Explore the urgent need for carbon footprint disclosure and decarbonization in the built environment. Discover how Environmental Product Declarations (EPDs) and industry collaboration can address embodied carbon, close data gaps, and drive sustainable progress toward 2030 climate goals.

Too Little, Too Slow - Accelerating Carbon Footprint Disclosure and Decarbonisation in the Built Environment

Written by 
Jonas Bengtsson, Global Director of Impact​, Lifecycle analysis, Decarbonisation

Accelerating Carbon Footprint Disclosure and Decarbonisation in the Built Environment

Transitioning to a low carbon future is critical for tackling climate change. The built environment, responsible for 39% of energy-related emissions and 11% of material and construction emissions, is crucial for decarbonisation.

The OECD forecasts that global demand for building products will more than double by 2060, driven by emerging economies and rising populations, making it crucial to advance innovations that reduce emissions in the building sector.

Sustainability in the built environment encompasses emissions across the entire building lifecycle, from raw material manufacturing to end-of-life stages. Environmental Product Declarations (EPDs) measure embodied carbon and environmental impacts across a product’s lifecycle, ensuring compliance with sustainability ratings like Green Star.

Decarbonising buildings and infrastructure, particularly in addressing embodied emissions, is a complex challenge that demands extensive collaboration and informed decision-making. Access to accurate and shared data is critical for making impactful choices. In response, there has been a growing focus on embodied and lifecycle carbon emissions in building products, with EPDs emerging as a key tool for providing this data.

Early adopters and pioneers like Holcim, Bluescope, InfraBuild, Iplex, Vinidex, the Forest and Wood Products Australia, to mention a few have been instrumental in driving the adoption of EPDs in Australia and New Zealand. These industry leaders have demonstrated the benefits of transparency, setting a strong example for others to follow in reporting verified environmental data and embodied carbon.

Despite the increased use of EPDs, especially with sustainable procurement standards and carbon disclosure regulations, a significant data gap persists. In Australia and New Zealand, for instance, only 300 EPDs from 100 organisations are registered, including some major product suppliers, but representing just a small fraction of the products and organisations in the market.

This article examines the barriers to widespread carbon footprint disclosure and offers a practical roadmap to overcome these challenges.

We recognise both the urgency and the scale of the task ahead:  we must bring thousands of suppliers and tens of thousands of products into alignment within a very short time frame to meet our decarbonisation goals by 2030. 

Achieving this will require the collective efforts of key stakeholders across the industry.

With this in mind, we propose a way forward that can accelerate progress and enable us to meet this critical challenge together.

Section 1: There are notable barriers to producing Environmental Product

Although EPDs are the gold standard for product transparency, several challenges impede their widespread adoption:

Time and Budget: Producing an EPD requires time and money. The typical process spans six to nine months. The financial commitment, often reaching tens of thousands of dollars, combined with the six to nine months required for EPD development, deters smaller companies from beginning the process.

Capacity and Expertise: There’s a scarcity of LCA experts, consultants, and verifiers with the skills needed to analyse environmental data compliant with EN15804, leading to long waiting times. For smaller organisations in particular, the data collection and EPD development process is seen as complex and potentially overwhelming.

Complexity: Organisations with extensive product lines struggle with the time and resources needed to produce and update EPDs, especially when product mixes change frequently.

There has been progress to address these challenges, through efficiencies, automation and self-service tools, but the barriers are still significant.

Section 2: The window for the construction industry to reduce carbon and mitigate climate change is closing rapidly

Expanding carbon footprint disclosure is not just critical; it is urgently required to meet our global and national climate goals.

Our current methods are proving too slow and cumbersome to match the pace of change required. Our approach to carbon footprint disclosure must be streamlined to help achieve the required decarbonisation of the built environment.

While an EPD is comprehensive, this often exceeds the immediate needs of most users, who are looking for reliable and comparable carbon footprint information. Data over-production can deter organisations from starting the process, due to significant time, budget, and resource investments.

