Help us identify the corporate sustainability megatrends!
Keeping up with the fast-moving corporate sustainability agenda is not easy, and many businesses struggle to determine where sustainability efforts should be concentrated.
To help companies navigate the changing corporate sustainability landscape and separate short-lived fads from the fundamental developments, last year our team developed a list of corporate sustainability megatrends. We identified six trends that take inspiration from our client work, as well as the research and networks that we lean on. They have been used in conversations with companies as inspiration for product design, for board presentations, and as a pressure test of our clients’ sustainability strategies. You will find the trends described further down this page.
However, we believe that we’ve only really laid the groundwork here, and would now like to invite more sustainability professionals to be part of our megatrends co-creation. We’re eager to get your input on the six megatrends and challenge our thinking. Are they the right trends? Are we missing some crucial developments? Are the descriptions and subtrends accurate?
Check out how you can get involved below or email us directly at megatrends@nordicsustainability.com.
Do you want to co-create with us?
Corporate sustainability megatrends
Megatrend 1: Climate change
Climate change is felt globally as droughts, floods, heat waves (unfortunately this list goes on) increase in number and severity. Growing impacts will result in growing political and market pressure to demonstrate strong action on climate, both in terms of reducing greenhouse gas emissions and in adaptation to the risk to assets, supply chains and business models that follows with climate change.
Subtrends:
Science-based approach across value chain: climate profile of products will be assessed on the associated greenhouse gas emissions over full life cycle of product.
Rising cost of CO2 emissions: a growing number of CO2 pricing schemes increase prices for all raw materials based on oil or energy intensive processes.
Growing focus on climate risks and adaptation: better assessment of climate related risk makes it visible to companies and investors how their assets are exposed to the effects of climate change.
Megatrend 2: Biodiversity
The negative impact of human activity on ecosystems is increasingly clear, not just through the extinction of species, but also in terms of loss of livelihoods from e.g., fishing, forestry and farming. Companies will face tougher requirements to report on how their activities and products impact ecosystems, and the pressure to reduce harm and restore past damage will grow.
Subtrends:
Increased expectation for biodiversity-related data disclosure: biodiversity-related data disclosure is likely to mature in the coming years and stakeholders are likely to request fuller disclosure from companies of the impact on biodiversity from operations as well as products.
Biodiversity responsibility: showing responsibility for protecting and restoring biodiversity along full value chain is a growing trend with companies leading on sustainability.
Megatrend 3: Resource scarcity
A number of raw materials are under pressure due to increasing scarcity which is driven by reliance on depletable resources (e.g. virgin metals and fossil-based materials). Renewable resources (notably bio-based materials and recycled/secondary materials) are viable alternatives but are still not produced at the required volumes. As a result, increased raw material price pressure and volatility are expected for the coming years.
Subtrends:
Competition for replacement of oil-based raw materials: companies are looking for “non-fossil” alternatives to oil. This includes not just biobased which is a scarce resource, but also chemical recycling and raw materials based in CCU (Carbon Capture and Usage). However, demand is likely to outstrip supply in short to medium term.
Circular economy – own operations: rising prices on raw materials make more companies invest in circular economy initiatives within their operations. Most companies have so far only looked at packaging materials, but the product itself is next.
Circular economy – markets: B2B customers in many sectors share the ambition of becoming more circular businesses but often struggle expanding initiatives beyond packaging or operational waste. Enabling circularity with B2B customers is an untapped opportunity in many sectors.
Megatrend 4: Legislation
With a sweeping range of legislation in areas from chemicals to circularity, the European Union has demonstrated that legislators are ready to put pressure on companies to become more sustainable. Expansion of responsibility to the value chain and more extensive reporting and regulation on environmental issues is the new order. Other regions are expected to follow, including USA and China, two regions where climate ambitions are growing substantially.
Subtrends:
Harmful substances: EU plans to move from risk based to hazard based assessments of chemicals, potentially limiting the use of a number of substances. Stronger regulation and definition of what constitutes essential use.
Stronger human rights due diligence: EU is working towards mandatory Human Rights due diligence in full value chain (The European Due Diligence Act).
Transparency: The introduction of the Corporate Sustainability Reporting Directive (CSRD) is expected to raise requirements for transparency/accountability in non-financial accounting and broaden the scope of companies that are required to report.
Megatrend 5: Sustainability reporting
Companies are facing increasing pressure to report systematically and transparently on their sustainability impact – good performance in one area doesn’t excuse harm in another. Expect sustainability reporting requirements to become just as rigorous – and time consuming – as financial reporting.
Subtrends:
Impact measured across full portfolio: Neglecting parts of the portfolio puts a company at risk of not knowing the full picture, a potential risk in the future with developing regulation.
Lifecycle perspective: Sustainability of a product/company is increasingly being estimated in a lifecycle/full value chain perspective.
Megatrend 6: Corporate social justice
Discussion on climate justice, Black Lives Matter, MeToo and other recent progressive social movements, illustrates growing stakeholder expectations for companies to actively demonstrate that they are taking a stand. Trend impacts consumer brands first and foremost but can also affect the ability to attract and retain talent.
Subtrends:
Broader scope of corporate social responsibility: the scope for corporate social responsibility is extending to cover not just direct employees but also, to an extent, their families, suppliers’/customers’ employees and, communities in which a business operates.
Companies taking a stand: Companies are increasingly expected to publicly take a stand on a variety of sensitive social issues e.g., LBGTQ rights, racism, etc.