By Ira Srivastava

1. 54% of CEOs are placing greater focus on sustainability now than last year. According to EY’s latest global CEO Outlook Pulse Survey, the majority of CEOs are more concerned with sustainability-related issues now than in 2023. Respondents included over 1,000 executives from 21 countries around the world. These figures varied regionally, with 62% of North and South American respondents reporting an increased focus on sustainability. 51% of European respondents and 49% of respondents in the APAC region reported the same. This reprioritization of sustainability is likely related to the fact that almost ⅔ of the CEOs surveyed felt “more optimistic about their companies’ revenue growth” compared to this time a year ago. However, there was a discrepancy between CEOs and institutional investors as only 28% of investors surveyed were prioritizing sustainability more now than last year. 

2. Japan announces potential new disclosure standards in line with ISSB. The Financial Services Agency of Japan released two drafts for implementing disclosure standards in the country. These are built off of the International Sustainability Standards Board’s IFRS S1 and S2 that were released in 2023. The primary difference between the two drafts is the timeline for implementation, with one draft requiring disclosures by March 2027 and the other pushing that back by one more year to 2028. These standards will also align with the EU’s Corporate Sustainability Reporting Directive which Japanese companies operating in the EU will have to comply with by 2028. Currently, the Sustainability Standards Board of Japan is looking for feedback on exemptions for reporting. 

3. The state of net-zero for top US firms. According to a report published by S&P Global, just 45% of large companies in the United States have set net-zero targets. Those numbers also vary between industries. For example, 81% of utilities companies have set decarbonization targets compared to just 25% of companies in the materials industry. However, some high carbon intensity industries such as energy will only address approximately 5% of their emissions with their current targets. Conversely, the majority of real estate companies have not set targets but due to their relatively low carbon intensity the current targets will still address 80% of emissions. Of the target-setting companies, most have set both Scope 1 and Scope 2 targets regardless of industry. Scope 3 targets are still lagging across the board. In terms of ambition, the most common target set by US companies is halving emissions. 

4. Accounting for Sustainability’s Sustainability Barometer 2024. A new report from A4S analyzes CFO preparedness for sustainability. In recent years the sustainability conversation has shifted from why it is important to how it should be implemented as environmental and social risk mitigation are becoming essential to business operations. 88% of CFOs shared that sustainability “is essential or very important to transform financial decision making”, however only 9% believed they were prepared to respond to sustainability challenges. Employee engagement, risk mitigation and stakeholder demand were identified as the driving forces behind sustainability strategy adoption. Failure to adapt to stakeholder demands and new regulations was the largest risk identified, followed by talent retention and climate change adaptation. The greatest opportunities were developing climate change solutions, new technologies, and improving diversity and inclusion. Read the full report here.

5. Climate action hangs in the balance of 2024 elections. Nearly half of the world’s population is set to go to the polls in 2024, the largest election year in history. This includes the European Union, United States, India, Indonesia, Russia, the United Kingdom, and more. If Donald Trump were to win the United States presidency, it is likely that many ESG and sustainability regulations will be walked back. This would start with the SEC’s recent climate disclosure rules. Institutional investors would also likely be forced to limit sustainable investment options due to political pressure, and a Trump presidency would likely embolden state lawmakers to pass more anti-ESG bills. Elections for the EU Parliament are set for June, and early polls are predicting a more right-wing parliament. Despite the passing of landmark disclosure, due diligence, and nature restoration legislation, more ambitious actions will become more difficult.

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

Back To News & Views