AWorldin1Balance2023AWorldinBalance2023:HeightenedsustainabilityawarenessyetlaggingactionsHEIGHTENEDSUSTAINABILITYCapgeminiResearchInstitute2023AWARENESSYETLAGGINGACTIONS#GetTheFutureYouWant3AWorldinBalance2023:HeightenedsustainabilityawarenessyetlaggingactionsAtthecoreofthisreportliethetwinpillarsofenvironmentalandsocialsustainability,articulatingtheprofoundsignificanceoftheseintertwineddimensions.Thisthematicrouteechoestheparamountimportanceofnurturingbothaspectsinunison,mirroringthesymbioticrelationshipthatunderpinssustainability.Throughthevisualimagerypresentedwithin,weaimtoconveythenotionofequilibriumandcoexistence,highlightingthedelicatebalancethatisessentialforsustainableprogress.ThecoverimagedepictsacranberryharvestinNorthAmerica.Thereisonlyoneharvestseasonperyear,frommid-SeptembertoearlyNovember,whencranberriesreachtheirpeakcolor.CapgeminiResearchInstitute20234AWorldinBalance2023:HeightenedsustainabilityawarenessyetlaggingactionsExecutiveHumanactivityisexertinganunprecedenteddestabilizingDespitetheimprovedsentimentonsustainabilityandclaritySummaryinfluenceonEarth'sclimateandecosystems.Notonlyhavearoundthebusinesscase,investmentinsustainabilityhasnotsixofthenineplanetaryboundariesbeencrossed,butweareincreasedin2023.Ourresearchrevealsthatorganizationsedgingeverclosertotheremainingthree,riskingirreversiblecontinuetofallshortintermsofreportingonenvironmentalchangeandharmtoourecosystems.1,2sustainabilityinitiatives,especiallyinmeasuringandcollectingScope3emissions.Similarly,actionaroundInlastyear’sfirsteditionofourannualAWorldinBalancesustainableproductdesignhasbeenlessthanimpressiveresearchseries,wefoundthat,whileorganizationssincelastyear’sresearch.Therearepocketsofprogress,acrossindustrieshavesetlong-termtargetsforachievinghowever,indefiningsustainabilityprioritiesandredesigningenvironmentalsustainability,limitedimplementationisbusinessmodels.Infact,57%ofexecutivessharedthattheirvisibleontheground.Our2022researchrevealedthatmanyorganizationisintheprocessofredesigningitsbusiness/executivesremainedunclearastothebusinesscaseforoperatingmodeltobemoresustainable,upfrom37%insustainability,regardingitasanunwelcomecostdriverrather2022.Biodiversityisalsobecomingmoreofafocusforthananinvestmentopportunity.Aroundhalfofrespondentsorganizations.Withsuchsignificantimprovementsthisyearbelievedsustainabilityisanon-viableoption,withthecostsinthesustainabilitysentiment,weexpectinvestmentandinvolvedinpursuingitoutweighingthebenefits.moresustainedactiontofollowsuitinthecomingyearortwo.In2023,likelydrivenbytheincreasingincidencesofextremeweatheraroundtheworld,coupledwithmorestringentImportantly,socialsustainabilityismovingupthecorporateregulation,thishasbeguntochange.Moreexecutivestodayagenda,withoverhalfofexecutives(56%)sayingtheirsaythesustainabilitybusinesscaseisclear;infact,thisorganizationisincreasinglyfocusedonthesocialdimensionpercentagehastripledinthepastyear,from21%in2022ofenvironmental,social,andcorporategovernance(ESG),to63%.Morealsosaythatthebenefitsofsustainabilityoutweighthecostsandviewsustainabilitymorepositivelythanassimplyafinancialobligation.CapgeminiResearchInstitute20235AWorldinBalance2023:Heightenedsustainabilityawarenessyetlaggingactionswithorganizations’ownemployeesbeingtheprimaryLastly,ourreportsharesrecommendationsforsustainabilitybeneficiaries.Ourresearchrevealsthatorganizationscanleaderstoaccelerateenvironmentalandsocialinitiativesdomoretosupportworkersinthesupplychain,asonlyfrompositiveperceptiontosustainedaction:38%currentlyrestrictglobalsupplierstothosewhopayaExecutivelivingwage.Theycanalsoexpandtheirrangesofaccessible01EnsuresustainabilityisaboardroomprioritySummaryproductsandservicestobemoreinclusivetopeoplewith02Embedsocialsustainabilityinthesustainabilityadisability,healthcondition,orimpairment,andbymakingthemmoreaffordabletolocalcommunities.strategyInthisyear’sresearch,wealsoexploredthecriticaltopic03FocusonquantifyingScope3emissionsofgreenwashing.Wefoundaperceptiongapbetweenaccuratelyexecutivesandconsumers:only17%ofexecutivesareconcernedbytheriskofgreenwashing,while33%of04Embracecircularandinclusivedesignconsumersgloballybelieveorganizationsandbrandsaregreenwashingtheirsustainabilityinitiatives,risingto50%05Closetheintention-actiongapamongGenZconsumers.Wealsofoundthatorganizations06Explorethepotentialoftechnologytoachievearepinningtheirhopesondigitaltechnologyand,inparticular,generativeartificialintelligence(AI),tohelpclimategoalsthemachievetheirsustainabilitygoals.Fifty-ninepercentofexecutivesbelievethatgenerativeAIwillplayakeyroleintheirorganization'ssustainabilitytransformationefforts.CapgeminiResearchInstitute20236AWorldinBalance2023:HeightenedsustainabilityawarenessyetlaggingactionsWHOSHOULDshiftsinthesetrendsoverthepastyear.Largesocialresponsibility,salesandmarketing,financeREADTHISorganizationsacrossindustriessuchasaerospaceandaccounting,andhumanresources)andREPORTANDanddefense,automotive,consumerproductsfunctionalleaderswithinvaluechaindepartmentsWHY?andretail,energyandutilities,healthcareand(e.g.,R&D,productdesign,sourcingandlifesciences,industrialmanufacturing,public/procurement,logistics,andproduction).Thisreportofferscomprehensiveinsightsgovernment,andtelecom,andanyothersthatintoimportantsustainabilitytrends,bothhaveambitionstomakeanimpactinaclimateorThisreportisbasedonoriginalfindingsfromaenvironmentalandsocial,fortheglobalsocialsphere,willfindthisreportvaluable.comprehensiveindustrysurveyof2,151seniorcorporatesector.Italsoprovidesperspectiveonexecutives(directorlevelandabove)from718Thisreportoffersrecommendationsforleadingorganizationsacross13countries,withexecutivestoassisttheminacceleratingtheirannualrevenueabove$1billion.Around50%sustainabilityjourneys.Itprovidespracticalstepsofsurveyedexecutivesareemployedwithinthatseniorleaderscantaketobegindevelopingcorporatefunctions,andtheremaining50%comeasustainabilitystrategyand/ortoadvancefromvaluechainfunctions.Wealsoconductedatheircurrentsustainabilityactions.Giventheglobalsurveyof6,500consumerstocomplementimportanceofsustainabilitytodifferentareasoftheexecutivefindings.Pleaseseetheresearchbusiness,thisreportisusefultoawideaudience.methodologyattheendofthereportforThereportcaterstoleadersacrosscorporatemoredetails.functions(e.g.,strategy,sustainability,corporateCapgeminiResearchInstitute20237AWorldinBalance2023:HeightenedsustainabilityawarenessyetlaggingactionsCapgeminiResearchInstitute20238AWorldinBalance2023:HeightenedsustainabilityawarenessyetlaggingactionsIntroductionThisreportisthesecondinCapgemini’sannualresearchandsectors,includingaerospaceanddefense,automotive,seriesthatexaminesevolvingcorporatesustainabilityconsumerproducts,energy,financialservices,healthcaretrends.Inthefirstreportofthisseries,weexploredwhetherandlifesciences,industrialmanufacturing,retail,telecom,organizationsaretakingsustainabilityseriouslyandassessedutilities,andthepublicsector/government.theirprogressintransformingtowardssustainabilityacrossstrategy,productsandservices,operations,IT,anddatause.TheresearchfocusesonpracticesandinitiativeswithinWealsoexploredtherelationshipbetweenthematurityenvironmentalandsocialsustainability.Theresearchoforganizations’sustainabilitytransformationsandtheirstructureincludesasurveyof2,151respondentsfrom718financialperformance.Inour2022research,wediscoveredorganizationswithannualrevenueinexcessof$1billion.that,whileorganizationsacrossindustrieshavesetlong-termTheyaredividedintothefollowingprofilegroups:targetsforachievingenvironmentalsustainability,limitedactionisvisibleontheground.