Real change requires real commitment, not just buzzwords. While the past two years have been a tumultuous time that saw the world experience the ebbs and flows of an ongoing pandemic that cost millions of lives, caused untold economic damage, impeded climate progress and introduced entirely new challenges to an already difficult time, action and accountability will be imperative in 2022 and beyond to ensure the Decade of Change earns it name.
The promising proposals that came from governments around the world at COP26 held at the end of last year offered some hope, but research released during the conference shows that the plans that countries have laid out so far for reducing emissions (known as Nationally Determined Contributions or NDCs) still add up to 2.4C of temperature rise by the end of the century.
To put this in context, crossing the 2 degrees threshold is enough to put over 1 billion people under extreme heat stress; bleach over 99 percent of coral reefs; double the extinction of plant species and intensify the melting of sea ice in summer by 10 times, fuelling up to 6 metres of sea level rise in vulnerable parts of the world.
As the Maldives Environment Minister, Aminath Shauna, stated baldly in the final plenary: “The difference between 1.5 degrees and 2 degrees, for us, really is a death sentence.”
In short, we need to act faster and we need to act together, particularly considering that COP27 will be held in Egypt this year, which is situated in one of the most vulnerable regions in the world, impacted by water and food insecurity.
Governments will return to the table to November in a country whose citizens face an existential threat to their survival, and must answer one equally existential question: “Have we done enough?” Seeing as COPs aren’t just about the drama of the negotiators inside the halls, the answer to that question would only be yes if people around the world participate in making it so.
So, what next? Can we get out of this mess? The short answer, thankfully, is yes, but we need to place people at the heart of climate action and mobilise businesses as well as civil society and not just wait for governments to act, as it seems the path to a future that is kinder to people and the planet, is increasingly being led by businesses, not politicians.
Companies and countries will have to start making their action plans public of how they will be net zero by 2050. They will need to be account for natural and social capital, and improving the wellbeing of all the people that touch their value chains.
Those who persist in treating climate change solely as a corporate social responsibility issue – rather than a material risk for the business future – risk repeating classic stories of market failures such as Kodak failing to address the threat of the digital camera or Nokia dismissing the rise of the iPhone.
Brands are increasingly looking for purpose, but consumers are looking for trust – brands that reflect their values. “Consumers across generations will stop buying you if you are not promoting social and or environmental sustainability. Brands must rethink their entire value chain,” said Felix Kreuger, associate director, fashion and luxury at Boston Consulting Group. It is this simple: brands that refuse to embed sustainability throughout their entire business will be left behind.
In 2022, we predict that leading companies will seize trust to benefit the planet, empower the organisations and individuals they serve, and seize the opportunities presented by new business models.
Many companies will welcome a new chief trust officer reporting to the CEO, a role that should be aligned with other C-suite roles such as the Chief Sustainability Officer. The role will have heft, with responsibilities that initially span board advisory, technology, climate risk, and governance but will quickly include more human-centred aspects of trust like brand strategy and corporate values.
We also predict that the number of firms committing to transition to a climate economy will increase exponentially. With intensifying expectations and scrutiny, environmental sustainability has become a highly visible driver of trust levers, particularly empathy, integrity, accountability, and transparency.
Companies committing to net-zero carbon emissions by 2040 will increase and we predict that, due to changing consumer sentiment, investor demands, government investment, employee activism, inevitable regulation, and partner pressure, firms will prove their sustainability bona fides not just signing pledges but disclaiming a step-by-step action plan of how they will meet them.
This will trigger significant investment in sustainability management software, for instance: ESG impact accounting.
Positive Luxury’s 2022 Predictions Report comes at a pivotal time, at the onset of a year marked by both great hope and great uncertainty for the decade ahead.
We predict that systemic change is coming – from increased transparency to resilience, new business models to an evolving consumer. The big question is will businesses adapt now or get left behind? That story is not yet written. Let’s hope it’s one about the start of something and not the end.