SustainabilityTrends
QUARTERLY OUTLOOKJuly 2024

Sustainability Trends: Quarterly Outlook

JULY 2024

1TREND 1

Elections, trade wars, and court rulings reshape the sustainability landscapeA string of mostly right-wing election wins puts global sustainability
action and policy under pressure, with more elections, including in
the U.S., to come. As democracy runs its course, a global trade war overelectric vehicles is flaring up, while the U.S. Supreme Court dealt aserious blow to the enforcement of U.S. environmental laws.
Global elections already altering sustainability action,with more change to come• 2024 is one of the most significant years for elections inrecent decades, with close to 50 percent of the world’s
population heading to the polls. While economic andnational security impacts are sure to be top of mind, thefuture of sustainability action will also be significantly
effected as evidenced by elections that have already occurred.
• In the European Union (EU), right-wing parties failed
to make the bloc-wide gains in parliamentary elections
some had projected, even as they made significant
strides in France and Germany. Still, the sustainability
advances made by the previous EU parliament may be
hard to replicate as growing pushback against green
policies force centrist parties to slow down action
to keep their fragile governing coalition together.
Sustainability action may move the other way in theUnited Kingdom. With Labour returning to power,
climate action is already receiving greater emphasis
after the party dropped a de facto ban on onshore windfarms shortly after taking office.
Sustainability Trends: Quarterly Outlook

JULY 2024• Beyond Europe, elections in India and Mexico also
have sustainability implications. India’s generalelection coincided with a record heatwave acrossmuch of the country that killed election officials.
However, climate change was rarely featured byeither of the major coalitions beyond vague promises
like the ruling Bharatiya Janata Party’s to create
huge solar and wind farms and build out energy
distribution networks. Even so, sustainability
issues like the water shortage gripping the capitalwill undoubtedly feature prominently throughout
Narendra Modi’s third term. In Mexico, the electionof Claudia Sheinbaum, an actual climate scientist,brings hope of accelerated action after current
President Andrés Manuel López Obrador pushed for
expanded fossil fuel development under the auspicesof energy security.
• Of elections still to come, none will be moreclosely watched than the U.S. general election. InApril, former President Donald J. Trump hosted
oil and gas executives and lobbyists, promising to2

rescind environmental actions taken by the Biden
administration in exchange for campaign support.
However, the energy landscape has changed sincePresident Trump was in the White House. Many oiland gas companies approve of many of the provisions
included in President Biden’s signature climate
policy, the Inflation Reduction Act, and are likely
to defend against their rollback by a future Trumpadministration. The race is sure to heat up further
after President Biden decided not to run for reelection
on July 22nd. While who will replace him at the top of
the Democratic ticket remains to be seen, what is clear
is that President Biden will leave office with the mostimpactful climate record in U.S. presidential history.
Electric vehicles at the center of global trade disputes• China is the dominant player in electric vehicles(EV) globally, accounting for over half of all global
production. This dominance and how it was brought
about are topics of concern for many western countries
who fear that state subsides have created an unfair
advantage for Chinese EV manufacturers thatthreatens the viability of their domestic champions.
• The U.S. struck first to protect EV manufacturing in
May when it raised tariffs on Chinese electric vehicles
from 25 percent to 100 percent. The EU, where Chinese
EVs already account for approximately 25 percent ofEVs sold, followed in June by raising tariffs by up to 38
percent on Chinese vehicles.