•50%areexecutivesfromcorporatefunctions,includingstrategy,sustainability,salesandmarketing,financeandInthisyear’sreport,weexaminetheshiftsintheaccounting,IT,operations,andhumanresourcesaforementionedtrendsoverthepastyear,andalsoexplorethemostsignificantnewlyemergingthemes.Critically,we•50%areexecutivesfromvalue-chainfunctionsincludingexaminetheextenttowhichorganizationsarefocusingoninnovation/R&D,productdesignanddevelopment,socialtopicsaspartoftheirsustainabilityambitions.sourcingandprocurement,supplychainandlogistics,andmanufacturingandproductionToaddressthesequestionsandthemes,weconductedaglobalresearchstudycoveringlargeorganizationsacross13Wesurveyedthreeexecutivesfromeveryorganizationcountries:Australia,Canada,France,Germany,India,Italy,includedintheresearch.Wealsosurveyed6,500consumersJapan,theNetherlands,Norway,Spain,Sweden,theUK,andacrossthe13countriestocomplementthefindingsfromtheUS.Theseorganizationsoperateacrosskeyindustriesexecutives.Formoredetailsonthesurveysamples,pleaserefertotheresearchmethodology.CapgeminiResearchInstitute2023Introduction9AWorldinBalance2023:HeightenedsustainabilityawarenessyetlaggingactionsThisreportcomprisesfivesections:12345ThesustainabilitybusinessImprovedperceptionsofSocialsustainabilityisGenerativeAIhasRecommendations:HoworganizationscasecomesintofocussustainabilityaredrivingmovingupthecorporatepromisingusecasesforcanacceleratetheirsustainabilityactionplansandprioritiesagendasustainabilitytransformationsCapgeminiResearchInstitute202310Aworldinbalance2023:Heightenedsustainabilityawarenessyetlaggingactions01THESUSTAINABILITYBUSINESSCASECOMESINTOFOCUSCapgeminiResearchInstitute202311AWorldinBalance2023:HeightenedsustainabilityawarenessyetlaggingactionsMoreexecutivesseeFIGURE1.sustainabilityasagrowthopportunityOver60%ofexecutivesnowsaythatthebusinesscaseforsustainabilityisclearOrganizationstodayunderstandthebusinesscasefor%OFEXECUTIVESWHOAGREEWITHTHESTATEMENTSBELOWenvironmentalsustainabilitybetterthanevenayearago.In2022,only21%ofexecutivesagreedthatthebusiness63%caseforsustainabilitywasclear.In2023,thispercentagehastripledto63%.Inaddition,thepercentageofexecutives53%53%thatclaimthecostofsustainabilityinitiativesoutweighsthebenefitsandthatsustainabilityinitiativesareafinancial21%24%22%burdenhasdeclinedbymorethanhalfinthepastyear(seeFigure1).“TheonlywayIKEAcanbesuccessfulinthefutureistobeinahurrytogetsustainable.Weneedtogetsmarteronhowweuseenergyandmaterialsacrossthewholevaluechain,”saysJesperBrodin,CEOofIngkaGroup.3ThebusinesscaseforThecostforsustainabilitySustainabilityinitiativesareafinancialsustainabilityisclearinitiativesoutweighsthebenefitsburdenwehavetobearinordertodobusinessSeptember2022September2023Source:CapgeminiResearchInstitute,SustainabilityTransformationTrendsSurvey,August–September2022,N=2,004executives,668organizations;August–September2023,N=2,001executives,668organizations.CapgeminiResearchInstitute202312AWorldinBalance2023:HeightenedsustainabilityawarenessyetlaggingactionsThisyear’sresearchwitnessedaconsistentdeclineFIGURE2.acrosscountriesintheshareofexecutivesagreeingthatsustainabilityinitiativesareprincipallyafinancialburden.USTheviewofsustainabilityasafinancialobligationhasdeclinedacrossallcountriesbutexecutivesaretheleastprogressiveinthisregard,with38%remainsmostpronouncedintheUSviewingsustainabilityasafinancialburdentheymustbeartodobusiness(seeFigure2).