2023 Outlook Through the Sustainability-Tinted Glasses
What sustainability trends should you be on the lookout for as we greet the New Year?
We are currently living in an era of increased environmental awareness. As we slowly acknowledge the actions needed to be taken to combat climate change, we also begin to identify corporations that need to be held accountable. Many household names are paving the way for environmental action, for example, by adopting EVs into their operations. In 2022, we saw an increase in emission-reduction-related legislation brought in by the EU and US states like New York and California. We witnessed an increase in net zero pledges from businesses and organizations. There is a clear trend happening here and it is difficult to ignore. With this current legislative wave, the purge is coming for those not taking climate action and 2023 is the year that may lead to ignorant businesses being called out.
In 2023, it’s the “Year of the Wood Rabbit” and additionally many anticipate it to be the year of the Electric Vehicle. The electric-car market is anticipated to gain even more traction in 2023 than it did in 2022.
Let’s examine the sustainability forecast for 2023.
- Increased Market Push
Many businesses are turning from words to realities when it comes to environmental responsibility. To boost revenue, appease investors and regulators, and enhance their reputation, they are creating sustainable goods and services as well as supply chain operations, by adopting EVs. They also save money on pollution, resource, and energy usage while reducing their environmental impact thanks to these strategies. Growing energy insecurity, fast-evolving regulatory requirements, and expanding reporting standards have also contributed to this trend.
It is clear to see that sustainability is becoming more important for businesses. It currently affects all sectors of the economy and all sorts of industries. As investors look for new investment opportunities with long-term growth, they realize that polluting-centric industries like the oil industry will have a low return on investment in the future as environmental legislation is becoming more pressured. This is why current investors are focusing on businesses’ ESG when making decisions. Similarly, consumers are increasing their awareness of the environmental impact and taking a business’s sustainability measures into consideration. With all this in mind, a business that may be seeking further investment or is simply looking to develop long-term growth, should be focusing on its environmental impact and reporting now more than ever.
2. Growing Environmental Legislation
A huge win in the fight against climate change was achieved in August 2022 when California officials established regulations that forbid the sale of new gas-powered cars by 2035. Similar laws quickly joined in New York. The European Union also followed this legislation in efforts to transform the transport sector to carbon-neutral by 2050. Now, in the new year, Canada is following the likes of New York closely by also slowing the sale of gas-run cars.
Following the COP27 United Nations Climate Change Conference in Egypt, a report was released to combat firms greenwashing. The report aimed to draw a line under misleading statements that can deceive investors, customers, and decision-makers.
“Too many of these net-zero pledges are little more than empty slogans and hype”, group chair and Canada’s former environment minister, Catherine McKenna, said during a news conference launching the report. “You need to walk the talk, you need to deliver on it.”
With complications in terms of reporting, ESG investors and rating agencies are holding firms accountable for their sustainability records.
This year, the journey continues as even more emissions legislation is being released. New regulations being introduced make past U.S. Environmental Protection Agency regulations seem modest in contrast. Just before Christmas, the EPA unveiled “the strongest-ever national clean air requirements” to reduce heavy-duty truck emissions commencing with the Model Year 2027. It is claimed that these measures are 80% more stringent. The California Air Resources Board (CARB) plans to implement even stricter requirements. This is the ACT rule intended to control emissions. The California regulations have been implemented by Washington, Oregon, New Jersey, New York, and Massachusetts, with presumably more to join.
3. Stronger Focus on Supply-Chain Emissions
Many organizations that have made commitments to achieve net-zero sustainability targets by 2050 or similar targets are making significant efforts to do so. These include Scope 3 emissions, which originate from their bigger value chain rather than from their own operations. A factor that is often overlooked is that 90–99% of a company’s greenhouse gas emissions often fall under Scope 3. Many individuals who are attempting to reach net zero are understanding that, in order to do so, they must look beyond their regular business operations. Third-party logistics companies are looking into electrifying their fleet to satisfy the needs and goals of their clients.
4. China Dominating EV Boom
Chinese automakers are responsible for three of the top five EV brands, and the country’s EV market has advanced significantly over the past several years due to major production increases. BYD, a Chinese automaker, has also paved the way to the auto markets in Europe, Japan, and South America in 2022. The domestic sales volume for BYD has increased by more than three times from a year ago thanks to increased national subsidies. With its solid domestic EV supply chain that produces everything from batteries to car electronics to vehicles to car software, China is predicted to play a more prominent position this year in the EV industry, which is backed by strong local demand.
5. Phase-out of ICE Vehicles
As mentioned before, the European Union (EU) will no longer allow the sale of new automobiles using internal combustion engines by 2035. Reinforcing this, Mercedes-Benz claims to be ready to market only electric vehicles by 2030. BMW announced that before the end of the decade, it would introduce at least six all-electric cars. Beginning in 2023, Hyundai Motor Norway will solely provide completely electric, zero-emission vehicles for sale in Norway. We are likely to anticipate even more automakers to follow in the coming years, making gas-powered cars a distant memory in the future.
6. Rising Momentum for Electric Vehicles
The transition from gas engines to electric engines is costing the auto industry more than $515 billion, which demands extensive manufacturing, supply chain, and battery knowledge. Venture capitalists believe that advancements in battery supply chains and manufacturing will further increase the success of the EV drive, particularly in the US. This will result in the EV industry growing even further in the new year. All the industries that EVs are reliant on, like battery production and charging infrastructure, will ride the wave and also grow due to the increased interest. According to Bruce Cheng, the founder of Delta Electronics, global EV penetration is predicted to increase to 40% by 2030, and there will be 26 million EVs worldwide by that time.
The current market emphasizes the pressure on businesses to boost their sustainability agenda and decrease their environmental impact. More than ever before, corporations are in the spotlight to address their influence on climate change. With the current controversy over greenwashing, businesses are under threat of being outcasted if they don’t address the need for environmental action. This year is the final chance businesses have to get on top of the sustainability effort before it’s too late and their competitors are ahead of the race.
EVE offers analytics software that works directly with each vehicle to capture, analyze, and enhance data points to understand where an EV has been charged, what the associated costs were, and which emissions have been emitted in the process. EVE supports you in reaching your sustainability goal by electrifying your fleet faster and at a lesser cost.
For more info, contact us at HI@EVE-APP.EU or visit our Website www.eve-mobility.io.
EVE is an e-mobility intelligence company enabling organizations to transition to a more sustainable future and contribute to reducing emissions to achieve a net-zero economy. We provide cutting-edge technology-enabled tools to measure and optimize sustainability & e-mobility efforts for a clean future.