We see the urgent need to remove perceived barriers for smaller organisations to enter the carbon transparency space without waiting for full EPD certification.

By expanding access to more EPD services and encouraging government funding programs, the process can be accelerated without compromising data integrity.

Expanding the number of qualified consultants and verifiers could help drive down the cost and time of EPD development.

Section 3: Proposing a tiered system towards carbon footprint disclosures

Decades of experience in the built environment sector show limited options for organisations starting their journey toward transparency and carbon footprint disclosure. 

The journey must be broken down into manageable steps.

We recommend introducing a tiered system, allowing organisations to gradually develop and refine their carbon footprint disclosures, making the process more accessible and manageable. No matter if they’re just starting out or have already published EPDs, the tiered system can make the pathway towards carbon footprint disclosures more accessible for all types of organisations.

Potential benefits range from reduced costs and resource allocation by adopting a gradual approach to carbon footprint disclosure, to rewarding organisations to benchmark their products and identify areas to reduce emissions from day one.

Figure 1: Tiered system towards carbon footprint disclosures, with year-on-year reduction reporting.

The tiered system offers a gradual progression from generic LCA adaptation to full EPD development and certification, making carbon footprint disclosure accessible for all. The different graduation stages for manufacturers and suppliers:

1. Generic LCA adaptation: this stage sees an organisation adapting LCA data already published for their product as a starting point to give provide a first estimate of their products’ carbon footprints. This will provide a high-level understanding of the products' impact and establish the context for more detailed assessments.

The key is to confirming that the generic dataset is based on comparable manufacturing techniques and technology, to ensure the footprint and carbon hotspots are reasonably representative.

2. Screening and scoping carbon LCA: an organisation can incorporate specific data on key inputs such as the quantity of raw materials, energy use and transport distances to refine its carbon footprint estimation.

The adaptation could be limited to adapting the electricity grid-mix used and adjusting the ingredient quantities used.

3. Full Product Carbon Footprint: this stage sees an organisation moving to a comprehensive carbon footprint that’s ISO 14067 compliant. This involves using comprehensive and specific data for modelling the product life cycle, with a focus on production inputs and outputs.

4. Peer reviewed Full Product Carbon Footprint: an organisation ensures their carbon footprint is independently reviewed and verified by an independent expert to provide extra assurance for their customers and stakeholders.

5. EPD development: this is the stage where an organisation develops an EPD that’s verified and meets EN 15804 standards, using detailed data and modelling from previous stages. This is where the assessment is expanded from carbon to full environmental profile (including a broad range of environmental impacts and indicators)

6. Benchmarking and eco-label certification: an organisation can build on their EPD and benchmark its carbon footprint and other environmental impacts against alternative solutions and work towards achieving the ISO 14024 ecolabel certification if the product demonstrates superior environmental performance.

Alternatively, some organisations may start their journey with an ecolabel certification, and complement their credentials with an EPD or carbon footprint.

7. Demonstrate year-on-year product-level carbon reduction: this is arguably the most important aspect, for organisations to demonstrate its year-on-year improvements by reporting progress independent of the stage of disclosure. If there are significant change and improvements, update the product EPD or Product Carbon Footprint disclosure.

To address concerns about potential greenwashing, the tiered system includes stringent peer reviews and third-party verifications, even in the early stages. This ensures that companies beginning the carbon footprint disclosure journey maintain credibility and build trust with stakeholders. The framework prioritises transparency at every step, mitigating the risk of data manipulation for marketing purposes.

The table below provides a summary of the graduation stages and guidelines for carbon footprint disclosure.

The communication examples are illustrative, and we recommend to always adhere to best practice guidance such as The Handbook to help you communicate with confidence, the ACCC’s Making environmental claims - A guide for business and the Commerce Commission New Zealand’s Environmental Claims Guidelines.

