Aftermath, or Prelude? Six Predictions and Prognostications Impacting Sustainable Business in 2021

January 20, 2021 EcoVadis ‏‏‎

As we prepare to say goodbye to 2020 and welcome 2021 with open arms, we have been thinking about the major sustainability trends and advancements we expect to see in the coming months. While the coronavirus crisis continues to unfold, the spotlight intensifies on the pressing need to revamp sustainability efforts in the supply chain, and the new year provides a perfect time to do so. To put it simply, there is a lot of work to be done -- so we broke down what we predict to see in 2021.

  • Organizations will prioritize Scope 3 (value chain) emissions reductions to drive lasting climate action. To date, attention has been focused on reducing Scope 1 and 2 emissions. In 2021, more companies will realize that making measurable progress is not possible unless they reduce emissions across the value chain. The trend will be accelerated by corporate and social initiatives (e.g. major businesses committing to SBTi and setting targets in line with the Paris Agreement), new regulations (e.g. impending rise in carbon taxes in Europe) and increased constraints on fossil fuels.
  • Diversitywashing will become the new Greenwashing. Consumers, investors and stakeholders will focus less on surface-level diversity issues and require companies to provide complete transparency into workforce and supply chain practices and behaviors. Minority ownership labels will become less important in sourcing and investment decisions – emphasis will be placed on workforce diversity, how employees are treated, and commitments to diversity, at both the brand and supplier level.
  • The “Visible Hand” will return. The next 10 years will bring more sustainability regulations as legislators are asked to use their power to improve sustainability outcomes not only within their own jurisdictions, but across global value chains. The tone will be set in Europe with the EU Green Deal, and in North America with the U.S.’ expected return to the Paris Agreement. The Visible Hand will expose the sustainability laggards, forcing them to change to survive, while further propelling first movers and leaders forward giving them the advantage around investments, M&A, growth, and earnings. 
  • Blockchain will lose some supply chain luster. The market will finally conclude that blockchain isn’t a magical solution for solving supply chain visibility issues. Instead, more resources will be invested into supplier engagement, collaborative improvement and incentive-based management. The goal will shift away from instant visibility and toward building long-term, concentric layers of performance improvement, with suppliers implementing sustainable approaches and pushing the requirements and learnings upstream.  
  • The economic fallout of COVID-19 will put social practices to the test. During the initial outbreak, focus was (rightfully) placed on worker safety. Then, after a few months, thousands were left either unsupported, or overworked by employers, putting supply chains at high-risk for human rights issues. Next up is the economic hangover– with many industries looking at multi-year recoveries and immense pressure to perform. Large, global companies, especially those in slower recovering sectors, must be extremely attentive to their suppliers and increase focus on human rights and social issues to ensure corners aren’t cut to survive.
  • The rise and redefinition of resilience will shift supply chain optimization from just-in-time to just-in-case, elevating sustainability approaches from resilience to performance. The pandemic has made people rethink what they do and how they do it, with a significant pivot toward resiliency. In 2021, more organizations will discover that the popular approaches from 2020, like supplier diversification and near-shoring, don’t address the core of the issue. Real resilience requires organizations to revamp their sustainability management programs with a focus on supplier relationships, continuous improvement and long-term performance

A lot changed over the course of 2020, but one thing is for sure: our annual conference, Sustain, changed forever when we saw 1,600 virtual attendees interacting with over 50 experts and leaders after the last event went virtual. 

We’re excited for the fully virtual Sustain 2021 where you’ll have the opportunity to engage and hear new insights, discuss innovative solutions and partnerships, and connect with peers and experts across multiple regions. Registration is now open! Interested in becoming a speaker for Sustain 2021? Submit your proposal today.

We hope to see you there!

About the Author

EcoVadis ‏‏‎

EcoVadis is the world’s most trusted provider of business sustainability ratings, intelligence and collaborative performance improvement tools for global supply chains. Backed by a powerful technology platform and a global team of domain experts, EcoVadis’ easy-to-use and actionable sustainability scorecards provide detailed insight into environmental, social and ethical risks across 200+ purchasing categories and 160+ countries.

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