In 2023, Forrester published our inaugural sustainability predictions. Our predictions covered some of the most pressing global issues of environmental sustainability, including greenwashing, carbon offset investments, and standards. Our aim was to try to predict how enterprises would be affected by environmental sustainability while avoiding the obvious, unquantifiable, and extravagant. In the waning months of 2023, let’s revisit our predictions for 2023 as we enter predictions season for 2024. We used the following grading system to score our predictions:
A = Prediction was spot on
B = Prediction did not fully come to pass or was ahead of its time
C = Prediction faced external challenges in implementation that mitigated progress
D = Prediction failed to make any progress
F = The opposite occurred from the prediction
This year, one of our five predictions received an A score, three received a B score, and one received a C score. Considering several unanticipated economic challenges across industries, these scores indicate continued progress and opportunities in the green market revolution. Specially, we predicted that:
- At least 10 companies will incur $5 million or more in greenwashing fines. Score: B. Leading up to 2023, we saw an unprecedented rise in watchdogs and regulations around the world that scrutinized the way organizations reported their carbon footprint and talked about commitments publicly. Greenwashing and greenwashing scrutiny has increased in 2023, but although there have been many identified cases of greenwashing and some legal action taken, most cases take a long time to be processed. All of this has also accelerated a “green-hushing phenomenon” in which firms communicate less or go silent. According to Forrester’s Q2 2023 B2C Marketing CMO Pulse Survey, 84% of US marketers would like to communicate more on their green initiatives but fear greenwashing; this is up from 76% last year. We anticipate that regulations will carry more teeth in the coming months and that penalties for greenwashing will come from consumers as they backlash against brands that misconstrue their efforts as much as from regulators. This prediction did not fully come to pass and is certainly ahead of its time, getting a score of B.
- Five Fortune Global 200 firms will announce policies limiting travel for sustainability. Score: C. Among some of the largest companies in the world, organizations with a significant contribution to their scope 3 emissions from business travel, including service providers, announced subtle changes to their work policies to take advantage of remote work possibilities. External factors, however, such as the economic slowdown, meant that organizations prioritized reaching pre-pandemic-level growth. This came at the expense of rolling back some of the advantages they received from remote work in their scope 3 emissions. On the other hand, 2023 saw an unprecedented push for organizations in retail, travel, and logistics industries to adopt electric vehicles, including Amazon and Walmart, which announced plans to install an electric-vehicle charging station network. This prediction certainly faced external challenges in economic uncertainties to fully come to fruition, gaining the score of C.
- Carbon offsets and credits will be back in fashion but with less fraud. Score: B-. In 2023, we saw sustainability management software vendors begin to offer carbon credit marketplaces in their platforms to provide their clients with the ability to make safe decisions on carbon offsets. 2023 did not see improvement in fraud, however, as many carbon offset fraud allegations and many flaws in offset strategies and offerings were rightfully called out. Offsets remain a viable method for some industries to reduce their environmental impact, but caution is still required to invest in the right offsets for the right reasons. Since offsets saw an increase in verified marketplaces but fraud surfaced rampantly, this prediction gets a score of B-.
- Investment firms will spend $20 billion to address lithium battery shortcomings. Score: A. Several market indicators pointed to heavy investments in battery technologies across the battery value chain. According to energy storage news, venture capital funding for battery storage recorded in the first half of 2023 was up 27% year on year. In the first half of 2023, $3.8 billion went into the sector from 43 deals. The outlook for battery production and market needs continues to be robust and is projected to grow at least until 2030. All of this points to steady growth in demand for batteries and a continued rise in investments across the entire supply chain for battery manufacturing, giving this a score of A.
- One standard will claim supremacy for greater transparency in carbon reporting. Score: B. This was our boldest prediction, and we are happy to report positive strides toward a more unified standard for enterprises doing carbon reporting. In August 2022, the International Financial Reporting Standards (IFRS) Foundation assumed responsibility for SASB Standards when it merged with the Value Reporting Foundation, and in 2023, the Task Force on Climate-Related Financial Disclosures was absorbed into the IFRS Foundation. Parallelly, the EU’s Corporate Sustainability Reporting Directive has the potential to consolidate corporate sustainability reporting, including carbon reporting, in Europe and beyond. The ideal state of a global standardized framework that caters to multiple industries and organizational needs, however, is still further away in time, giving this prediction a score of B.