Sustainability Trends: Quarterly Outlook

JULY 2024• In response, China suggested that it may impose its
own tariffs of up to 25 percent on vehicles with engines
bigger than 2.5 liters imported from manufacturers inthe U.S. and the EU. Despite threats of an escalating
trade war, both China and the EU signaled they would
be open to discussing ways to resolve the dispute.
U.S. Supreme Court’s Chevron ruling poised to havewide sustainability impact• In one of the final rulings of its 2024 term, the U.S.
Supreme Court ruled 6-3 in favor of overturing 1984’s
Chevron v. Natural Resources Defense Council decision,
which stipulated that the judiciary must defer to an
executive branch agency’s interpretation of a law whenthat law’s language is ambiguous. After the ruling,
one focus of those in sustainability circles has been
the future Securities and Exchange Commission’s(SEC) Climate Disclosure Rule. In creating the rule,
the SEC relied on its perceived authority under theSecurities Act of 1933 and the Securities Exchange
Act of 1934 to protect investors by providing themwith information on climate-related risks. However,after Chevron’s overturning, the likelihood that theSupreme Court upholds the SEC rule without specificaction by Congress to grant it authority over corporate
climate disclosure is slim. The ruling will also likely
significantly diminish the Environmental Protection
Agency’s ability to enforce the Clean Air Act and Clean
Water Act as every decision it makes on the laws can
now be tested in court.

3TREND 2Nature protection goals and sustainable agriculture practices
gain traction, but concrete actions is often still elusive
Nature-related disclosures, nature restoration laws, and sustainableagriculture practices continue to gain ground. However, many countries are
failing to follow up on these achievements with concrete actions of their own.
Nature-related disclosure momentum continues to growwith more help on the way• The Taskforce on Nature-related Financial Disclosures(TNFD) was launched to great fanfare in September
2023. Almost 10 months later, the number of companies
adopting the recommendations for nature-related
reporting continues to grow. At London Climate Action
Week in June, the TNFD announced that a further 96
companies adopted the guidance, bringing the total
to 416 spread across 50 jurisdictions and representing
over $6 trillion in market capitalization. Japan is by far
the leading jurisdiction for corporate adoption, with81 organizations committing to align with the TNFD
recommendations by 2025.
• As corporate adoption grows, more help to betteralign the TNFD recommendations with theparticularities of different sectors is on the way.
The TNFD also launched the first group of its
sector guidance documents for eight industries
including chemicals, food and agriculture, andmetals and mining. These documents outline whattypes of company activities could have material
Sustainability Trends: Quarterly Outlook

JULY 2024

nature-related dependencies, impacts, risks, andopportunities and provide a set of sector-specificmetrics for nature-related disclosures.
Companies and countries scale up their sustainableagriculture ambitions• Back in January, we highlighted the growing numberof companies utilizing sustainable agriculture
practices in our 2024 Annual Trends Report. Six
months later, momentum continues to build. InMarch, Charoen Pokphand Foods successfully
applied a corn traceability system to its operationsin Thailand, enabling the company to confirm thatthe corn it sources originated from deforestation-freeareas. At the end of April, Archer-Daniels-Midlandannounced its regenerative agriculture program grewby more than 2.8 million acres in 2023, well over its
2 million acre goal. In June, Heineken completed
the first large-scale regenerative agriculture barleyharvest following a collaboration with a French
farming cooperative.

4• Governments are getting in on the action too. In June,
Denmark announced that it will impose the first evercarbon tax on agriculture, with a fee on livestock
emissions beginning in 2030. Still, the carbon tax’s
future is not guaranteed as evidenced by New Zealandstopping efforts to price livestock emissions earlier inJune after pushback from farmers.
Efforts to stem nature loss receive both welcome andunwelcome news
• Welcome steps were made to stem nature loss this lastquarter. After months of uncertainty, the European
Union in June formally adopted its Nature Restoration
Law, which sets out targets to restore 20 percent of thebloc’s degraded land by 2030 and 100 percent by 2050.
A few days earlier, Canada released its 2030 Nature
Strategy outlining the country’s plan to implement thenature protection goals under the Kunming-Montréal
Global Biodiversity Framework. Lastly, the Australian
government is preparing to host the first Global
Nature Positive Summit in October, which will aim toencourage nature-related reporting, accelerate naturefinance, and bolster community collaboration in nature
positive activities.
• Despite these welcome achievements, governments
still have work to do in the nature space. A UN-REDD
report published in June found that only eight of the
20 countries with the worlds highest deforestation rates
have set deforestation reduction targets under theirnational climate action plans, or Nationally DeterminedContributions. (NDCs). The report also found that all
NDCs together fail to halt global deforestation by 2030, a
pledge countries made back in 2021 at COP26 in Glasgow.

