2024 marked a challenging year for sustainability efforts globally despite increasing awareness and commitments from governments, businesses, and individuals. Geopolitical tensions, economic downturns, and natural disasters derailed progress, exposing the fragility of current systems to combat climate change and promote environmental responsibility. A similar pattern can be observed in the corporate world; many companies, which included Tractor Supply Company, John Deere, Jack Daniels, Black & Decker and Walmart, were accused of greenhushing and scaling back from their DEI and sustainability initiatives.
Corporations now fear boycotts and bad publicity, which may drive them to make irrational and impulsive decisions. Previously, some of these companies scaled back on their LGBTQ+ rights, climate goals, and other DEI initiatives, indicating that they are protecting their brand image and potential boycotts. This may sound like a good risk mitigation strategy, but it could prove detrimental to their long-term strategic goals.
However, amidst this chaos, there is a silver lining to it. Most companies have not completely sidelined their sustainability practices; they continue to practice work towards reducing their carbon footprint. Moreover, companies like Blackrock continue to maintain a stack of funds for its ESG and clean economy funding.
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Overwhelming Sustainability Reporting
The sustainability report requirement is not yet designed to drive results on sustainability performance. Time and energy spent by the sustainability departments on developing a new system and processes for measuring sustainability performances are doing more harm than good.
While preparing these reports, companies must shift their attention and resources away from the real problem, which they could otherwise use to become more sustainable.
Recently, the EU announced that any company listed or subsidiary listed in the EU, roughly amounting to 50,000 companies, has to comply with the EU’s Corporate Sustainability Reporting Directive (CSRD), which will come into effect in 2025. Strict regulations like these force companies to shift their focus from being sustainable to being compliant.
Growth Of AI Threatens Decarbonisation Efforts
Amazon, Google, Microsoft, Apple, and Meta are the leading renewable energy buyers around the globe. However, their endeavours to win the AI race have increased their electricity consumption, blowing a hole in their sustainability goals. Microsoft’s and Google’s emissions have increased by 30% and 50% in the last four years.
Environmental Crises Amplify the Challenges
Amid policy setbacks and corporate retrenchments, 2024 was also marked by unprecedented environmental crises. Extreme weather events, fueled by climate change, caused widespread devastation and highlighted the cost of inaction.
“Heatwaves in Europe, for instance, set new records, with parts of Southern Europe experiencing temperatures exceeding 46°C (115°F). In the United States, wildfires ravaged over 10 million acres across the West, while flash floods in New York City caused billions in damages and displaced thousands.”
These events emphasised the increasing frequency of climate-induced disasters and their disproportionate impact on vulnerable populations. The mounting costs of disaster response strained government budgets, diverting funds from long-term sustainability initiatives.
Geopolitical Tensions Undermine Global Cooperation
Another key reason for the sustainability setbacks in 2024 was the growing fragmentation of international climate cooperation. The potential withdrawal of the United States from the Paris Agreement under a Trump administration created uncertainties about the future of global climate efforts. Similarly, geopolitical tensions between major emitters like China, the U.S., and the European Union slowed progress on international agreements targeting emissions reductions.
A Wake-Up Call
While setbacks are disheartening, they also underscore the need for renewed urgency in tackling climate change. Policymakers, businesses, and citizens must prioritize sustainability as a non-negotiable element of economic and social progress. The lessons of 2024 should serve as a wake-up call, inspiring collective action to build a more sustainable and resilient future for all.
