In 2022, temperatures reached record highs, and a number of climate catastrophes occurred. This has caused an increase in pressure on leaders to tackle business practices that are detrimental to the environment. In addition, corporations are being asked to reveal more regarding their ESG policies and strategies, showing a steady hike in interest and urgency for green businesses to step up.
Ultimately, by 2023, sustainability will be an issue impossible for businesses to overlook. For green businesses looking to advance further and faster than competitors in 2023, here are key trends you should prepare for.
Market Demand For Sustainable Living Options Affected By Inflation
As the cost of living rises globally, and the effects of inflation are experienced more poignantly, support for sustainable lifestyles is also increasingly affected. According to a recent survey, over half of the consumers claim to prioritise affordability over sustainability in their expenses, switching from eco-friendly products back to cheaper but less sustainable options.
However, experts have also predicted the possibility of budget constraints positively impacting businesses’ ability to push for environmentally-friendly measures. As sustainability enters the mainstream, many companies also recognise its potential to create value and attract attention from consumers.
Greenhushing Set To Replace Greenwashing
Instead of greenwashing, where corporations overstate their environmental credentials and green efforts, the new trend for greening business is greenhushing. This is when brands become so afraid of being accused of dishonesty that they won’t even discuss their efforts towards sustainability, despite taking steps in that direction.
Due to the high-profile greenwashing backlash seen in brands like Oatly and HSBC, it is predicted that corporations will be forced to err heavily on the side of caution in terms of reporting environmental efforts. However, this may potentially be a major misstep, especially for B2C establishments, as it can give the impression of inaction and further irritate consumers.
Pressing Need For Transparency
This brings us to the next top issue of transparency and disclosure. Since 2021, the regulations for green businesses have seen a consistent upward rise in quantity and severity. For instance, the EU’s Sustainable Finance Disclosure Regulation (SFDR) which just took effect, requires asset managers and other financial market players to reveal not only the sustainability impacts but also the potential risks of their investment decisions and processes.
Furthermore, environmentally-conscious consumers are also increasingly educated, savvy and serious about these business processes or impacts. Similarly, investors are taking a broader approach than simply focusing on net zero goals, often analysing companies’ policies in depth, from carbon footprint to other green impacts such as biodiversity.
The cumulative effect of these circumstances pushes for green businesses to prioritise clarity, transparency and accountability in order to maintain their reputation and competitiveness in this economy.
Rise of the Circular Economy
Due to the heightened experience of resource limitation and the dwindling supply of natural resources, stakeholders recognition for the dependency we have on the earth and environment is growing progressively. This directly contributes to the surge in investments in circular business models, a trend that is expected to continue well into 2023 as companies strive to eliminate waste and increase resource efficiency.
With the circular economy, instead of focusing solely on producing, consuming and throwing away products, businesses work with materials in ways that minimise environmental harm while increasing economic value. This rise in eco-conscious businesses will see firms integrating the circular economy model across all industries, leading them to focus on reusing, recycling or repurposing existing products rather than simply creating new ones.
Additionally, such efforts will be supported by the development of specific technologies to improve product life cycles. From intuitive software to help organisations track their resources more efficiently to advances in 3D printing for easier repair and recycling, the new year is sure to bring about exciting changes and businesses are advised to keep up or be left behind.
Embracing Change in Green Business
Ultimately, in 2023, sustainability and green initiatives will no longer be merely a marketing trend but an integral part of any successful business model. As such, green businesses need to stay on top of the latest environmental regulations, technology developments and consumer demands if they wish to succeed.
From transparency and disclosure to embracing the circular economy, there is a multitude of ways any brand can make its mark in this progressive sector. By adopting these changes and being well-prepared for the challenges, your business will be able to navigate an uncertain future with ease. After all, the next step in 2023 is most definitely green, so it is best to stay ahead and explore new opportunities.