SUSTAINABILITY & ESG

The Sustainability Trends of 2023: Moving towards a greener economy

Sustainability has taken center stage in the global business agenda and this year has enforced significant changes in key areas of business.

By Full Time MBA

Sustainability has taken center stage in the global business agenda. The COP26 conference marked a pivotal moment, setting crucial targets to limit global warming to 1.5 degrees and achieve net-zero carbon emissions by 2050. Consequently, businesses worldwide are under immense pressure to contribute to the transition towards a green economy. The shift towards sustainability is evident across various industries, and this year there has been a number of transformative trends.

Sustainability Professor at Copenhagen Business School, Andreas Rasche, and Copenhagen MBA Graduate and Senior Sustainability Manager at Ascendis Pharma, Ivan Sokolov, spoke with Matt Kefford at BusinessBecause to discuss the sustainability trends of the year. Below it is summarised and you can view the full-length article here as featured on BusinessBecause.

1. REGULATION

Government regulations are fueling major sustainability changes. The USA's SEC will finalise 29 ESG regulations and propose 23 amendments, boosting sustainable governance. The EU's Taxonomy legislation mandates reporting on criteria like water impact and circular economy support. Companies must comply swiftly, prioritising sustainability.

“If you have neglected or downplayed [sustainability] until this stage, it is now really time to get moving. Because even if you don't want to, it becomes a compliance issue. ”

Andreas Rasche

Full Time MBA Professor and Associate Dean

2. SUPPLY CHAIN CHANGES

Companies must assess supply chains due to rising regulation and oversight. To show sustainability, they evaluate the entire product life cycle, ensuring eco-friendly raw materials, processes, and energy use. Meeting disclosure requirements involves proactive supply chain management, gathering data from suppliers on environmental impact.

“Nowadays, to meet all disclosure requirements, companies will have to proactively manage their supply chains,” says Ivan Sokolov.

3. LIFE CYCLE ASSESSMENTS

Growing sustainability focus drives the rise of 'Life Cycle Assessments' (LCAs) – offering detailed product life cycle data, enhancing transparency. Startups like Color Sensing use QR codes to provide sustainability info on packaged goods. LCAs have boomed in 2023, becoming a norm for businesses with physical products.

“Soon it will no longer be niche, but rather with every business,” Ivan Sokolov.

“Nowadays, to meet all disclosure requirements, companies will have to proactively manage their supply chains.”

Ivan Sokolov

Senior Sustainability Manager at Ascendis Pharma, Full-time MBA, Class of 2020

4. COLLABORATIONS BETWEEN STARTUPS AND CORPORATES

Startups like Color Sensing drive green solutions for a greener economy. McKinsey proposes 200-300 green 'decacorns' by 2030 for sustainability goals. Scaling up startups is tough due to limited resources. Collaborations with multinational corporations will rise to overcome this, benefiting both parties. Entrepreneurs gain support, and large companies enter the sustainability market.

“Entrepreneurs will indeed be a backbone of this green transition,” says Andreas Rasche.

5. INCREASED PRESSURE FROM CONSUMERS AND INVESTORS

Regulation and stakeholders drive sustainability in businesses. Consumers expect ethical practices, with a significant rise in vegans linked to climate concerns. Investors favor sustainable practices to reduce risks and adapt to changes.

“Investors press heavily, and they don’t do this for ethical reasons,” explains Andreas Rasche.

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