Sustainability Trends: Quarterly Outlook

JULY 2024

5TREND 3Companies have sustainability’s commercial upside more firmly on theradar, but not enough to keep them from walking back earlier commitments
After years of viewing sustainability as a drag on profits, many companies
now embrace the commercial opportunities of the sustainability
transformation. As a result, the demand for green jobs and skills is soaring.
However, the growing number of companies backtracking on sustainability
goals signals that the conversion is not yet complete.

Sustainability Trends: Quarterly Outlook

JULY 2024

Company views of sustainability’s value creation
benefits are improving

Green jobs numbers continue to tick up as new
corporate sustainability roles emerge• Companies worldwide are increasingly connecting theirsustainability activities to commercial value, heightening
the incentive for action. A recent survey of a set of public
and private companies across Asia-Pacific, Europe,and North America found that 85 percent consider
sustainability a long-term value creation opportunity.
The same survey found that value creation was also thenumber one reason companies pursue sustainability
action. CEOs in the U.S. are also expecting theirsustainability efforts to create value, with another recent
survey finding that 55 percent expect to see a return on
their sustainability investments in the next 3-5 years.

• The transition to a truly sustainable economy
will require tremendous growth in the numberof workers with green skills. There are signs thisneeded growth is occurring. According to LinkedIn’s
annual green skills report released early this year,
the share of green talent (defined by if the worker has
a green skill listed in their profile or who has a title
associated with green skills) in the global workforce
grew by 12.3 percent between 2022 and 2023, while
the number of green job postings requiring at least
one green skill rose by 22.4 percent. In the U.S.,
climate-related jobs are also growing. A 2024 review
of 2022 employment changes of jobs involving energy
efficiency, renewable energy, and other types of clean
energy work found that job creation grew by 3.9
percent compared to a 3.1 percent increase in overall
U.S. employment in 2022.

• As sustainability’s value creation benefits becomesincreasingly attractive, more companies are tying
executive compensation to sustainability metrics toinspire action on the long-term issues critical to their
future success. Approximately 90 percent of all large
companies globally now tie executive compensation totheir sustainability strategies and goals.

6• Singapore is one country aiming to accelerate green
skills growth. In April, the city-state announced that
it will invest $26 million over the next three years to
help upskill and reskill financial workers in sustainablefinance-related topics. The move was motivated by aSingapore-commissioned study that projected that thesustainable finance market in southeast Asia wouldgrow by up to $5 trillion over the next decade.
• New corporate sustainability-specific jobs are also
emerging, with the position of ESG controller foremost
among these. More than 50 Fortune 100 companies
now employ an ESG controller to oversee the data
infrastructure and procedures required to develop
sustainability disclosures. In a similar vein to traditional
financial controllers, ESG controllers are poised to help
companies comply with the increasing number ofsustainability disclosure regulations emerging globally.

Sustainability Trends: Quarterly Outlook

JULY 2024

Notable companies walk back sustainability goals• Despite growing recognition of sustainability’s value
creation benefits, companies are more frequently
walking back their sustainability goals. Unilever,once sustainability’s leading light, retreated fromits goal to cut its virgin plastic use in half by 2025
when it announced in April that it is now aiming
to only reduce use by a third and not until 2026.
Emphasizing Unilever’s changed approach, its newCEO Hein Schumacher declared that the company wasstarting a “new era for sustainability leadership” andthat it was now pursuing what he called “realisticsustainability”, which focuses on fewer, less farreaching commitments.

by 2025. It now aims to achieve the same emissions
reductions by 2030.
• While some companies are pushing back timelines toachieve their sustainability targets, one newsmaker isabandoning some of its sustainability efforts entirely
in a move some are deeming the first corporate antisustainability declaration. In June, Tractor Supply
Company released a statement announcing that among
other actions, it would no longer share data with the
Human Rights Campaign, eliminate all its Diversity,Equity, and Inclusion (DEI) roles, retire its DEI goals,and shelve its carbon emissions goals. Instead, thecompany shared that if will turn its focus to land andwater conservation.