Table 1: Graduation stages and guidelines for carbon footprint disclosure. Note, organisation can start their journey at any stage

To make real strides in carbon footprint disclosure and decarbonisation, organisations should follow these straightforward principles:

Keep Pushing for More Transparency: Organisations need to show they're serious about moving forward. For example, start with a generic LCA adaptation, upgrade to a screening carbon LCA within six months. Then, within 12 months, move on to a more detailed carbon LCA. This graduation process provides the stages for continuous improvement for better transparency.

Measure and Show Your Progress: It’s not enough to just collect data, the key is to act on it. Organisations should focus on reducing the embodied carbon in their products and regularly updating their footprints to reflect these improvements.

By sticking to these principles, organisations can make steady, transparent progress in carbon footprint disclosure. This approach not only builds trust but also helps drive the entire industry towards meeting our decarbonisation goals.

It is important to emphasize that the tiered system is designed to provide a scalable entry point for smaller manufacturers or products without established EPDs, without diminishing the importance of full EPDs.

The ultimate goal remains full compliance with international and domestic standards, ensuring transparency and comparability of data. Organisations with verified EPDs and/or certified eco-labels should in our opinion receive the highest recognition.

To dive deeper into carbon footprint disclosure and how Edge can support your organisation’s decarbonization efforts, reach out to Jonas Bengtsson today or get in touch via the Contact Us.

Section 4: Advocating for a more accessible industry pathway

Securing a low-carbon future requires a simple, practical framework that encourages all organisations to understand and publish their carbon footprints.

Our recommended tiered system can deliver competitive and operational benefits, encourage organisations to get on board and increase the availability of reliable and accurate carbon footprint disclosures of products and services in the construction sector.

Aligning graduation stages with industry rating schemes like Green Star and IS Rating Scheme, by awarding credits for responsible product practices, is vital for scaling industry change. Implementing by awarding credits for responsible product practices within industry rating schemes is an approach that has proven itself in the past.

While reducing carbon emissions is the immediate priority, this framework can evolve in the future to incorporate other material areas for the built environment. This includes the demand for circular economy principles, nature preservation and water management.

Our tiered system proposes a pathway to accelerate carbon footprint disclosure across the built environment, focusing on progress over perfection.

To ensure broad-scale adoption and effective implementation, we propose the following actions:

Incentivise Early Progress: Industry rating schemes like Green Star and IS Rating should recognise and reward early-stage carbon disclosure efforts. By offering partial credits for pre-EPD stages, these schemes can drive broader participation and encourage industry-wide change.

Lower Barriers to Entry: Industry bodies and trade associations should support smaller companies by providing tailored training and tools such as the concrete industry’s GCCA tool. This can help them navigate the complexities of carbon footprint disclosure and progress effectively through the tiers.

Enable Sector-wide Collaboration: Manufacturers, designers, contractors, and regulators can adopt the unified framework for carbon transparency. Collaborate on joint initiatives, industry workshops, and shared platforms to ensure consistent standards and practices across the sector.

Promote Continuous Progress: Organisations should commit to continuous improvement, with clear timelines for reducing embodied carbon. Regular updates to disclosures will keep carbon reduction a priority and foster a culture of ongoing progress and sharing progress and best practice.

By adopting this tiered system, the built environment sector can lead by example, setting a global standard for democratising carbon transparency. 

The time to act is now, collectively, we must make carbon transparency the standard across the industry, to unlock meaningful and targeted carbon reductions in a time when we need urgent action and progress.

After all, continuous improvement is central to the tiered approach. Transparency and comparability is great, but only if it ultimately leads to rapidly eliminating life cycle carbon emissions in the built environment.

Whether you're starting with a carbon footprint assessment, aligning with the GHG Protocol, or developing a decarbonisation strategy, Edge Impact can help.

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Appendix: Key Stakeholders and Their Roles in the Carbon Graduation Scheme

The successful implementation of the carbon graduation scheme relies on the active participation and collaboration of various key stakeholders within the built environment sector. Each stakeholder group plays a role in advancing carbon footprint transparency and contributing to the overall sustainability of the industry.

