News Year in review 2023

Trends that will shape sustainability in 2024

Chinese tech giant Tencent's AI digital humans are being used as virtual influencers, interpreters, and sportscasters.
By Hannah Alcoseba Fernandez

Dec. 28, 2023

Two wars raging and geopolitical tensions escalating globally did not stop businesses
from adopting innovations and making improvements to strengthen their supply chains
this year.
Generative artificial intelligence (AI) burst onto the scene as ChatGPT became the
world’s most popular AI platform, attracting 100 million users just two months after
its launch. But as businesses embrace the technology to increase productivity and cut
costs, there are now widespread calls to protect and support workers, to make sure that
automation improves the workplace and does not end up threatening jobs. These
efforts are likely to continue.
Electric vehicle (EV) adoption is rising quickly in emerging economies like India,
Thailand and Indonesia, where low-cost models are driving demand.
Stricter regulations have prompted corporates to keep track not just of their direct
emissions, but also those from their suppliers and end-users.
Eco-Business identifies five major trends that will shape business and society in 2024.
1. Heightened call to protect workers amid latest wave of AI innovations
Rapidly advancing technology has not driven conversations as significantly as
generative AI has in the past year.
By showing how it can write a science fiction novel in a few hours to being able
to interact with clients in various languages, ChatGPT has stirred controversy as it
threatens to displace as many as 300 million jobs via automating them.

Artists and illustrators in the US are using the hashtag #artbyhumans as a form of
silent protest against the surge of AI-generated images. Image: No to AI Generated
Images
A survey in September by London-based market research firm Mintel Trends studied
global consumer behavior and found that half of the respondents in Asia Pacific worry
that AI will make their jobs obsolete, despite 57 per cent saying they know little about
AI.
In the same analysis, 69 per cent of respondents said they were opposed to buying
from companies who behave unethically by misleading consumers and mistreating
employees, while 73 per cent said companies should do more to address inequality
like fair pay and support for vulnerable populations.
These findings signal a “strong moral thread” across the region that indicates that
protecting the rights of workers against inequality and mistreatment will increasingly
become the norm, said Matthew Crabbe, Asia Pacific director of Mintel. This includes
looking into how jobs could potentially be threatened by modern technology,
“A new ‘human-as-premium’ label will emerge, giving greater influence on artisans
who can take on the creative spirit that exists outside of an algorithm,” said Crabbe.
“As more businesses embrace AI to increase productivity and cut costs, there will be
widespread calls to protect and support workers, rather than make them redundant.”
Consumers will need time to adjust and learn how to make technology more
applicable at the individual level, sparking new discussions and innovations around
how to be intentional about blending the digital and the physical, Crabbe added.
2. EV fast tracking in developing Asia
Sales of EVs in China have soared in recent years, representing around a quarter of the
world’s market. In the home front, China’s Hainan province has set Asia’s most
ambitious target to phase out sales of traditional vehicles by 2030.
However, unlike solar technology, which with its cheap price makes it an attractive
investment, EVs have not made as much impact to the rest of the developing world
due to comparatively high purchase prices and a lack of available charging
infrastructure.
At COP28, 56 wealthy governments, including the United Kingdom, Sweden and
Germany pledged international assistance spanning finance, supply chain development
and technical expertise for emerging markets with the ambition of making EVs the
“most affordable, accessible, and attractive option in all regions by 2030”.

But even without this foreign assistance, countries in developing Asia like Thailand,
Indonesia and India are determined to build their own EV industries as alternatives to
China.
EVs are already nine per cent of cars sold in Thailand, boosted by a US$1.44 billion
plant built by Chinese EV giant BYD in the province of Rayong, which will become
operational in 2024.
Thailand, Southeast Asia’s largest car producer and exporter, has
offered incentives including tax breaks and subsidies to attract EV makers and
stimulate demand.
Indonesia, which holds the world’s largest nickel reserves that is vital for the
production of EV batteries, has been determined to leverage these resources to build a
domestic EV supply chain. It has aggressively courted foreign car and battery makers
through relaxed investment rules.
India now has millions of EV owners, with popular motorbikes, scooters and
rickshaws representing more than 90 per cent of the vehicles.
The market’s growth is due in part to a US$1.3 billion government scheme to
encourage EV manufacturing in the country and provide discounts for customers.

