By Ira Srivastava

1. Competent Boards releases report on Boards’ Sustainability Competency in Europe and the US. To stay ahead of the curve and gain insights into the evolving landscape of board-level sustainability practices, we invite you to subscribe for an exclusive early release of our upcoming report. This pivotal document compares the competencies in sustainability of European boards with their counterparts in the United States. Ensure you’re informed by securing your copy before its official release at the Davos conference. Sign up now to receive your early copy by January 10th.

2. Renewable energy met over 50% of Germany’s 2023 energy demand. In 2023, Germany hit a historic clean energy milestone as nearly 52% of the country’s energy demand was met by renewable energy such as solar panels and onshore wind farms. Green energy production increased by 6% from 2022 as well. Renewables have long been seen as an unreliable source of energy that is an unrealistic replacement for fossil fuels, but Germany’s data says otherwise. However, much more work is necessary to decarbonize quickly enough to avoid the worst impacts of climate change. This includes investing in green hydrogen, new fuel sources, improving renewable energy storage capacity, and more. 

3. What will ESG look like in 2024? Natalie Runyon, Director of ESG Content and Advisory Services at Reuters shares six of her predictions for ESG in 2024.

  • Sustainability and finance will become more closely integrated for companies around the world. 
  • Reporting requirements will extend to private companies as many frameworks require Scope 3 reporting by 2024, such as those in California and the European Union.
  • ESG will continue to be a political issue as “50 countries and regional bodies [will be] experiencing elections in 2024”. Politicians may use anti-ESG sentiments to energise their bases. 
  • Biodiversity will become a key ESG issue. Momentum for this already grew following the 2022 Global Biodiversity Framework and Taskforce on Nature-related Financial Disclosures guidance. 
  • Focus will intensify on supply chains as companies seek to address sustainability and human rights following the EU’s Corporate Sustainability Reporting Directive.
  • Regulators will crack down on greenwashing by developing specific ways to identify the practice and punishing companies found to be greenwashing.

4. The future of AI in ESG. One of the key trends for 2024 is the integration of artificial intelligence into business practices. More than 20% of respondents to a McKinsey survey shared they “are already regularly using [generative AI] in their work”. Strong AI governance is key to ensure that companies can appropriately address AI-related risks such as human rights violations, perpetuating inequality, data security and more. Investors must hold companies accountable and pressure boards to create strong AI governance strategies. Governments around the world are also implementing regulations to manage AI such as the EU’s AI Act. 

5. ESG issues that will be top of mind this year. 2023 was a whirlwind year for ESG and climate change action, and 2024 will be no different. Climate and biodiversity disclosure expectations will ramp up this year, as the United States Securities and Exchange Commission is expected to release climate disclosure rules in the first quarter. The Federal Trade Commission has plans to update its guides to help avoid greenwashing in marketing and crack down on it by changing definitions of words such as “compostable” and “recycling”. Ongoing geopolitical tensions will impact supply chains, and companies must prepare for closer scrutiny on human rights in their supply chains as well.

Ira Srivastava is Competent Boards’ Program Coordinator. Follow Competent Boards on LinkedIn.

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