business plans or risk falling behind. In this piece, we explore five key sustainability trends for 2024. 

2024 Sustainability Trends

Trend #1: Evolving Reporting and Disclosure Requirements

Transparency has been a priority amongst consumers for some time, as shoppers like to know how the companies they purchase from are being managed and produced. This is especially true in the age of increasingly eco-conscious consumers. In fact, two-thirds of shoppers consider themselves environmentally aware. However, the trend has taken a step forward from just transparency.   

In 2024, organizations’ approach to sustainability may become mandatory to disclose instead of just a bonus to share. The SEC’s new climate disclosure rule introduced in March of 2022 would improve corporate transparency by requiring publicly traded companies to disclose information about climate-related risks. The agency is finalizing its proposal in the spring of 2024. If the rule is enacted, expect a large uptake in disclosure and transparency, as it will now be required for public companies to report their environmental business activities. This will stop public companies from selectively choosing the practices to report on by exposing all of them, whether good or bad.  

Europe has enacted similar regulations recently with the CSRD (Corporate Sustainability Reporting Directive) in effect since early 2023 and the NFRD (Non-Financial Reporting Directive) being in place since 2016. Both regulations were put in place by the EU and aim to increase the reporting of businesses and their environmental and social effect.   

While these regulations have already occurred in Europe, expect similar standards to be introduced for American businesses in the upcoming year. These new compliance standards, along with an increasing demand for transparency coming from consumers, will likely make disclosing sustainable strategies a priority for organizations in 2024. Companies may start to focus on consistent and integrated reporting, conduct materiality assessments to better understand sustainability issues that are most relevant to their business and stakeholders, as well as get direct feedback from their investors, customers, employees, and communities.  

Download the Full 2024 Sustainability Trends Report Here

Trend #2: The Evolution of Greenwashing to Greenhushing  

Greenwashing has been an issue amongst organizations as the demand for corporations to act sustainably continues to grow. Greenwashing is when an organization makes misleading or false statements about its sustainability efforts to appeal to eco-conscious consumers. While greenwashing has been occurring over the last couple of years, “greenhushing” has surfaced more recently. New regulations, along with fear of backlash coming from consumers, have pushed organizations into a novel approach called greenhushing, or keeping ESG and sustainability practices private and unpublicized.  

As we’ve seen, companies such as Zara, H&M, and many more have been caught greenwashing, pushing a false narrative about their practices. In the U.S., the SEC has been penalizing and fining organizations for greenwashing claims. Consumers want legitimacy and alignment between what is said and what is done, in turn, discrediting many companies that may exaggerate their commitment to sustainability. However, this trend has taken a turn.  

Historically, marketing your sustainability efforts would attract eco-conscious consumers, but now organizations are taking a “hush-hush” approach. Marketing your sustainable practices and ESG initiatives has opened organizations up to public scrutiny, bad press, and even financial penalties, especially if the claims are baseless or controversial. This has led to the introduction of a more secretive attitude toward sustainability and ESG reporting, as organizations fear the term ESG has become too politicized for them to publicize, contributing to the growing greenhushing ideology.   

Although the overarching goal for consumers is to encourage companies to support genuine sustainability efforts, greenhushing may divert marketing resources and initiatives away from eco-conscious practices. This could make this trend toward secrecy an issue in the future as companies may revert to deprioritizing their ESG and sustainability goals. Continue reading by downloading the full report below.

Download the Full 2024 Sustainability Trends Report Here

Read last year’s Sustainability Trends Report here.

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Contributions from Leah Harding

Tags: Sustainability, 2024 Trends