The primary stakeholder categories, their specific roles in the carbon graduation scheme, and the anticipated benefits they can expect from their involvement include:

Building Rating Schemes (NZGBC, GBCA, ISC)  Building rating schemes like Green Star and the IS Rating Scheme will play critical roles in recognising and incentivising early progress on carbon disclosure. They achieve this by awarding credits for pre-EPD stages and other carbon disclosures in their rating systems.

These schemes drive industry-wide change by encouraging broader participation in carbon transparency efforts, ultimately helping to accelerate the shift towards sustainable building practices. We would welcome a shift towards rewarding carbon reductions and continuous improvements over detailed declarations and reporting.

Government and Regulators (ABCB, MBIE, State Department of Planning): Government bodies and regulators are responsible for setting and enforcing standards for carbon disclosure in the built environment. They create incentives for compliance and drive industry-wide adoption of these standards.

Their involvement ensures that national emissions reduction targets are met, industry standards are adhered to, and future policies are robust and forward-looking. Inclusion of embodied carbon standards in the construction code would establish a much needed minimum compliance level.

Product Certification Bodies (incl. GECA, Eco Choice Aotearoa, Global GreenTag, C2C, Steel Sustainability Australia): Product certification bodies develop and administer certification schemes that are aligned with the tiered carbon disclosure system. They provide third-party verification of carbon disclosures to ensure accuracy and credibility.

These bodies help fill market gaps with new certification pathways, improve overall industry standards, and remain competitive in the evolving sustainability landscape. Product certification bodies play an essential role in providing trust in manufacturers claims.

EPD Programme Operators (EPD Australasia, Global GreenTag, International EPD System): EPD programme operators provide the necessary governance, rigour, and certification for Environmental Product Declarations (EPDs). They ensure that the data is accurate, reliable, and adheres to international standards.

These operators help build trust in carbon disclosures, ensuring that they are comparable and credible, which is essential for widespread industry adoption and compliance. Collaboration on central solutions like the ECO Platform will help simplify and centralise for all data providers and users.

Building Product Manufacturers (manufacturers without EPDs): These manufacturers can begin their journey towards carbon transparency by participating in the tiered disclosure system. This will allow them to gradually build their capabilities in carbon footprint reporting and disclosure.

By engaging in this process, these manufacturers will future-proof their operations, increase competitiveness in a market that increasingly values sustainability, and unlock potential cost savings through efficiency improvements.

Industry Bodies and Associations (BPIC & members, MECLA, ALCAS, LCANZ, MBA): Industry bodies and associations promote the adoption of the tiered system among their members, providing necessary training, tools, and resources to facilitate this transition. Existing examples include the GCCA tool for the cement and concrete industry.

By leading this charge, they enhance industry leadership, drive widespread adoption of carbon footprint disclosure practices, and help future-proof their member organisations against market and regulatory shifts.

Architects and Designers (AECOM, Warren and Mahoney, FJMT Studio, Cox Architecture, Hassell): Architects and designers should integrate carbon data into their design processes, using it to enhance the sustainability of their projects and inform material selection decisions.

This integration will lead to improved project outcomes, higher client satisfaction, and a stronger competitive edge by meeting the growing demand for low-carbon materials.

Contractors (Lendlease, Multiplex, Fletcher Construction, Hutchinson Builders, Downer): Contractors play a critical role by prioritising the use of low-carbon products and materials in their construction projects, ensuring that sustainability is a key consideration from the outset.

By doing so, contractors will meet sustainability targets, enhance their project credentials, and future-proof their businesses against impending regulatory changes.

Consultancies: (Edge Impact, Beca, Tonkin + Taylor, Aurecon, Arup): Consultancies provide the expertise needed to guide companies through the carbon graduation scheme, offering services in carbon footprint analysis and lifecycle assessments.

