The Next Economy
Post-Davos, 4 Key Considerations for Sustainability in 2024

After the most recent World Economic Forum (WEF) annual meeting, the business world has set out a host of new priorities it plans to tackle in 2024 — from tamping down inflation to seizing the opportunities presented by the rapid advancement of AI. However, while more modish priorities may have headlined the conference, the need for a unified vision and a shared commitment to driving business transformation to meet the sustainability needs of tomorrow remained center stage.

Businesses around the world today continue to lay out ambitious climate goals. However, with less than half of organizations having firm KPIs for of tracking their sustainability progress, it is no surprise to see that sustainability dilemmas continue to be a staple of the WEF agenda — as businesses come to terms with not only the obstacles they face but how to solve them.

With that, the WEF annual meeting served as a key guidepost for both where the business world is now, and the key considerations it will need to incorporate into its sustainability strategies for the year ahead. Here are some of the key themes that businesses need to take away from the event.

Closing the nature funding gap

UNEP Executive Director Inger Andersen could not have summed up the role of nature in meeting tomorrow’s sustainability goals in her opening remarks at the WEF 2024 any better when she said, “Nature does everything — from cities to products, we've built the world on Earth's finite resources.” In other words, nature is the building block of civilization and business today. Yet, funding for nature-based solutions and conservation continues to be a trickle of overall corporate spending.

The WEF underscores the vast economic opportunities that a nature-positive transition could bring, with an estimated annual business value of up to $10.1 trillion and the potential to create 395 million jobs by 2030. Despite these promising projections, actual investment in nature-based solutions remains modest — totalling around $200 billion annually.

Comments such as Andersen’s that have emanated out of WEF 2024 suggest that the business world has started to recognize the nature-based investment imbalance and is beginning to see the inextricable link between climate change and nature loss. 2024 must be the year where we start to see this funding gap shrink as businesses funnel more money towards regeneration and biodiversity promotion.

Sustainable transformation hinges on corporate transparency

Hitting net zero or other sustainability goals is more than just a checkbox activity. It requires a far-reaching and systematic approach where climate and nature are considered at each step of a transformation plan and an organization’s broader strategy. WEF 2024 provided further evidence that businesses are recognizing this fact and are realizing that sustainability needs to be imbued throughout an entire organization — from ideation to implementation — if transformations have any chance of succeeding.

Sustainable transformations require the alignment of business models with planetary boundaries and need to encompass economic, social, and environmental dimensions to enable a just transition. Organizations need to look at regulations and frameworks such as the EU Corporate Sustainability Reporting Directive (CSRD), California’s new climate-related disclosure laws, and SEC's expected disclosure rule on climate change as enablers of transformation — not burdens. At a minimum, by requiring disclosure of emissions and climate risks, these policies encourage businesses to adopt more sustainable practices — such as improving energy efficiency and increasing investments in renewable energy — yielding significant benefits in terms of cost savings, reputation enhancement and meaningful strides towards achieving climate resiliency.

Accomplishing this is, of course, easier said than done; but businesses that are able to expand their efforts in this regard in 2024 stand to have a leg up for potentially decades to come in terms of both operational success and regulatory standing. By establishing transparent reporting frameworks, businesses not only ensure accountability but also pave the way for setting new, more ambitious goals. Moreover, transparent reporting and effective communication help businesses share their sustainability journey credibly — building trust with customers, investors and regulators.

Expanding the role of AI in addressing climate change

High-flying proclamations from big tech that AI is a panacea to society’s problems have been increasingly met with eyerolls throughout the business world. Nonetheless, while artificial intelligence still has significant room to grow to meet these lofty promises, the hugely impactful role that it can have in meeting the pressing sustainability needs of today — and its potential for catalyzing systemic operational change — also must not be ignored.

One area where this impact will certainly be felt is in streamlining emissions-related data management and reductions analysis. Businesses are set to face increasingly stringent reporting demands across Scope 1, Scope 2 and Scope 3 emissions. This is already a major pain point for even the most sophisticated businesses; and as supply chains expand and become more complex, manually managing the vast amount of data that is going to be created is simply impossible.

With a focus on enhancing data quality, business teams are beginning to integrate AI to provide more accurate estimations of GHG emissions. AI’s capabilities also help unlock new insights from the immense and complex simulations facilitated by climate modelling, providing valuable information that informs strategic corporate decision-making.

Ultimately, AI allows businesses to meet data-management demands and derive actionable insights. While the human component in interpreting data and innovation will not be replaced by AI, this capability ensures that businesses have tangible insights available quickly — facilitating speedier decisions and enhancing collaboration between internal and external stakeholders. The upsides of AI have not gone unnoticed by the business world and were highlighted throughout the WEF 2024 as a result, underscoring that AI — though still evolving — will be a pillar of business-sustainability conversations for years to come.

Collaboration is key

Arguably, the most important takeaway from this year’s WEF is the need for collaboration and the opportunity for doing so. Climate change is a multi-tenet problem that will not be solved by uncoordinated, individual action. Instead, it will require close collaboration across public and private stakeholders whereby information is continuously shared, and decisions are made to benefit the common good — including sustainable business growth. By taking steps such as embracing technology and closing the nature funding gap, businesses can begin to pave the way for this collaboration and lay the foundations for the clean and regenerative business world of tomorrow.