The State of Green Business, 2023

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Joel Makower
January 23, 2023

Following is adapted from GreenBiz Group’s 16th annual State of Green Business, published today, which explores sustainable business trends to watch in 2023. Download the report here.

 

“Stay the course.”

That may be the key message coming out of the convulsing, confounding year that was 2022. For all that those 12 months threw at us — a still-raging pandemic, a global economic downturn, major supply-chain chokepoints, political upheavals, climate-exacerbated natural disasters and a global energy crisis spurred by Russia’s unprovoked invasion of Ukraine — there’s no turning back for sustainability professionals.

Of course, inflation and low economic growth led some companies to tap the brakes, slowing some initiatives, including the increased headcount that goes with companies’ growing sustainability ambitions. But not for long. There’s a general sense that the critical nature of social and environmental challenges, and the risks they pose to companies and society, will keep sustainability a hot-button business issue for the foreseeable future.

Oddly, some of the perturbations listed above have had a salutary effect on progress. The energy crisis laid bare the world’s unsustainable reliance on oil and natural gas from unfriendly nations and led to a ramping up of renewable, homegrown energy sources, notably solar and offshore wind along with fast- growing energy storage technologies. The spiking of gasoline and diesel prices accelerated the uptake of electric vehicles of all types, from e-bikes to big-rig trucks and everything in between. Supply-chain shortages contributed to a relocalization of manufacturing and logistics, driving down the emissions from shuttling things across oceans. Low-input indoor agriculture took root alongside rising food prices and distribution disruptions.

Still, it’s a treacherous, often terrifying time, given the real-world indicators of progress, or lack thereof. And to look only at the positive outcomes belies the immense challenges ahead: more extreme weather disruptions; more dithering by political leaders on decisively addressing the climate, biodiversity and equity crises; more evasive maneuvers by the fossil fuel lobby and its acolytes to delay a global energy transition; more plastics polluting oceans, reservoirs and, ultimately, our bodies. And more corporate commitments and pronouncements unmatched by actual, or at least sufficient, progress.

It’s another round of the sustainability cha-cha: two steps forward, one step back.

To be sure, the dance can be invigorating. Breakthroughs in decarbonizing energy production; high-performance chemicals and materials made without fossil fuels; new generations of plant- and cell-based meat alternatives; building technologies that enable healthier, more adaptive workplaces — these and many other advances have inspired us and promise positive economic and sustainability outcomes in the coming years.

And it’s not just scrappy entrepreneurs who are leading the charge, though there is no shortage of those. Many of the world’s largest companies, from furniture-makers to food producers to fashion houses, are developing or acquiring technologies that can accelerate their own transitions to more sustainable products, services and delivery systems.

In short, much of the sustainability wish list is coming to fruition — gradually, then suddenly, as Ernest Hemingway once put it. At last, biodiversity and natural capital are being recognized as critical inputs to business and industry; healthy ocean ecosystems are linked to climate mitigation and resilience; the financial sector, from insurance to banking to venture capital, is awakening to a post-oil future; and forthcoming transparency and disclosure frameworks promise to help separate leaders from laggards.

And despite a small but noisy cabal of right-wing ideologues in the United States, stakeholder capitalism is alive and well, as companies and mainstream investors increasingly view environmental and social issues not as some social engineering conspiracy but as activities critical to business and macroeconomic success. What some dismiss as “woke capitalism” is seen by many business leaders as waking up to 21st-century realities.

 

So, where does that leave us? What can we expect from 2023?

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