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Organizations credit regulations and climate tech for their sustainability drive
Organizations believe their sustainability initiatives would have been lacking without a regulatory push and the use of climate technology.
According to a report released by Capgemini Research Institute, some 65% said their company would not have launched several environmental sustainability initiatives if not for regulation. Another 75% pointed to sustainability regulation as necessary to achieve global climate goals.
The study polled 2,152 executives from 727 organizations in 13 nations, including Australia, Germany, India, Italy, Japan, the UK, and the US. Another 6,500 consumers aged 18 and above were surveyed across the 13 markets.
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In addition, 69% of organizations are anticipating stricter regulations in the future to be a key driver of sustainability initiatives, up from 57% last year, the Capgemini study noted.
However, regulations also can come with challenges. An executive from a large European telco explained that ESG (environmental, social, governance) regulation carried the risk of becoming “a mere compliance task driven by reporting requirements.”
Sven Jansen, head of global finance at Hellmann Worldwide Logistics, added that while legislations fuel sustainability efforts, the increased workload and substantial costs required to comply can create major obstacles for organizations.
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It’s also boosting companies’ ability to monitor their sustainability posture, with 73% of executives agreeing that the EU Corporate Sustainability Reporting Directive has pushed their organization to enhance its sustainability measurement and tracking capabilities.
The study revealed that 67% of organizations believed they would not have achieved their sustainability goals without the help of climate technology. In particular, 69% pointed to the critical role of data and digital technologies in accelerating climate tech adoption.
65% said their organization used generative artificial intelligence (Gen AI) to achieve its sustainability goals. This figure is higher than last year’s 56% who said likewise, the study noted.
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Another 57% noted that the impact of Gen AI on sustainability is a topic of discussion in their boardroom, with 67% believing the benefits of Gen AI outweigh the negative impact the technology has on the environment.
Citing a separate July 2024 research on Gen AI, Capgemini said one-third of organizations are currently monitoring their energy and water consumption, as well as carbon emissions associated with the use of the AI technology.
In fact, 68% said sustainability-related data is available and shared across their entire organization, up from 56% last year and 43% in 2022.
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Some 84% said their organization is on target to meet its carbon emissions goals, while 9% acknowledged they are behind.
In addition, 65% of executives believe current geopolitical developments are slowing down sustainability investments. Some 69% expressed concerns about the impact of the uncertain political environment in the US and other regions on their sustainability investments and projects.
José Antonio Coll from Airbus detailed that “geopolitics has a significant impact on our sustainability investments because of our global industrial footprint and supply chains. As we and our supply chain operate under different regulations in various countries, we implement risk management checks to ensure we are operating sustainably, with a focus on how and where we source materials responsibly. Additionally, we work with many defense ministries, so export control and due diligence are crucial depending on the geopolitical context.”
And despite organizations’ efforts to reduce their impact on the environment, consumers are increasingly skeptical of such initiatives.
The Capgemini study found that 52% of consumers believe businesses or brands are greenwashing their sustainability initiatives, up from 33% last year. The report defines greenwashing as “engaging in false or misleading advertising about environmental or sustainability claims” for products and services.
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Some 59% of consumers said they “never, rarely, or only sometimes” trust an environmental claim about a potential purchase.
Such skepticism has not gone unnoticed, with 62% of executives expressing concerns their organization’s sustainability efforts might appear insincere to the public.
In fact, 43% of executives believe consumers consider their organization’s sustainability efforts as greenwashing. This figure is up from 17% in 2023.