Predictions about what to expect in 2024 for ESG and climate are everywhere. Brian Matt’s weekly NYSE ESG Top 5 published their “first ever ‘meta-study’ of the 2024 outlooks from key sources” and found these Top 5 most common items:
1 – Expansion of focus on biodiversity / natural capital
2 – Transition finance / focused debt financing of transition
3 – Increasing breadth of greenwashing claims / spread of “greenhushing”
T4 – Preparation for assurance on ESG data
T4 – Extreme weather impacts and insurer retrenchment
Which leads to the question of what should you do about such predictions, if anything? Looking into the future is more art than science but that doesn’t mean that predictions are devoid of value. Here are my tips for how to best use this information:
- Evaluate the source for credibility and applicability to your company/industry. ESG predictions come from everywhere – not all sources are relevant, nor are they all from credible sources. Before taking action/making plans for any ESG predictions, ensure they are worth it. Keep in mind that some predictions may be relevant to your supply chain – such as scope 3 emissions and human rights in mining – rather than your operations directly.
- Determine if credible/relevant predictions are missing from your ESG materiality assessment and/or risk register. Most 2024 ESG predictions are continuations of 2023 actions or trends rather than being altogether new. Either way, your ESG materiality assessment and/or risk register may need updating. For predictions that are not already reflected, assess whether they should be added. Again, predictions impacting your supply chain may not be obviously applicable – be careful and thoughtful here.
- Review the updated materiality assessment and/or risk register throughout the year. An annual review cycle is common, but given how quickly the ESG landscape is evolving, a semi-annual or quarterly review may be beneficial. Remember, reviews not only identify what matters (if any) to add or remove, but also whether the priority or magnitude of any issues should change.
Navigating the landscape of ESG and climate predictions for 2024 means using a discerning eye. Companies should include them in their internal review cycle, recognizing that the evolving ESG landscape requires monitoring of a wider range of information sources/types. Many predictions won’t materialize, but getting ahead of any meaningful trend clearly has business benefits.
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