• Other companies are also slowing their efforts.
Volkswagen once aimed to reduce its CO2 emissions
from cars and light commercial vehicles 30 percent

7

TREND 4

Employers struggle to adapt to post-COVID work dynamics andchanging demographics
Questions of how and where people work continue to define workplaces
as companies scrutinize and reshape in-person attendance. Employee
wellbeing and the tendencies of younger workers are also on the minds
of many as companies search for solutions.
Four years on from COVID-19, companies and employees
continue to grapple with evolving workplace dynamics• Although the depths of the COVID-19 pandemic have longsince passed, the workplace disruptions they wrought
are still being felt. As companies continue to reverse
pandemic-era work from home policies, they are turningto new approaches to ensure employee compliance andsteeping up enforcement for those who run afoul.
• In May, Dell made employees classify themselves as
either remote or hybrid workers, with the former
ineligible for promotion. To ensure hybrid employees
meet their required office day goals, the company
is now tracking badge swipes at its offices and VPN
connections. Wells Fargo went a step farther for remote
employees who they found were not doing their job.
In June, the bank fired more than 12 employees after
discovering they were simulating mouse and keyboard
activity to give the impression they were actively
working when they were not.

Sustainability Trends: Quarterly Outlook

JULY 2024• Where employees work when they come into offices isalso evolving. After the pandemic, many companies
implemented hot desking wherein employees could
use or book any desk in the office rather than having

an assigned seat. This practice seems to be fading as
companies look for ways to bring more employees tothe office. Many employees cite frustrations with hot
desking, such as cleanliness and hygiene, a lack ofpersonal touches, and collaboration and relationshipissues, that make in-person work less attractive. As aresult, the number of unassigned office seats this year
is dropping for the first time since the pandemic.
Employee wellbeing improvements fluctuate globallyas on the job happiness falls and loneliness rise
• In 2023, employee wellbeing dropped globally for thefirst time since 2016. According to Gallup’s 2024 Stateof the Global Workplace, only 34 percent of workers
rated themselves as thriving at work. To make mattersworse, 58 percent of global workers rated themselves
as struggling at work, while a further 8 percent rated
themselves as suffering. What has driven these results?
One factor at play is loneliness. Fewer employees
are making meaningful connections as white collar
workdays are increasingly defined by remote work,
non-stop meetings, few opportunities for spontaneous
small talk, and limited interactions across teams.
8• Equal and worthy compensation can have a significant
impact on an employee’s sense of importance andhappiness. For example, one 2023 study found that whenworkers are better paid and when pay gaps between
them were lower, their health and wellbeing improved.
Despite this connection, women still earn only 77 cents
to every $1 that men earn globally. Australia took
action to improve pay equality earlier this year when it
published gender pay gaps at close to 5,000 Australiancompanies. While results were unimpressive (50 percentof employers had a gender pay gap of over 9 percent), themove marks a significant step in equipping employees
and organizations with the information they need tobegin closing and eliminating gaps.
Companies rethink management approaches as younger
generations compose larger portions of their workforces• Workforces are getting younger as Baby Boomers retire
and Gen Zers enter the workforce in increasing numbers.
As older generations make way for younger workers,
companies are rethinking their approaches to management.
Many are finding it difficult to figure out where to start
given the different ways Gen Z approaches work. One May
2024 survey of workers across 44 countries found that 86
percent of Gen Z employees believe that purposeful work
is important to their job satisfaction and wellbeing. This
challenge has led to some multinational companies hiring
advisers to guide them through the intricacies of Gen Z
by, for example, providing insights into the generation’s
preferred communication styles and inclination to pushcompanies to change from the inside out.

Sustainability Trends: Quarterly Outlook

JULY 2024

9