Climate action to propel energy sector globally in 2024

2024 is already set to be a significant year globally, whether it be due to political milestones like the US and UK elections, biodiversity playing a growing role in the energy sector and beyond or women’s crucial position in resolving the green skills gap.

Rachel Delacour, Co-Founder and CEO of Europe’s leading carbon management and reduction platform Sweep, highlights how pivotal the next 12 months will be regarding climate for businesses, and lays out five predictions on how energy and climate action will be propelled in the new year.

Prediction 1: Election results will not impair business progress on climate action 

Although climate will be a bipartisan issue at the UK and US elections, public sector decisions will not impact private sector climate progress, as companies buy into the evidence that building sustainable businesses is essential for a competitive edge and, ultimately, longevity.

As the UK lags behind Europe and the US on climate goals, the victorious party next year will likely look to revitalise the nation’s climate plans. Coupled with heavy climate regulation on the continent, businesses with long-term goals should continue to prioritise climate progress. 

In the US where compliance is not a legal requirement for companies, and the pushback against ESG is set to make climate regulation more challenging, corporates will continue to take action to avoid reputational costs, irrespective of election results.

Prediction 2: Women will continue to lead in climate and resolve green skills gap

There has been a six-fold increase in hiring for green roles in the UK in the last four years, meaning there is a green skills gap. This shortage will be resolved largely by women who have historically taken on more people-oriented roles within companies. As the need for climate skills grows and new green jobs emerge, women are best placed to step up into leadership positions across companies. 

Women’s participation and leadership in climate action is associated with better resource governance, conservation outcomes and disaster readiness. In the private sector, more gender-diverse corporate boardrooms and C-suites have been shown to lead to more sustainable policies. 

Prediction 3: C-suite will see more incentives to take climate action as revenues impacted 

CEOs will start to accept that business success will largely depend on the way they deal with climate action today. As a result, more executive level boards will look to offer incentives on climate action through salary structures. Funding will also become more dependent on a business’s sustainability rating, something already happening in France where public procurement requires businesses to be sustainable (Cf PJL Industrie Verte). Reputational and penalty risks for non-compliance with climate regulations, including the CSDR, could also cost businesses up to €10 million (US$10.9m) from next year. 

Prediction 4: AI will accelerate climate action, but only with the right climate team

Innovations surrounding AI in the climate tech sector will transform climate action, including how emissions are calculated by accelerating and streamlining the process. This will enable companies to get more precise data on their ESG footprint allowing them to act quickly across their supply chain emissions.

While AI can jumpstart and scale your climate data analysis, it is essential to have the right team in place that understands the technology in order to effectively use it. Chief Technology Officers and Chief Sustainability Officers will more closely collaborate to best utilise new technologies such as AI and avoid tech infrastructures which contribute to higher emissions.

Prediction 5: Biodiversity will become vital component of all climate strategies

While carbon has dominated sustainability discussions for years, 2024 will witness a pronounced focus on biodiversity and corporate nature-related disclosures. In the UK, developers in England will be required to deliver 10% ‘Biodiversity Net Gain’ from January 2024 onwards.

With planetary biodiversity in crisis, businesses will be compelled to evaluate their water and land usage and track their impact on ecosystems. Businesses and financial institutions will struggle to find universal metrics to track biodiversity and integrate biodiversity policies into ESG policies. Sustainability leaders will need to equip themselves with tools to measure their multidimensional impact on biodiversity, with Mean Species Abundance (MSA) emerging as a potential metric used by financial actors.

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