3. Scope 3 disclosure in the spotlight

The proportion of global emissions covered by companies with a target including Scope 3 emissions
reductions has more than doubled since 2019, but only represents a third of all companies reporting a target.
Source: CDP Corporate Environmental Action Tracker 2023

There will be more expectations from companies to focus on disclosing not just direct
emissions from their value chain, but also their Scope 3 or indirect emissions from
suppliers and end-users, said Ivan Li, director of strategy and implementation, Asia
Pacific for energy consultancy ENGIE Impact.
Li cited a 2023 report of the CDP’s Corporate Environmental Action Tracker which
revealed how the proportion of global emissions covered by companies with a target
including Scope 3 has more than doubled since 2019,
“It’s a sign that companies are waking up to the importance of tackling indirect
emissions and actively taking steps to reduce their overall environmental impact,” he
said. “Businesses are also gaining a clearer understanding of how addressing Scope 3
emissions is crucial in their journey towards achieving net zero. We expect companies
to face increased scrutiny and pressure to step up and provide more comprehensive
reporting in 2024.”
A significant part of this increased attention can be attributed to new legislation
enforcing stricter environmental reporting guidelines and sustainability practices, he
added.
In June, the International Sustainability Standards Board (ISSB) published its
disclosure standards, which cover general sustainability concerns (IFRS S1)
and climate disclosures (IFRS S2).
The heightened scrutiny from government bodies and key stakeholders are prompting
corporates to take proactive measures to enhance transparency. Many are opting for
voluntary reporting structures, demonstrating their commitment through avenues like
pursuing the approval of science-based targets by the Science Based Targets initiative
(SBTi), which mandates reporting on relevant Scope 3 emissions.
4. Guidance away from greenwashing

Starbucks Korea has been recognized by the government for its low-impact recycling of its coffee grounds.
Image: Mintel

Trust and reassurance will add a new layer to environmental, social, and corporate
governance (ESG) initiatives as corporations adopt climate adaptability in their
business practices, said Mintel’s Crabbe.
Mintel found that 74 per cent of those surveyed in Asia Pacific expect brands to take
the lead on addressing environmental issues and spearhead climate solutions instead of
relying on decades-long plans on carbon reduction made by governments and
institutions.
“Consumers sense that many companies are not being clear about what they are doing
to have a positive climate impact, and the positive effect their actions are having.
People want to be more sustainable but lack information on how to do that. Brands can
make this easier by being more transparent,” said Crabbe.
They can do this by explaining how they reduce food waste, energy and water use,
packaging waste in their products, and how they are working towards adopting a
circular economy business model, or how they are putting a certain amount of their
profits back into sustainability efforts or supporting ethical organizations, he added.
5. Will election fever in Asia impact the sustainability agenda?
For the first time ever, there will be 40 national elections all over the world in the
coming year, a quarter of which will be in Asia.
But observers have said that incoming administrations are likely to continue the
policies of and hold similar stances on climate change as their predecessors.
Indonesia’s wildly popular leader Joko Widodo had prided himself on his move to ban
nickel ore exports three years ago as a successful way to grow the local smelting
industry and provide better welfare for the country. He expects his successor to
continue the program.
But Rere Christanto, manager of mining and energy campaign of Indonesian Forum
for the Environment (WALHI), said that neither Widodo nor any of the presidential
candidates speaks about the impacts of the downstream nickel industry in Indonesia,
such as loss of forest areas, high crime rates and the violation of local environmental
laws by corporations in the nickel sector.
“I think it is dangerous that none of the presidential candidates have spoken openly
against environmental destruction and threats to communities from the nickel
industry,” said Rere.
“Parties supporting the candidates also previously had a track record as proponents of
mineral and coal laws which are the basis for accelerating damage caused by mining
in Indonesia.”
The same is the case in India where frontrunner prime minister Narendra Modi
has promised 500 gigawatts of clean energy before 2030, but has said little about
reforms for coal. Elections are unlikely to change that, say observers.
Are there other emerging trends that we have missed? Let us know by writing to
[email protected]. This story is part of our Year in Review series.

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