This allows consultancies to expand their service offerings, strengthen relationships with clients by helping them achieve their sustainability goals, and stay competitive in an increasingly eco-conscious market.

Asset Owners: (Dexus, Mirvac, Kiwi Property, Stockland, GPT Group): Asset owners demand transparency from their suppliers and integrate verified carbon data into their asset management and development practices.

This approach will increase the value of their assets, future-proof their investments, and lead to reduced long-term costs through improved sustainability performance.

Table 2: Stakeholders, Roles, and Benefits

The active participation of these stakeholders is crucial for the success of the carbon graduation scheme. By understanding their roles and the benefits they stand to gain, these groups can contribute meaningfully to the advancement of carbon transparency in the built environment, ultimately leading

Case Study: The Insurance Industry's Slow Response to Climate Change

The insurance industry offers a cautionary tale about the dangers of inaction in the face of emerging risks. In the late 20th and early 21st centuries, despite mounting evidence of the impacts of climate change, many insurers were slow to adapt their risk models. They continued to rely on historical data that failed to account for the increasing frequency and severity of climate-related disasters, such as hurricanes, floods, and wildfires.

This slow response had severe consequences. As climate-related disasters became more frequent, insurers were hit with claims far exceeding their expectations, leading to massive financial losses. Some companies faced bankruptcy, while others were forced to withdraw from high-risk markets, leaving homeowners and businesses without coverage. The industry's failure to adequately prepare for and respond to these risks also led to significant reputational damage, with customers losing trust in their insurers.

The lesson for the built environment is clear: failing to act on carbon footprint disclosure and decarbonisation carries similar risks. Companies that delay may face financial penalties, reputational damage, and a loss of competitiveness as the industry increasingly prioritises sustainability. Just as the insurance industry suffered from its reluctance to adapt, so too could the built environment sector if it does not take immediate, decisive action.

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In this article, we've put together a summary of some key reporting and compliance changes in train for 2024.

What Australian Companies Need to Prepare for in 2024

In 2024, we expect to see a decisive shift in perception and action on ESG.

While 2023 brought ESG into the media spotlight, its position on the corporate agenda is going to be even more prominent in the year to come.

With mandatory climate disclosures being introduced, a growing number of companies will be required to comply with these frameworks and the comprehensive reporting requirements they bring.

This signals a new era for ESG, a lasting and integral aspect of corporate strategies.

The Workplace Gender Equality Agency will publish the gender pay gaps for every Australian employer with 100 or more employees on 27 February 2024.

The change is the result of amendments to the Workplace Gender Equality Act 2012 passed by the Federal Parliament in March 2023.

We have released a Discussion Paper titled, 'How to Thrive in the New Era of ESG Disclosure" to help organisations understand and navigate the complexities of the future ESG disclosure landscape. Download the Discussion Paper today

In May 2023, the Attorney-General's Department released results of the statutory review of the Australian Modern Slavery Act 2018. The report proposes 30 changes that, if implemented, would significantly enhance Australia's anti-modern slavery efforts, imposing more rigorous due diligence and reporting obligations on certain companies.

In November 2023, Attorney-General Mark Dreyfus KC MP introduced legislation to establish a Commonwealth Anti-slavery Commissioner. Public consultation on the responsibilities for this role is underway, with a full Government response to the review expected once this process is complete.

With progress already being made in the EU and other jurisdictions towards mandatory human rights due diligence, Australian businesses should prepare for a Commonwealth Act that seeks alignment with these standards.

Mandatory climate-related financial disclosures for Australian companies

In October 2023, the Australian Accounting Standards Board (AASB) released core requirements for Australian Sustainability Reporting Standards, outlining what’s to come for mandatory climate-related financial disclosures.

This leverages the framework launched by the International Sustainability Standards Board and the associated IFRS S1 and IFSR S2 disclosures.

