Understanding the importance of sustainability for businesses is paramount. According to ESG Book, investments in entreprises with higher environmental, social and governance (ESG) ratings tend to generate higher yields.

Since environmental and social sustainability is key to business success, identifying the emerging trends can help you change the way you interact with your stakeholders, the public and the environment as a whole.

Sustainability trends for businesses

1. Health of the planet as no. 1 concern for consumers

SpAccording to Westfield’s latest survey, customers are actively considering the environmental and social impact businesses make with the development of their products. 90% of survey respondents state they are willing to pay a premium for environmentally sustainable goods.

The Ethical Consumption Movement in Hong Kong, with an aim to seek more support for developing social enterprises and promoting conscientious consumption, sets off in the right direction. Coupled with the waste reduction movement, as part of the Waste Blueprint for Hong Kong 2035, locals are introduced to new ways of being environmentally and socially conscious. Some environmental sustainability policies across stores include paying for plastic bags and offering takeaways strictly to consumers who bring their own containers.

By placing environmental and social sustainability at the core of their operational models, businesses can further drive the cause for the planet’s health. Ethical consumerism is no longer a pretty term; rather, it is a powerful catalyst for sustainable business development.

2. Renewable energy to become more cost-effective option

The cost of renewable technologies has become more affordable than it used to be 10 years ago. According to a press release from the United Nations, renewables are the cheapest form of power, as compared to coal and fossils, which are subject to external market forces that result in volatile price fluctuations. With the development of environmentally sustainable renewable energy now cheaper than fossil fuels in most places worldwide, switching to greener energy solutions is set to be a favourable trend in 2023 and beyond.

Our GoGreen climate neutral service, for instance, lets you offset your greenhouse gas emissions by investing in internationally recognised climate protection projects. Our Lesotho project in South Africa is an example.

4. Increase in sustainable investments

Sustainable investments direct investment capital to companies looking to combat environmental destruction and climate change, while promoting corporate responsibility. PwC’s Global Investor Survey 2022 found that ESG outcomes are one of the top priorities for investors.

Younger investors are more drawn towards sustainable investing. They desire to support businesses with intrinsic values that promote positive change to systematic issues like climate change, social and wealth inequality.

More support for environmental concerns will drive up investments in sustainability development causes, pushing this trend forward in the years to come. Businesses seeking ESG funds will, however, need to balance stakeholder interests with long-term business outcomes, without participating in greenwashing activities.

5. Greater transparency

According to an article by McKinsey & Company, over 90% of S&P 500 companies publish their ESG reports. However, ESG ratings often diverge from one another, so it is easy for companies to find one favourable to their interests. As such, a standard on ESG transparency is necessary to make trustworthy disclosures to stakeholders. 

With ESG regulations increasing alongside its popularity, companies will be required to consistently publish sustainability reports to ensure investors know how sustainable long-term financial returns are generated and environmental risk is mitigated.

Such transparency can also help ethical consumers in their purchase decisions. Consumers are becoming increasingly willing to pay more for sustainability, not just in Hong Kong but also around the world. According to Environment + Energy Leader, there was an increase in the willingness of consumers willing to pay more for sustainability, increasing 8% from 2021 to 2022. As consumers perceive themselves to be the representatives of change, companies will have to step up their environmental and social sustainability development plans to sustain brand loyalty.