Society is increasingly committed to creating a better and greener future - governments are producing more pro-sustainability regulations, investors are increasingly looking for sustainable business models and consumers are demanding more responsible products, services and supply chains.
This will all have a major impact on how businesses define success in the year ahead. Here are our top sustainable business trends for 2023.
Consumers expect greater transparency on business processes and sustainable practices
Forbes states that it is more important than ever for businesses to clearly communicate their end-to-end processes as consumers pay greater attention to material sourcing, working conditions, animal welfare practices and waste management when making purchasing decisions.
At the same time, consumers are becoming increasingly aware and critical of greenwashing campaigns, which puts long-term brand credibility at risk. To counter this, businesses should incorporate sustainable principles at the heart of their strategies. A perfect example of this is People Tree, a fashion brand that guarantees fair trade, eco-friendly products, and only uses GOTS-approved dyes.
Stakeholders demand sustainable initiatives as purpose-led brands increase profitability
Demand from the government, investors, and consumers is driving business transformation. According to McKinsey’s research of over 30 countries worldwide, 93% are setting up Extended Producer Responsibility (ERP) regulations to ensure manufacturers behave more responsibly. Meanwhile investors are increasingly open to funding responsible companies and consumers are willing to pay more for sustainable products.
Brands like Patagonia and The Body Shop are two top examples of purpose-led brands while Orsted, which was once the most coal-reliant company in Europe, is now the world's most sustainable energy company.
Exploring alternatives for green logistics and eco-friendly distribution
Transportation and distribution contribute significantly to the world’s CO2 emissions, accounting for 37% of end-use sectors in 2021. By implementing a sustainability agenda, transportation and logistics companies will have the opportunity to transform their business, lower their emissions and change how they operate.
One way for the transportation sector to make a big difference is by greening their fleets. General Motors, FedEx, Walmart and Verizon are all looking into all-electric vehicles to help reduce their footprint. Amazon has committed to making 50% of its shipments net-zero by 2030 and using custom electric delivery vehicles and micro-mobility technologies such as traditional bicycles and electric bikes for their last-mile delivery.
A collective movement toward the non-single-use economy
Waste has always been a major environmental problem, but manufacturers are becoming increasingly aware that they need to take greater responsibility. Brands are starting to place more emphasis on the circular economic model to help consumers understand product cycles, and buy and use circular products more conveniently.
IKEA is committed to becoming fully circular by 2030. By collaborating with H&M, IKEA also created Atelier100, a hyper-local store built using recycled materials, and recruited local creatives within 100km to design, produce and sell sustainable products. Meanwhile, TOUS has been in the jewellery business for over a century, and they have been offering after-sales services to restore, reuse and recycle the old ones.
Promoting equal opportunities and mutual respect within an organisation
Corporate responsibility is not just about minimising environmental impact. Businesses can showcase their ongoing dedication to responsible practices by ensuring they address key issues within their own organisations such as fair wages, safe working conditions and employee protection.
More companies have given equal opportunities to strive for their employees’ careers and welfare. The Stroopie Co., a US-based company that sells stroopwafels, provides employment opportunities for refugees who are forced to leave their homes due to war, persecution, or natural disaster. Another example is Nkuku, an ethical homewares provider that preserves traditional handmade skills by nurturing an ethical and transparent relationship with its small-scale suppliers and artisans worldwide.