Under the proposal, companies will need to disclose climate-related information as part of their general financial reporting, starting as early as July 2024 for some companies.

Joe Longo, Australian Security & Investments Commission chair

This shift in disclosure requirements is the biggest change to corporate reporting in a generation.

The Federal Government’s ascension of the Nature Repair Market Bill in December 2023 is a strong indicator that nature is well and truly on the agenda.

While reporting nature impacts and dependencies is not yet mandatory, all commentary points towards a requirement to disclose nature related risks and opportunities in the immediate future.

We can look to frameworks such as the one developed by the Taskforce on Nature Related Financial Disclosures (TNFD) for an idea of how these standards will take shape.

Edge Impact is currently supporting clients at various stages of their nature journeys, most commonly starting with a bespoke nature-action roadmap before progressing to support client alignment with the TNFD framework.

Planning for these developments and requirements over the next 12 months will make a significant difference to impacts and opportunities for your business.

Taskforce on Nature Related Financial Disclosures (TNFD)

To help you prepare, download our Discussion Paper, ‘How to Thrive in the New Era of ESG Disclosure.’

The landscape of sustainability and ESG is rapidly evolving from a voluntary to a mandatory realm, increasing the stakes for businesses. In this changing environment, we've compiled a short playbook, drawing insights from our team of experts

The 2024 Sustainability Playbook:  
How to turn sustainability challenges into business opportunities

Written by 
Jonas Bengtsson, Co-Founder and CEO

The 2024 Sustainability Playbook: How to turn sustainability challenges into business opportunities

2024 is shaping up to be a year like no other. 

From the tightening grip of regulatory frameworks to the transformative potential of artificial intelligence, we are entering a whole new landscape for corporate ESG that will offer up both obstacles to progress and possibilities of exponential value.

In this changing environment, we've compiled a short playbook, drawing insights from our team of experts. Consider it your compass through the intricate maze of sustainability practices. Get ready to delve into the depths of what it truly means to be sustainable in 2024 – where every decision, every innovation, and every commitment can leave a lasting impact on our world.  

1. Mandatory Disclosure: Navigating the New Landscape of Reporting Deadlines

2024 brings a definitive shift in the sustainability landscape, particularly in the realm of mandatory Environmental, Social, and Governance (ESG) reporting. The consolidation under the International Sustainability Standards Board (ISSB) provides a clearer framework for businesses, emphasising the need for preparedness and strategic positioning. 

The EU's Corporate Sustainability Reporting Directive (CSRD), effective since January 2023. It forces certain companies that do business in Europe to publish information on environmental and social matters.  

The Australian Federal Government's 2023 consultation paper on Mandatory Climate-related Financial Disclosure, following New Zealand's lead. This would mean very large entities will be impacted as soon as 2024/2025, with reporting requirements extending to progressively smaller entities over a two-year period. 

California's SB 253 and 261 laws, requiring comprehensive emissions and climate risk disclosures from 2026. 

These changes signal the start of a broader, more rigorous approach to both voluntary and mandatory disclosures in Australia and New Zealand, aligning with a global trend towards integrating financial and non-financial business performance metrics. Initial focus on climate-related risks will soon expand to encompass the full ESG spectrum, covering aspects like biodiversity, gender equality, modern slavery, and social justice.

Evaluate Current Reporting: Assess your organisation's existing capabilities and pinpoint areas for improvement. 

Develop a Compliance Roadmap: Create a strategic plan addressing upcoming mandatory disclosure norms. 

Build Internal Capacity: Enhance understanding of evolving risks and opportunities. 

Anticipate Future Requirements: Stay ahead by considering potential areas for future mandatory disclosures, including environmental and social aspects. 

Set New Standards: Embrace transparent and comprehensive sustainability disclosures to lead in corporate responsibility. 

