Much has been made of 2023 being recognised officially as the hottest year on record. But it’s worth considering that since the 1980s, each decade has been warmer than the previous and with the past nine years the warmest on record1.
If we look at the number of flights during 2023, we can see that this number grew from 16.9 million during the pandemic to 34.4 million last year, meaning we may well be on the way to reaching the peak of air travel in 2019 at 38.9 million flights2. So, when I reflect on 2023 and look ahead in 2024, the thought in my mind is how much hotter, or severe and frequent will climate impacts have to be, before the ‘frog in the boiling water’ actually jumps?
Looking forwards, there are five key influencing factors that may push us over that tipping point.
Persistent unpredictability will keep the climate crisis in focus, prompting action
2024 is already heading towards being the hottest year on record. The current intense episode of the El Niño climate pattern is approaching its peak, and the last occurrence led to record warmth in 2016. There is the real possibility that, for the first time annually, average planetary temperatures could exceed 1.5 degrees above preindustrial levels3.
While we can’t directly link weather and severe climate impacts to behaviour change, I anticipate that the heightened tangible effects of climate change, combined with increased media coverage, will certainly lead more companies to recognise the business case to act. Our 2023 Sustainable Business Trends report found that 63% of executives agree that there is a business case for sustainability, tripling since 20224.
Greenwashing claims will intensify focus and contribute to organisations adopting sustainable transition plans
2023 saw rising scrutiny of corporate claims. Our research last year showed only 17% of executives believe consumers are concerned by the practice of greenwashing when in contrast, 33% of global consumers, especially Gen Z, believe organisations and brands are greenwashing their sustainability initiatives5.
New regulations springing up to hold organisations to account will also have an impact on corporate claims. For example, the EU Green Claims Directive looks set to ban unsubstantiated green claims on consumer products. This is likely to have wider repercussions and will impact multiple sectors, including food and beverages, travel, fashion, and technology. The ban aims to eliminate generic environmental claims from businesses to consumers around the sustainability of the products they buy, unless they are backed by “proof of recognised excellent environmental performance”6. This includes for example, compliance with official regulations or recognised labelling schemes.
Other examples include the UK’s Financial Conduct Authority (FCA) anti-greenwashing rules7, which all FCA-authorised firms are required to comply with by May 2024, and the EU’s deforestation regulation which expects businesses to ensure “goods made from seven commodities: (i.e., cattle, cocoa, coffee, oil palm, rubber, soya, and wood) are not derived from recent (post 31st December 2020) deforestation, forest degradation or breaches of local environmental and social laws”8.
Growing regulatory and consumer scrutiny, coupled with a heightened appreciation of the business rationale for sustainability, will prompt businesses to shift their position from using sustainability as a marketing stance to viewing it as a transformation challenge.
This discourse should evolve beyond mere terminology to actively addressing the tangible issue of atmospheric carbon. After establishing clear definitions and frameworks, organisations should transition to taking material actions and fostering greater collaboration.
Climate technology will be necessary, but organisations must use all available tools to decarbonise
Climate technology will also play a fundamental role in helping businesses reach their sustainability goals. Three-quarters of executives consider climate tech necessary for their organisation9 however, the challenge will be the widespread implementation of the technology due to the green premium attached to these technologies.
Having said that, 76% of executives feel that the benefits of sustainability initiatives outweigh the costs, compared to 47% last year10, which is a promising sign. I expect to see a gradual increase in investment, particularly into clean energy technologies such as carbon capture and low-carbon hydrogen. Policy changes may also spur investment, namely the EU’s Renewable Energy Directive which has increased its renewable energy targets from 32% to 42.5% by 2030.
What goes without saying is climate technology isn’t a panacea. While it may guide us toward a low-carbon economy in the long term, immediate action is required to reduce the concentration of carbon dioxide in the atmosphere, whether through stricter regulations or reducing carbon output.
