Top ESG trends for enterprise companies to watch in 2024

This article outlines the environmental, social and governance (ESG) trends to watch in 2024, providing insights into the regulatory perspective worldwide, the development of ESG, and the voices of people and governing bodies. It will also explore how technology assists ESG programmes within enterprises, new ESG-related job opportunities, and ESG services that can help bridge the gap and maintain robust ESG programmes within any budget.

ESG at Speeki

Brief overview of ESG

ESG factors have become vital considerations for businesses and investors around the world.

ESG encompasses a wide range of issues, from climate change and resource scarcity to labour practices and corporate board diversity.

In recent years, these factors have moved from the fringes of finance and business to the mainstream as stakeholders increasingly demand more sustainable and socially responsible practices.

Importance of ESG in today's business landscape

The rise of ESG can be attributed to various factors, each contributing to its increasing significance in the global business landscape.

  • Changing consumer preferences: Today's consumers are more environmentally conscious and socially aware. They prefer products and services from companies that demonstrate responsible practices and values aligning with their own.
  • Evolving regulatory environments: Governments worldwide are implementing stricter regulations to ensure companies follow sustainable practices, adhere to ethical norms, and maintain transparency in their governance.
  • Financial performance and risk management: Companies are realizing that strong ESG performance can lead to better financial outcomes, while poor ESG performance can pose significant risks. Investors are increasingly integrating ESG factors into their decision-making processes to mitigate potential risks.
  • Societal pressure and activism: Increased activism from social movements and non-profit organizations is pressuring corporations to adopt responsible practices, further pushing ESG considerations to the forefront.
  • Employee expectations: Current and prospective employees are looking to work for companies that are committed to ESG principles, which is pushing businesses to improve their ESG performance to attract and retain talent.

Evolution of ESG: voices from people and governing bodies

The role of public opinion in shaping ESG trends

Public opinion plays a significant role in shaping ESG trends. What people think and believe about environmental, social and governance issues can influence how companies behave and what they prioritise.

This shift in public sentiment is pushing companies to prioritise ESG and is reflected in the evolving regulatory landscape.

Major ESG milestones and developments in 2024

Several major milestones and developments in 2024 have further cemented the importance of ESG.

  • ESG has now become mainstream, with ESG issues being among the lead stories of most major newspapers every day
  • Over 80 countries now have laws or regulations that regulate ESG reporting
  • There are over 2000 different regulations now in place that require some form of reporting of ESG-related metrics
  • The EU now requires more companies to have whistleblower systems in place (an essential part of ESG)

Insights from key governing bodies on ESG development

Key governing bodies around the world have also echoed the importance of ESG, issuing guidelines and regulations that encourage or require companies to consider these factors.

  • Over 80 countries already have laws on reporting ESG
  • ESG continues to be driven by NGOs setting standards around financial disclosures and global reporting initiatives

A comparative analysis of the regulatory perspectives of the United States, the United Kingdom and Europe

ESG regulations in the United States: recent changes and impacts

ESG regulations have evolved significantly. Key developments include:

  • SEC's ESG disclosures – the Securities and Exchange Commission (SEC) has amplified its emphasis on ESG disclosures, urging corporations to provide more detailed and accurate data regarding their ESG performance
  • climate risk disclosures – climate risk disclosures have been given particular attention, with companies required to provide insight into how their operations and strategies are impacted by climate change.

These changes have encouraged more transparency and accountability among United States corporations, leading to an overall increase in ESG compliance and performance.

A look at the United Kingdom's ESG regulatory landscape

The United Kingdom has also seen significant changes in its ESG regulatory landscape, including:

  • mandatory TCFD-aligned disclosures – the United Kingdom Government has made it compulsory for certain businesses to disclose their climate-related financial risks in line with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD)
  • pension fund regulations – United Kingdom pension funds are now required to consider ESG factors in their investment decisions, reflecting the growing importance of ESG in investment management.

These developments have led to a surge in integrating ESG into business strategies and operations within the United Kingdom, enhancing the nation's commitment to sustainability.

European Union approach to ESG: notable regulations and their effects

The European Union continues to lead the way in ESG regulation, with:

  • the EU Taxonomy Regulation – a classification system establishing a list of environmentally sustainable economic activities, which has been fully implemented, guiding investors and businesses towards more sustainable technologies and activities
  • the Sustainable Finance Disclosure Regulation (SFDR) – requires financial market participants and advisers to make pre-contractual disclosures on how they integrate ESG factors into their risk processes, providing more transparency for investors.

These regulatory measures have further solidified Europe's position as a global leader in ESG, fostering a more sustainable and resilient economy.

The role of technology in ESG governance

Importance of tech in facilitating ESG programmes

Technology plays a pivotal role in facilitating ESG programmes within enterprises. From collecting and analysing ESG data to improving transparency and reporting, technology can enhance a company's ESG performance in various ways.

  • Building ESG profiles and programmes: There is a need to build an ESG programme, including using an established framework and entering ESG data into a technology platform so it can be used to report status, objectives and performance.
  • Incident management: Tech platforms are expanding the use of whistleblower platforms so that anyone can report ESG-related matters to the company, and the company has a mechanism to review and investigate these issues.
  • Survey and disclosure tools: Including survey and disclosure tools within the tech platform allows the company to engage with employees or partners, conduct surveys and collect disclosures as part of the information gathering that supports ESG programmes.
  • Transparency and reporting: Tech platforms can streamline ESG reporting and increase transparency, making it easier for stakeholders to understand a company's ESG performance.
  • Stakeholder engagement: Technology can also aid in stakeholder engagement, allowing companies to communicate their ESG initiatives and progress more effectively.
  • Data collection and analysis: Advanced tech tools can help companies collect, monitor and analyse ESG data, leading to better decision-making.