Download our ESG Disclosure Discussion Paper: How to Thrive in the New Era of ESG Disclosure

2. ESG: Responding to Backlash and Embracing Long-Term Viability 

Despite facing backlash, like Ron DeSantis' anti-ESG legislation in Florida, ESG considerations are a steadfast component of modern business practices. Companies must gear up for data-driven action, course correction, and transparent reporting. 

Globally, ESG integration has become a strategic imperative, ensuring that sustainability and ethical considerations shape business decisions and governance. 

Although 69 percent of companies report fully integrating ESG for value creation, a notable 68 percent of CEOs express concerns about their ESG strategies under close examination. 

In 2024, the emphasis is on improving ESG data quality and disclosure, spurred by regulatory demands for transparent corporate reporting. Trends indicate a shift towards automated software for greenhouse gas management, addressing the increasing need for reliable data and adherence to third-party verification standards. 

Companies are anticipated to invest more in robust ESG data strategies, including the establishment of centralised data management teams, enhancing data quality, and integrating it into performance metrics. This approach aims not just at compliance, but at utilising ESG data for tangible value creation and effective carbon footprint reduction. This year marks a pivotal moment in the evolution of ESG data standards.

Regularly Review ESG Regulations: Stay updated on regulatory changes and their implications for your company’s strategy and reporting. 

Assess Anti-ESG Risks: Understand potential regulatory and stakeholder pressures and their impact on your organization. 

Establish a Centralized ESG Data Team: Consider digital solutions for data management to improve collection and disclosure processes, integrating these systems with your company’s performance management. 

Continuously Refine Your ESG Strategy: Treat sustainability not as a static goal, but as an evolving journey. 2024 might be the ideal year for a comprehensive ESG strategy reassessment, ensuring your approach remains robust and responsive to the dynamic business environment.   

3. Greenwashing: Intensifying Scrutiny of Environmental Claims 

The landscape of ESG practices is increasingly complex, particularly in the U.S. where it intertwines with socio-political debates and financial considerations. Recent years have seen a surge in greenwashing incidents, a trend most notable in Europe and North America, but also in Australia and New Zealand.  

This rise highlights the risks associated with companies making misleading claims about their environmental practices. Both greenwashing, the act of falsely promoting environmental practices, and greenhushing, the underplaying of sustainability goals, have become prevalent and heavily criticised.  

High-profile cases, such as Energy Australia’s misleading carbon offset claims, underscore the issue's severity. Furthermore, companies find themselves in a dilemma, balancing ESG values against potential consumer backlash. 

A notable example is the Bud Light campaign featuring transgender influencer Dylan Mulvaney, which was perceived by some as an ESG-driven decision, leading to significant consumer retribution and a reported 17% decline in Bud Light's U.S. sales in Q3 2023. 

Tips for Navigating Greenwashing Challenges: 

Leverage Opportunities for Authentic Communication: There’s a burgeoning space for organisations that can confidently communicate their sustainability efforts, grounded in a solid foundation of science, strategy, and storytelling. 

Be Proactive in ESG Claim Verification: Regularly scrutinize your company’s ESG and sustainability claims to mitigate risks of greenwashing. Authenticity in your environmental practices is key to maintaining credibility and trust with your stakeholders. 

Check out our Sustainability Communications Checklist for the New Era of Disclosure

4. Technology: The New Frontier in Sustainability 

Advanced technologies like AI, blockchain, and IoT are revolutionising sustainability. They're key to optimising resource use, enhancing supply chain transparency, and enabling efficient material recycling. These technologies are creating efficient, zero-waste systems vital for environmental health. 

The rise of AI, comparable to the personal computer and smartphone revolutions, poses both opportunities and challenges. It's predicted to significantly impact the global economy, but also raises concerns about job displacement and economic stability. In response, regulatory measures like the EU's AI Act are being implemented. 

AI's role in sustainability is multifaceted, from improving satellite imagery for climate action monitoring to integrating into corporate sustainability strategies for better data analysis and reporting. 

Tips for Harnessing Technology in Sustainability: 

Balance Technology and Ethics: Address ethical and environmental risks associated with AI. 

