Sustainability has moved far beyond the buzzy trend phase; it’s now a core part of doing business across industries. The surprising success of the COP28 climate talks in Dubai, with its agreement to transition away from fossil fuels signed by fossil-fuel producing countries, has pushed sustainability to the top of the business and news agenda.
This landmark deal rides the waves of extreme weather and climate change, with Los Angeles, Miami, and Phoenix hiring Chief Heat Officers as America’s cities bake.
The effects of climate change are self-evident, and consumers are focused on what brands are doing about it.
As customer expectations of brands rise, and their buying habits are increasingly influenced by a business’s efforts to protect the planet and people, what will rise to the top for sustainability trends in 2024?
The climate crisis is taking a toll on people, the planet, and economy.
Without adaption to environmental changes, an estimated 4.4% of the world’s gross domestic product (GDP) could be lost every year, according to S&P Global research.
Corporate value chains are so interdependent that most can’t escape the financial impacts of climate change, the firm said.
Another study found that the impacts of extreme climate events cost the US an estimated $150 billion each year.
Sustainability and fashion appear to be on opposing catwalks destined for collision. Fashion is a $2.5 trillion industry, producing 10% of global carbon emissions, 20% of global wastewater, and vast biodiversity loss. Consumers are demanding change, forcing sustainability in fashion as a requirement, not a trend.
In 2024, corporate sustainability requirements will make it a lot harder for brands to greenwash their activities.
Sustainability now sits alongside financials, and everything is audited.
In the US, the Securities and Exchange Commission is standardizing climate-related disclosures for investors, in an attempt to provide greater transparency – and to stop businesses from hiding the true impact of their operations. This even includes Scope 3 emissions, those caused by activities within the supply chain that the company isn’t directly responsible for.
And in the UK, since May, financial watchdog the Financial Conduct Authority is clamping down on references to sustainability by fund managers, to control the use of the term in their fund descriptions.
It’s getting increasingly difficult for businesses to say one thing while doing another. The rise in disclosure requirements may even be causing a reduction in sustainability messaging; research by Creative X showed a decrease in ads that mention sustainability since the start of 2023.
The way in which brands communicate their commitment to sustainability is changing. Legislation forces them to be honest in their reporting, and audiences (especially customers) increasingly expect them to be honest in their communications, making sustainable marketing a top trend.
If, say, you’re going to plant a tree for every order, customers now expect you to show that the trees were planted. If you’re switching to renewable energy, they want to see the solar panels in use. Unfulfilled promises will no longer cut it.
According to the European Commission, 53% of green claims by businesses are based on vague, misleading, or unverified data. Forty percent of claims aren’t supported by evidence.
To that end, the EU’s Green Claims Directive aims to protect consumers from false business claims about environmental benefits by requiring companies to substantiate them.
In the US, the Federal Trade Commission is expected to update its rules for green marketing claims — the first time the rules have been updated in 10 years.
It’s fine for brands to admit that some things need improvement. UK organic retailer Riverford has built an entire brand identity from being honest about its activities. Patagonia is legendary for the honesty of its communications, including an ad asking people not to buy its clothes.
But just talking about sustainability doesn’t mean customers will buy in. It has to be believed, and backed up by action. In 2023 a fast-fashion brand had the highest share of ESG-related conversations on social media, at 33.2%, but the lowest customer net sentiment relating to ESG, at -87%. Burberry, with just 7.4% of the social conversations, scored 74.6% of net sentiment. Burberry’s actions are clearly more strongly believed by its customers than Primark.
The lesson? Brands that don’t change how they communicate won’t only be left behind, but also shown up by smarter, more honest competitors.
More CPG brands are making carbon neutrality claims as global warming concerns grow, but environmental labels are risky if not backed by action.
Returns are changing, due in part to an economic imperative, but also because of an increased awareness among customers of their enormous environmental impact. As brands double down on the returns problem, this will be trend to watch on the sustainability front in 2024.
In the US, the cost of returns doubled in two years, from $428 billion in 2020 to $816 billion in 2022, according to Statista. Across the world, rising prices and ubiquitous cost-of-living crises means free returns are still an effective means of persuading people to buy.
But the environmental impact is huge, from the doubling of delivery mileage to the waste caused by items that are uneconomical to repackage and resell – 4.3 million kg in 2022 in the US alone, according to Optoro.
Brands that take sustainability seriously need to minimize returns – and helping customers make the right choice in the first place will be a key part of any strategy.
The goal of getting it right the first time is helping drive a trend towards in-person shopping. Rising delivery costs are another factor. Augmented reality helps customers try on clothing in virtual fitting rooms, so they know it fits and looks right before buying.
And return fees are returning: even Amazon charges $1 to drop parcels at a UPS store if there’s an Amazon Fresh or Whole Foods closer. In 2024 expect to see more charges and more encouragement to buy once, buy right.
Customers expect brands and businesses to help them do the right thing. So where better to start than with the user experience?
Improving the efficiency and reducing the impact of the way customers interact with your business helps them without them having to make any decisions.
Forward-thinking businesses are using their digital platforms and properties to deliver a more sustainable experience.
Something as simple as designing a site to operate in dark mode, to reduce the number of illuminated pixels that are illuminated, cuts energy use.
Audiences like it, too – research by Android Authority suggests that over 80% of people use dark mode all the time.
Search engine optimization (SEO) also can help boost sustainability by improving website efficiency. Making it easier for people to find information reduces the amount of energy a website consumes.
Ultimately, SEO can help reduce the combined carbon footprint of internet and communications infrastructure, which is estimated to total about 3.7% of global greenhouse gas emissions.
The internet uses more electricity each year than the UK. Sustainable websites and SEO can lower the environmental impact.
Along with all the excitement about generative AI last year, there was growing anxiety among workers that automation will make them obsolete. The fear isn’t unwarranted: Goldman Sachs economists predict that the technology could impact 300 million jobs around the world.
In 2024, expect growing calls for regulations and ethical AI to protect workers and society at large. This sustainability trend will play into corporate ESG efforts, as pressure increases for companies to reduce risks to workers and protect individual privacy.
The European Union’s Artificial Intelligence Act proposes a regulatory framework for AI by categorizing systems according to their risk level and establishing corresponding obligations.
Calls to manage the environmental risks of generative AI also will grow this year. The technology has turned out to be a thirsty beast with overworked data centers heating up with all the LLM training and output. As awareness of this problem to increase, consumers and regulators will put pressure on companies to do something about it.
At the same time, some experts are hopeful AI can support sustainability goals.
“For example, it could unlock new ways of tracking and understanding environmental and social issues, based largely on the technology’s ability to process large amounts of data, and it could lower the cost hurdle for companies tracking and reporting sustainability issues,” researchers said in a S&P Global report.
From 2020 to early 2023, the El Niño Southern Oscillation (ENSO) was in the cooler La Niña state. Among other things, this unusually long cooler period masked some of the effects of global emissions.
But ENSO has now flipped into its El Niño state, which makes it likely 2024 will be the hottest year ever. If nothing else, this will ensure sustainability and climate change stay in the headlines. But at what cost? Prepare for bad weather.