Emerging software solutions for ESG management

To assist with managing ESG, companies are exploring innovative tools and platforms and leveraging new technologies.

  • ESG reporting and data platforms: These platforms aggregate ESG data from various sources, enabling companies to track their performance against ESG metrics more easily.
  • AI (artificial intelligence) and machine learning in ESG: AI and machine learning tools are being used to predict ESG risks and opportunities, helping companies make more informed decisions.

How enterprises are effectively utilising tech in ESG

A good example of an effective use of technology is using an ESG system with an embedded incident management/whistleblowing system to solve the supply chain risks of human rights and environmental issues.  

More and more legislation requires companies to give their supply chain and any members of the public a voice to specifically report ESG-relevant issues to the company without fear of retribution and anonymously if preferred.

The rising demand for ESG-related roles

ESG-related job openings in 2024

The demand for ESG-related roles has surged in 2024, reflecting the growing importance of ESG in the business world. Key ESG roles include:

  • ESG analysts – to analyse a company's ESG performance and provide insights to guide decision-making
  • ESG consultants – to help companies develop and implement ESG strategies to improve their performance
  • sustainability officers – to oversee a company's sustainability initiatives, ensuring they align with ESG standards.

Essential skills required for ESG roles

To succeed in these roles, professionals need:

  • an understanding of ESG methodologies – including ESG standards as well as frameworks
  • analytical skills – to analyse ESG data and draw meaningful conclusions
  • communication skills – to effectively communicate with various stakeholders, from employees to investors.

Impact of ESG job growth on the broader job market

The growth in ESG jobs has a broader impact on the job market, driving the demand for ESG skills across various roles and industries.

This trend is likely to continue, further emphasising the importance of ESG competence in the professional world.

ESG services to address the gap: an overview of affordable and effective solutions

The need for ESG services in 2024

As companies strive to improve their ESG performance, many seek external assistance through ESG services.

These services can help companies identify gaps in their ESG performance, develop strategies to address them and monitor progress over time.

Speeki offers a wide range of ESG solutions and services to help enterprises enhance an existing ESG programme or build a programme from scratch.

During the discovery process, Speeki will work with your stakeholders to identify gaps, design and build. No matter what risk area we work on, we apply the same methodology to create a system to manage ESG risk.

Cost-effective ESG services for businesses of all sizes

A range of ESG services has emerged in 2024 to cater to businesses of all sizes.

  • ESG programme assessments and consulting services: These services help businesses develop and implement robust ESG strategies. They can be particularly useful for small and medium-sized enterprises that lack in-house ESG expertise.
  • ESG reporting tools: These tools streamline the ESG reporting process, making it easier for businesses to communicate their ESG performance to stakeholders.
  • ESG training services: These services provide training for employees at all levels of the organisation, fostering a culture of ESG awareness and responsibility.

All companies, large and small, are currently focusing on ESG.  

These companies are looking at ESG because they are required to do so by a law or regulation, are required to do so by a partner/customer/investor, or see the value in ESG and are actively pursuing it. Whatever the reason, there is growth in companies investing in the development of ESG.

The future of ESG: predictions and expectations

Here are the top eight predictions for the next 12 months.

  • Regulatory scrutiny and reporting standards: Expect heightened regulatory requirements for ESG reporting worldwide, with a focus on standardisation and transparency. Frameworks like the TCFD are gaining traction, necessitating companies to disclose their environmental and social impacts more comprehensively.
  • Urgency in climate action: Businesses are under increasing pressure to accelerate their climate action initiatives. This involves a concerted effort to reduce carbon footprints, embrace renewable energy sources, and commit to science-based targets for emissions reduction.
  • ESG reporting assurance: With the increasing emphasis on ESG reporting accuracy and reliability, companies are placing greater importance on obtaining third-party assurance for their ESG disclosures. This trend involves engaging external auditors or specialised assurance providers to conduct thorough reviews and verifications of ESG data, ensuring alignment with reporting standards and enhancing trust among stakeholders in the integrity of the information presented.
  • Social equity and inclusion: The ‘S’ in ESG will gain more prominence, with companies expected to prioritise issues such as diversity, equity and inclusion. This trend reflects a growing societal demand for fair labour practices, human rights protection and equal opportunities in the workplace.
  • Sustainable finance and investment: The realm of sustainable finance is expanding, with a rise in green bonds, sustainability-linked loans and ESG-focused investment products. Investors increasingly use ESG criteria to assess risk, driving companies to enhance their ESG performance.
  • Focus on supply chain sustainability: Supply chain sustainability remains a critical focus area, driven by the need to mitigate risks associated with climate change and ensure ethical labour practices. Companies are striving for greater transparency and resilience in their supply chains through sustainable procurement practices.
  • Circular economy initiatives: The transition to a circular economy will gain momentum, with businesses adopting strategies to minimise waste and maximise resource efficiency. This involves redesigning products for durability, promoting reuse and recycling, and exploring innovative business models.
  • Digitalisation for sustainability: Digital technologies, including AI and the Internet of Things, are increasingly leveraged to advance ESG goals. These technologies enable companies to monitor emissions, enhance energy efficiency, and improve transparency in supply chains and ESG reporting processes.

Final thoughts and encouragement for ESG adoption

All companies need to develop a clear ESG strategy.  

Building a comprehensive strategy and managing its performance adds value for the company and its stakeholders and begins to address the world’s most pressing issues.

Done well, ESG can be a revenue enabler and a value driver.

Speeki is the ESG solution for whistleblowing and reporting for suppliers and the community.

Want to know more? Attend one of our Speeki Academy workshops or reach out to a salesperson for a demonstration.