Stay Informed on Regulations: Keep up with regulatory changes impacting technology in sustainability. 

Implement Robust Data Systems: Use advanced data management for accurate sustainability performance monitoring. 

5. Climate Action: A Connected Challenge and Scrutiny of the Voluntary Carbon Market 

The imperative for decarbonisation echoes profound industrial transformations of the past, necessitating a radical overhaul of energy usage, resource management, and our interactions with nature. 

In this critical era, embracing the principles of the circular economy, especially regeneration, is key to reverse the trend of degrading the very eco-systems that sustain life and our way of living. 

This approach forms a vital framework for reducing emissions, minimising waste, and enhancing the restoration of natural systems. Organisations committed to net-zero emissions by 2050, pivoting towards renewable energy sources and sustainable practices, are not just tackling the climate crisis; they're spearheading a transition towards a regenerative, circular economy. 

Reassess Carbon Offsetting Strategies: Carbon offsetting is a contentious issue, with instances of severe mismanagement by carbon project developers and misleading claims about offset validity and credibility. There's a growing shift away from using carbon neutrality through offsetting as a viable strategy. In 2024, it's crucial for organisations to critically evaluate their use of carbon offsets, ensuring their climate action strategies are both credible and effective. 

Check out Navigating Climate Governance: What Every Board Member Should Know and How to Reignite Your Decarbonisation and Circular Economy Strategy 

6. Nature: A Critical Focus Alongside Climate Action 

The urgency of addressing nature-related issues is now on par with climate action, offering businesses significant opportunities to manage risks and positively impact both nature and society. 

However, many companies, investors, and lenders still struggle to adequately incorporate nature-related risks and opportunities into their decision-making processes. This gap is where the Taskforce on Nature Related Financial Disclosures (TNFD) becomes crucial. 

The TNFD framework provides a structured approach for businesses to identify, assess, and disclose nature-related issues, promoting early action across all sectors.  

This framework aims to integrate nature-related disclosures similarly to how the Taskforce on Climate-related Financial Disclosures (TCFD) revolutionised climate-related reporting. 

The TNFD also advises companies to align with the Science-Based Targets for Nature (SBTN) for setting targets on nature impacts. However, the interaction between these two frameworks can be complex. 

Tips for Embracing Nature-Focused Frameworks: 

Tailor Your Approach: As new frameworks emerge, remember there's no universal solution. Develop a strategy that aligns with the frameworks most relevant to your business context. 

Check out TNFD is here: What does it mean for your business, how do you get started, and how does this relate to SBTN.

7. Circular Economy: Evolving from Ideal to Imperative 

Embracing a circular economy, where producers fully commit to zero waste, closed-loop systems, and net-zero greenhouse gas emissions, is rapidly shifting from a lofty goal to standard business practice. 

Today's businesses are not only expected to bolster resilience against climate change but also to actively participate in resource loop closure and the regeneration of natural systems. 

Integrating circular economy principles into core business strategies offers a multitude of benefits. This approach paves the way for innovation, significantly reduces waste and operating costs, and enhances brand reputation. Companies' adept in this area are redefining their market presence, much like early adopters in the digital economy who transformed their sectors through groundbreaking innovation and strategic foresight. 

Notable examples include firms that have developed innovative, sustainable products or services, thereby achieving market differentiation and growth. These pioneers are setting benchmarks in sustainable practices, mirroring the transformative impact seen during the digital revolution. 

Tips for Embracing Circular Economy Practices: 

Life Cycle Assessment: Conduct a thorough Life Cycle Assessment (LCA) to pinpoint potential improvements in sustainability, embodied carbon and circularity. 

Verify Sustainability Claims: Strengthen credibility through ISO14025 and/or EN15804 compliant Environmental Product Declarations (EPD), Type 1 eco-labels, or independent third-party reviews. 

Articles by Jonas Bengtsson