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Following the unprecedented market and policy momentum behind environmental, social and governance in 2021, investors, corporate boards and government leaders raised expectations for progress on climate pledges in 2022. Alongside climate, biodiversity and other environmental concerns, social issues — like diversity, equity and inclusion and worker well-being — remained in the spotlight in 2022. Rising demands for action have led to increasing pressure for more accountability, greater regulatory scrutiny and credible disclosure backed by better data.
Around the globe, there is growing awareness of the risks and impacts of climate change and a growing urgency to mitigate and adapt. Companies across sectors are setting goals to reach net-zero emissions by 2050.
But the path to the energy transition is not always straightforward. For example, when planning for the energy transition, stakeholders also need to consider how to make those plans just and equitable, while net-zero goals must take into account the impacts on nature. In addition, amid the ongoing Russian invasion of Ukraine, economies are facing tough choices about how to balance their immediate energy security needs and energy affordability with longer-term energy transition plans.
While many large companies are setting sustainability goals and publishing ESG-related data, investors, regulators and the broader public are exercising greater scrutiny of corporate sustainability efforts, calling out what they perceive as "greenwashing." Much of this skepticism is founded on concerns that companies may be using disclosures and sustainability-related labels on products and services as a marketing tool to appear more proactive on those issues than they truly are.
New global ESG-related standards continue to evolve, while global standard-setting bodies such as the one-year-old International Sustainability Standards Board can help address what may be the largest obstacle to accountability: the lack of a common baseline for disclosure standards consistent across jurisdictions and industries.
The increasing role of carbon pricing in the energy transition
Soundbite: Carbon pricing mechanisms are likely to increase as governments include them in policy to make economies more sustainable.
Accelerated push for renewables facilitates net zero goals
Soundbite: Net-zero has been one of the buzzwords in sustainability as countries and large corporates around the world have pledged to cut their greenhouse gas emissions as close to zero as possible and offset the remainder, usually by 2050. But that distant deadline has taken on a new urgency, notably in Europe, following Russia's invasion of Ukraine.
ESG regulation and standards create shift in sustainability agenda
Soundbite: New global ESG-related standards will continue to evolve, following the formation of the International Sustainability Standards Board. This could help address what may be the largest obstacle to accountability: the lack of a common baseline for disclosure standards consistent across jurisdictions and industries.
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