While global leaders at the COP26 United Nations Climate Change Conference made major commitments to cut methane emissions, end deforestation and shift away from coal, government declarations are insufficient for a sustainable future. Business transformation is needed to ensure global warming is limited to 1.5\u00b0C above pre-industrial levels and securing a just economic transition to a low-carbon economy, where we can live well within our planetary boundaries.<\/p>\n
Leading firms are revamping their supply chains, embracing new forms of financing, and reinventing products and services to ensure that they are future-ready and accountable for their Environmental, Social and Governance (ESG) performance. New government and banking regulations as well as investor scrutiny and supply chain transparency are accelerating this transition. IMD experts identified key trends that will drive further sustainable transformations in business strategies, corporate roles, operations, financing, stakeholder engagement and impact measurement in 2022 and beyond.<\/p>\n
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Businesses\u2019 sustainability strategies are being shaped by big global forces that are likely to become even more important in 2022, according to IMD experts.<\/span><\/p>\n Global leaders at the COP26 Climate Change Conference in Glasgow made major commitments to cut methane emissions and end deforestation with the aim of limiting global warming to 1.5\u00b0C above pre-industrial levels, but here are four other major trends that business leaders need to be aware of.<\/span><\/p>\n <\/p>\n Wealth transfers with purpose<\/a><\/strong><\/p>\n We are in the middle of one of the greatest transfers of wealth in human history, with the next generation (largely Millennials and digital natives) taking over the reins and moving into powerful positions in business and politics. The new generation comes in with a fresh mindset, new ideas and they feel a great sense of responsibility to become agents of change. They are wired somewhat different<\/span><\/span>ly<\/span>\u00a0to their predecessors<\/span><\/span>. It is not uncommon that they express a profound interest in matters of ESG, sustainability, <\/span>philanthropy<\/span> and impact investing. As innovators and entrepreneurs, they dare to take the necessary steps to deploy their own wealth for a greater purpose. They take a more entrepreneurial approach to doing good with a sustainable impact and \u201cbusiness case\u201d long-term viability at the <\/span>center<\/span>.<\/span><\/span><\/p>\n Peter Vogel, Professor of Family Business and Entrepreneurship<\/p>\n Malgorzata Kurak, Postdoctoral Research Fellow at the Debiopharm Chair for Family Philanthropy<\/p>\n <\/p>\n Activist investors drive systems change with proxy voting<\/a><\/strong><\/p>\n Activist investors increasingly\u00a0<\/span><\/span>are\u00a0<\/span><\/span>using proxy votes to drive systems change and encourage companies to disclose and improve their commitments to people,\u00a0<\/span>profit<\/span>\u00a0and planet.\u202f<\/span><\/span>In a milestone of what\u2019s come to be called \u201cstakeholder capitalism\u201d, Nia rallied 94.3% of the proxy vote in April 2021 to force IBM to release data on the effectiveness of the company\u2019s diversity,\u00a0<\/span>equity<\/span>\u00a0and inclusion (DEI) programs.\u00a0<\/span>With 467 shareholder resolutions on ESG issues already proposed in 2021 in the US alone, shareholder activism is poised to grow next year and beyond. BlackRock, the world\u2019s largest asset manager, agreed to give its investors the ability to vote on shareholder proposals, which by some estimates would transfer votes to investors representing as much as $1.5 trillion in indexed assets.\u00a0<\/span><\/span><\/p>\n Vanina Farber, Professor of Social Innovation and Entrepreneurship<\/p>\n <\/p>\n