Organizations credit climate regulations and technology for their sustainability drive

Organizations believe their sustainability initiatives would fall short without regulatory push and the use of climate technology.

According to one report published by Capgemini Research InstituteAbout 65% said their company would not have launched certain environmental sustainability initiatives without regulation. Another 75% indicated that sustainability regulation is necessary to achieve global climate goals.

The study surveyed 2,152 executives from 727 organizations in 13 countries, including Australia, Germany, India, Italy, Japan, the UK and the US. Another 6,500 consumers aged 18 and over were surveyed across the 13 markets.

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Additionally, Capgemini research notes that 69% of organizations expect stricter regulations in the future to be a key driver of sustainability initiatives, up from 57% last year.

However, regulations can also come with challenges. An executive from a major European telecoms company explained that Environment and Society (environmental, social, governance) risks becoming “a mere compliance mandate driven by reporting requirements”.

Sven Jansen, global chief financial officer at Hellmann Worldwide Logistics, added that while the legislation promotes sustainability efforts, the increased workload and significant costs required to comply can create major obstacles for organizations.

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It also boosts companies’ ability to monitor their sustainability performance, with 73% of executives agreeing that the EU Corporate Sustainability Reporting Directive has prompted their organisation to improve its ability to measure and track sustainability.

The study found that 67% of organizations believe they will not achieve their sustainability goals without the help of climate technology. In particular, 69% point to the important role that data and digital technology play in accelerating the adoption of climate technology.

65% said their organization used artificial intelligence reproduction (Gen AI) to achieve its sustainability goals. That’s up from 56 percent last year who said the same, the study noted.

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Another 57% noted that Gen AI’s impact on sustainability is a topic of discussion in their boardrooms, with 67% believing that the benefits of Gen AI outweigh the negative impacts. Impact of technology on the environment.

Quote a separate July 2024 AI Gene ResearchCapgemini says a third of organizations are now tracking energy and water consumption, as well as carbon emissions, related to the use of AI technology.

In fact, 68% say 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 was on track to meet its carbon emissions targets, while 9% admitted they were behind schedule.

Additionally, 65% of executives believe that current geopolitical developments are slowing down sustainable investments. About 69% expressed concern about the impact of the unstable political environment in the United States and other regions on their sustainable investments and projects.

José Antonio Coll from Airbus detailed that “geopolitics has a significant impact on our sustainability investments due to our global industrial footprint and supply chain. As we and our supply chains operate under different regulations in different countries, we conduct risk management audits to ensure we are operating sustainably, focusing on how and where we source materials responsibly. Additionally, we work with multiple ministries of defense, so export controls and due diligence are important depending on the geopolitical context.”

And despite efforts by organizations to reduce their environmental impact, consumers are increasingly skeptical of such initiatives.

Capgemini research found that 52% of consumers believe that 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 environmental claims when purchasing a potential product.

That skepticism has not gone unnoticed, with 62% of executives expressing concern that their organization’s sustainability efforts may not be taken seriously by the public.

In fact, 43% of executives believe that consumers view their organization’s sustainability efforts as greenwashing, up from 17% in 2023.