Maximising on the potential of generative AI
2023 was undoubtedly the year of generative AI. Our recent research on investment priorities for 2024 found that nearly all executives (96%) in our survey cited generative AI as a hot topic of discussion in their respective boardrooms, making it probably the fastest new technology11.
This year, I expect to see the integration of generative AI within environmental, social, and governance (ESG) initiatives come to the fore. According to our Sustainable Business Trends report, 59% of executives believe that generative AI will play a key role in their organisation’s sustainability transformation efforts12.
This report highlights some of the ways that organisations have already started incorporating generative AI into their sustainability strategies across operations, sales and marketing, logistics, design, and data. For example, improved forecast demand reduces waste while improved algorithms enable the optimisation of transportation routes considering multiple dimensions such as volume, vessel capacity and geography to determine the most efficient routes.
Similar to any emerging technology, there is an elevated risk of environmental impact. We found that more than three quarters of organisations are conscious of the environmental concerns around generative AI13. Despite this, I believe there is a crucial balance to strike – leveraging the transformative benefits of AI while also managing its carbon footprint. We will have to wait and see how the impacts of generative AI play out this year as further developments and regulations around the technology unfold.
Upcoming elections around the world will make policy decisions crucial this year
Stringent regulations like the Corporate Sustainability Reporting Directive (CSRD) in the EU and proposed climate-related disclosures by the Securities and Exchange Commission (SEC) in the US are being implemented and will impact organisational change.
However, with nearly half the global population heading to the polls this year, election outcomes will shape how governments worldwide implement policies and incentives for sustainability. At the heart of this is the voters’ perspective, reflecting the importance we place on the environment. The fate of the planet depends on our collective view of addressing climate change, and the outcome of upcoming elections will be very important.
Will this year mark the tipping point to remove the frog from the pot? It is difficult to say, but our carbon budget is rapidly running out if we aim to stay anywhere close to the Paris Agreement. I hope that 2024 marks the year that individuals, communities and businesses collectively work towards a future that not only acknowledges the importance of sustainability but the urgency to take real action.
Dr. James Robey is EVP Global Head of Environmental Sustainability at Capgemini.
James has led the Capgemini Group sustainability agenda since setting first carbon reduction targets in 2008. He is a long-term advocate of ambitious and transparent targets as a mechanism to drive innovation to ensure continual improvements. He led the development of and is driving the Group’s global net zero program to reduce environmental impacts across its most material impacts towards the goals of Capgemini, reducing its carbon emissions by 90% across all scopes to become net zero by 2040.
In addition, James also brought a client focus to Capgemini’s sustainability vision, working with the leadership to establish a target for the Group to help its clients with their sustainability and carbon reduction goals.
1 https://unfccc.int/news/2020-was-one-of-three-warmest-years-on-record
2 https://www.flightradar24.com/data/statistics
3 https://www.washingtonpost.com/climate-environment/2024/01/02/record-heat-2024-el-nino/
4 https://www.capgemini.com/insights/research-library/sustainability-trends-2023/
5 https://www.capgemini.com/news/press-releases/the-share-of-executives-recognizing-the-business-case-for-sustainability-has-tripled-in-the-last-year/
6 https://environment.ec.europa.eu/topics/circular-economy/green-claims_en
7 https://www.fca.org.uk/publication/policy/ps23-16.pdf
8 https://environment.ec.europa.eu/topics/forests/deforestation/regulation-deforestation-free-products_en
9 https://www.capgemini.com/news/press-releases/three-quarters-of-organizations-say-they-need-climate-tech-to-achieve-net-zero-goals-but-lower-costs-are-essential-for-widespread-adoption/
10 https://www.capgemini.com/insights/research-library/sustainability-trends-2023/
11 https://www.capgemini.com/gb-en/insights/research-library/investment-trends-2024/
12 https://www.capgemini.com/insights/research-library/sustainability-trends-2023/
13 ‘Harnessing the value of generative AI: Top use cases across industries’, Capgemini Research Institute, July 2023