%OFEXECUTIVESBYCOUNTRYWHOAGREEWITHTHESTATEMENT:SUSTAINABILITYINITIATIVESAREAFINANCIALBURDENWEHAVETOBEARINORDERTODOBUSINESS64%61%59%54%54%54%51%50%49%47%53%26%18%27%15%18%15%12%34%44%44%38%20%19%22%15%GlobalUSAustraliaFranceCanadaGermanyUKSwedenJapanIndiaSpainItalyNetherlandsSeptember2022September2023Source:CapgeminiResearchInstitute,SustainabilityTransformationTrendsSurvey,August–September2022,N=2,004executives,668organizations;August–September2023,N=2,001executives,668organizations.CapgeminiResearchInstitute202313AWorldinBalance2023:HeightenedsustainabilityawarenessyetlaggingactionsKeydriversoftheaveraging$143billionannually.Thestudyalsoprojects64%sustainabilitybusinessthattheglobalcostofclimatedamagewillbebetweencase$1.7trillionand$3.1trillionperyearby2050.6,7Todateinofexecutivesinoursurveyshared2023,theUSalonehasexperienced24weather/climatethatamotivatingfactorforadoptingDriversofthispositivesentimentoverthepast12monthsdisastereventswithlossesexceeding$1billioneachsustainabilitywastocomplywithcurrentinclude:accordingtotheUSNationalCentersforEnvironmentalregulation,upfrom51%in2022Information.8•Extremeweatheraffectingeverycontinent:Catastrophicweathereventshavetouchedeverycontinent•Moreorganizationsmotivatedbyregulation:Sixty-inrecentyears.Summer2023wasthemostextremeever,fourpercentofexecutivesinoursurveysharedthatwithhistorictemperaturerises,wildfires,andstorms.amotivatingfactorforadoptingenvironmentaland/Thisisdrivingpublicdiscoursearoundclimatechange.Fororsocialsustainabilitystrategiesandinitiativeswastoexample,therewererecordhightemperaturesinChina,complywithcurrentregulation,upfrom51%in2022.Europe,NorthAfrica,theUS,andtheMiddleEast;wildfiresinEurope,Canada,andtheUS;floodingintheMiddleEast•Increasingpressurefromregulators:TheEUandtheUS;droughtconditionsintheHornofAfricaandCorporateSustainabilityReportingDirective(CSRD)Chile;aswellasthewarmestseatemperaturesonrecord.4,5cameintoeffectin2023.CSRDrequiresalllargeorganizationsandlistedsmall-andmedium-sized•Costsfromclimatedisastersbeingconsistentlyorganizationstoreportregularlyontheirenvironmentalhigh:Extremeweathereventsleadtosignificantcostsandsocialimpactanddefinesastandardreportingtosociety,includingdamagetoinfrastructure,property,frameworkfornon-financialdata.Failuretocomplywithagriculture,andhumanhealth.ArecentstudyestimatesCSRDcanattractsignificantsanctions,accordingtothethatfrom2000to2019,weathereventssuchashurricanes,EuropeanCommission.9TheCorporateSustainabilityfloods,andheatwavescost$2.86trillionglobally,DueDiligenceDirective(CSDDD)issettotakeeffectin2025or2026,andwillmakeitmandatoryfororganizationsoperatingintheEUtoaddressadverseimpactsoftheiroperationsandsupplychainsonCapgeminiResearchInstitute202314AWorldinBalance2023:Heightenedsustainabilityawarenessyetlaggingactionshumanrightsandtheenvironment.InMarch2022,theUSenergyandcutcarbonemissions.TheIRAofferstax•Moreorganizationscommittingto/validatingSecuritiesandExchangeCommission(SEC)proposedacreditsfororganizationsthatmanufactureintheUSandscience-basedtargets:Moreorganizationssettargetsclimate-relateddisclosurerulethatwouldrequirepubliclyprovidessubsidiesforbothdomesticandinternationalin2022thanintheentireprecedingseven-yearperiod,tradedorganizationstoreportScope1,Scope2,andScopeorganizations.13IntheUS,morethan$21.7billionhasrepresentingan87%increaseintargetsvalidatedby3carbonemissionsininitialfilingsandannualfinancialbeencommittedtosupportearly-stagecleantechinareasSBTifrom2021to2022.Bytheendof2022,the4,230reports.11likecarbonstorage,electricvehicles,andcleanenergy.organizationswithscience-basedtargetsorcommitmentsTheEUlagswith$8.7billioninsimilarprojectssincetherepresented34%oftheglobaleconomybymarket•Newstandardscomingintoforce:2023sawenforcementofIRA.14Thedifferenceismostdramaticincapitalization.19groundbreakingsustainabilityagreements,includingthecleanhydrogen.EUventurecapitalinvestmentsincleanadoptionoftheKunming-MontrealGlobalBiodiversityhydrogenreachedapeakof€343millioninQ12022,74%FrameworksetatCOP15,thefirstscience-basedtargetsnearlythreetimesthatoftheUS.However,insubsequentfornature,andthefinalrecommendationsfromthequarters,USinvestmentsingreenhydrogenconsistentlyofexecutivesinoursurveysharedthataTaskforceonNature-relatedFinancialDisclosuresinsurpassedEUinvestments,totaling€1.2billionmoreovermotivatingfactorforadoptingsustainabilitySeptember2023,whichwillenableorganizationstoassess,theentireperiod.15wastoincreasefuturerevenue,upfromdisclose,andmanagenature-relatedrisksandimpacts.1252%in2022•Consumerprotectionsforsustainabilitygaintraction:•Moreorganizationsmotivatedbyrevenuepotential:InMay2023,theEuropeanParliamentadoptedanewThree-quarters(74%)ofexecutivesinoursurveyshareddirectivetorestrictbusinesspracticesthatlimitconsumers’thatamotivatingfactorforadoptingenvironmentaland/sustainablechoices.16InJune2023,theUKAdvertisingorsocialsustainabilitystrategiesandinitiativeswastoStandardsAuthorityreleasedupdatedguidanceonincreasefuturerevenue,upfrom52%in2022.misleadingenvironmentalclaimsandsocialresponsibility.17•TheUSInflationReductionAct(IRA)gainsmomentum:•Moreorganizationssettingnetzerotargets:AsofJuneSignedintolawinAugust2022,thelandmarkclimate2023,929organizationsfromtheForbes2000listhavesetlegislationmadeinvestinginclimatetechnologiesinthenetzerotargets,up32%from702inJune2022.18USmoreattractive.TheIRAincludesfunding,programs,andincentivestoacceleratethetransitiontocleanCapgeminiResearchInstitute202315AWorldinBalance2023:HeightenedsustainabilityawarenessyetlaggingactionsATMOSTFIGURE3.ORGANIZATIONS,THEBOARDNearly60%ofexecutivesgloballysaytheirboardofdirectorsisengagedwithsustainabilityENGAGESWITHstrategySUSTAINABILITY%OFEXECUTIVESBYCOUNTRYWHOAGREEWITHTHESTATEMENT:OURBOARDOFDIRECTORSMostexecutivesinthisyear’ssurveyagreedPRIORITIZESSUSTAINABILITYANDISACTIVELYENGAGEDWITHOURORGANIZATION'SthattheirboardofdirectorsisactivelyengagingSUSTAINABILITYSTRATEGY(SEPTEMBER2023)withtheirorganization’ssustainabilitystrategy,meaningtheyprioritizesustainabilityandare77%63%62%60%workinginclosecollaborationwiththeCEOand73%72%69%54%54%53%managementteamondevisingstrategy.BoardengagementishighestinIndia(77%)andlowest59%inJapan(39%)(seeFigure3).ThehighproportionofboardengagementinIndiamaybedrivenby48%themandaterequiringcompaniesaboveacertain43%sizetoinvest2%oftheirnetprofitsoncorporate39%socialresponsibility(CSR)projectseveryyear.GlobalCanadaNetherlandsUKSwedenAustraliaFranceIndiaUSNorwayGermanyItalySpainJapanSource:CapgeminiResearchInstitute,SustainabilityTransformationTrendsSurvey,August–September2023,N=1,076executivesfromcorporatefunctions.CapgeminiResearchInstitute202316Aworldinbalance2023:Heightenedsustainabilityawarenessyetlaggingactions02IMPROVEDPERCEPTIONSOFSUSTAINABILITYAREDRIVINGACTIONPLANSANDPRIORITIESCapgeminiResearchInstitute202317AWorldinBalance2023:HeightenedsustainabilityawarenessyetlaggingactionsThepositiveshiftinFIGURE4.sentimenthasnottranslatedtoincreasedSustainabilityinvestmentstayedbroadlyunchangedin2023sustainabilityinvestmentyetAVERAGEANNUALINVESTMENTINSUSTAINABILITYASA%OFTOTALREVENUE,BYCOMPANYSIZEInourcurrent2023research,averageannualinvestmentinenvironmentalsustainabilityinitiativesandpracticesacross2.81%2.90%industriesrepresents0.92%oftotalrevenue,upfrom0.91%in2022.Thisincreaserepresentsanadditional$1.4million1.40%1.37%investmentpercompanyonaverage,yearonyear.Aswasthecasein2022,totalspendingonsustainabilitytrendsupward0.91%0.92%0.78%0.79%withorganizationsize,butlargerorganizationsinvestlessasapercentageoftotalrevenue:onaverage,only0.42%oftotal0.41%0.42%revenuecomparedwith2.9%amongsmallerorganizations(seeFigure4).Allcompanies$1bn-$5bn$5bn-$10bn$10bn-$20bn$20bn+Annualrevenueglobally2022-Averagesustainabilityinvestment2023-Averagesustainabilityinvestmentasa%oftotalrevenueasa%oftotalrevenueSource:CapgeminiResearchInstitute,SustainabilityTransformationTrendsSurvey,August–September2022,N=668organizations;August–September2023,N=668organizations.CapgeminiResearchInstitute202318AWorldinBalance2023:HeightenedsustainabilityawarenessyetlaggingactionsHowever,organizationsFIGURE5.57%haveprogressedin37%definingsustainabilityMorethanhalfofexecutivessaytheirorganizationhasa3-yearprioritylistofinitiativesandredesigninginitiativesandisredesigningitsbusiness/operatingmodeltobemoresustainablebusinessmodels%OFEXECUTIVESWHOAGREEWITHTHESTATEMENTSBELOWTheshareofexecutivesthatsaytheirorganizationhasadefinedprioritylistofsustainabilityinitiativestoimplement61%inthenextthreeyearsisupto61%,from49%in2022.In49%addition,moreexecutivessharedthattheirorganizationisintheprocessofredesigningitsbusiness/operatingmodeltobemoresustainable(37%in2022,upto57%in2023)(seeFigure5).WehaveaclearlydefinedpriorityWeareredesigningourbusiness/operatinglistofsustainabilityinitiativestobeimplementedmodel,soitismoresustainableinthenextthreeyearsSeptember2022September2023Source:CapgeminiResearchInstitute,SustainabilityTransformationTrendsSurvey,August–September2022,N=1,003executivesincorporatefunctions;August–September2023,N=1,001executivesincorporatefunctions.CapgeminiResearchInstitute202319AWorldinBalance2023:HeightenedsustainabilityawarenessyetlaggingactionsExecutivesatorganizationswithboardswhoareactively•71%saytheyareredesigningtheirbusinessoroperating57%engagedinsustainabilityareevenmoreoptimisticonthesemodelstobemoresustainable(versus57%onaverage)measures:ofexecutivessaythattheirorganization•Further,executivesatorganizationswithengagedboardsisredesigningitsbusiness/operating•74%ofexecutiveswithengagedboardssaytheyhavearemorelikelytoagreethat,by2040,theywillhavemoremodeltobemoresustainableaclearlydefinedprioritylistofsustainabilityinitiatives,sustainablebusinessmodels(88%versus53%onaverage,comparedwith61%onaverageglobally).CapgeminiResearchInstitute202320AWorldinBalance2023:HeightenedsustainabilityawarenessyetlaggingactionsBiodiversityhasbecomeFIGURE6.moreofafocalpointOrganizationshaveimprovedtheiractionstopreservebiodiversityInourrecentbiodiversityresearch,63%ofexecutivessurveyedsaidbiodiversityisimportanttotheircompany,%OFEXECUTIVESWHOAGREEWITHTHESTATEMENTSBELOW56%butonly24%oforganizationshaveabiodiversitystrategy.2059%43%Whilemostorganizationslackacoherentstrategytoprotectbiodiversityandcombatbiodiversityloss,theyhave47%progressedinactionstakensincelastyear.Inourcurrentresearch,59%ofexecutivessaythattheirorganizationmonitorstheconversionofnaturalecosystems(i.e.,changesowingtodeforestation)ontheirownedormanagedlands,upfrom47%in2022.Inaddition,56%saytheirorganizationinvestsinconservingnaturalhabitats,upfrom43%in2022(seeFigure6).WemonitortheconversionofnaturalWeinvestinconservingnaturalhabitatsecosystems(i.e.,changesowingtodeforestation)(suchasrainforests)onourowned/managedlandsSeptember2023September2022Source:CapgeminiResearchInstitute,SustainabilityTransformationTrendsSurvey,August–September2022,N=1,001executivesinvaluechainfunctions;August–September2023,N=1,000executivesinvaluechainfunctions.CapgeminiResearchInstitute2023Inthesectionsthatfollow,wehighlightthreekeychallenges21thatorganizationsfacetodayintheirsustainabilityAWorldinBalance2023:Heightenedsustainabilityawarenessyetlaggingactionstransformationsrelatingto:•DevelopingsustainableproductsandservicesCapgeminiResearchInstitute2023•MeasuringScope3emissions•ReportinganddisclosingenvironmentalsustainabilitydataActionsaddressingthesethreetopicshavelargelyremainedunchangedfromlastyearor,insomecases,declined.60%ofexecutivessaytheirorganizationreportsacarbonfootprintforeveryproduct/servicetheysell,virtuallyunchangedfrom202222AWorldinBalance2023:HeightenedsustainabilityawarenessyetlaggingactionsSustainableproductFIGURE7.designanddevelopmenthaveseenonlylimitedAlmostasmanyexecutivesareactingonsustainableproductdesignin2023asin2022advancement%OFEXECUTIVESWHOAGREEWITHTHESTATEMENTSTherehasbeenlimitedtonomovementinkeyareasrelatedtoproductdesignanddevelopment.Forexample,60%ofWecommunicateacarbonfootprintforeveryproduct/servicewesell59%executivessaytheirorganizationreportsacarbonfootprint60%foreveryproduct/servicetheysell,virtuallyunchangedfromCircularityisakeycomponentofoursustainabilitystrategy58%2022(59%).Inthecaseofdesigningproductstohavelonger57%lifespans,theshareofexecutiveswhosaytheirorganizationWearedesigningproductssotheycanservetheiroriginallyintended57%doesthisdeclinedfrom57%in2022to47%in2023.Whenfunctionsforlonger47%itcomestoeliminatingfossilfuelsandmovingawayfrom54%productdesignusingvirgintimber,organizationshavemadeWeperformLCA(life-cycleassessment)onallofourproducts/services55%headway,beingup15%inbothareas(seeFigure7).52%Wetakebackend-of-lifeproductsfromcustomerstousetheminthe53%remanufacturingprocess/upcycle47%Weareredesigningproductstoremovefossil-fuelfeedstock62%sources(suchascoal)44%Weareredesigningproductstohavealowerimpactonforests(e.g.,using59%lessvirgintimbersofewertreesarecutdown)September2022September2023Source:CapgeminiResearchInstitute,SustainabilityTransformationTrendsSurvey,August–September2022,N=1,001executivesinvaluechainfunctions;August–September2023,N=1,000executivesinvaluechainfunctions.August–September2022,N=1,003executivesincorporatefunctions;August–September2023,N=1,001executivesincorporatefunctions.CapgeminiResearchInstitute202323AWorldinBalance2023:HeightenedsustainabilityawarenessyetlaggingactionsTrackingScope3emissionsisprovingchallengingTheshareofexecutivesthatsaytheirorganizationhastheabilitytomeasureandcollectdataonScope1and2emissionshasremainedunchanged,yearonyear.ForScope3emissions(emissionsfromindirectsourcesinthevalueorsupplychain),thesharehasdeclinedfrom60%in2022to51%in2023(seeFigure8).OrganizationsintheEUarebeginningtorealizejusthowcomplexitistofulfiltherequirementsofthenowactiveCSRD(CorporateSustainabilityReportingDirective).AccordingtorecentresearchfromCapgeminiandCDP(thenot-for-profitcharitythatrunstheglobalenvironmentalimpactdisclosuresystem),ofemissionsdisclosedbyEuropeanorganizationsin2022,92%wereScope3.Measurestakentoreducethesecustomer-andsupplier-relatedemissionsonlycoveredanaverageof37%oftotalemissionsfromthesecategories.21CapgeminiResearchInstitute202324AWorldinBalance2023:HeightenedsustainabilityawarenessyetlaggingactionsDanielSchneiders,DirectorofClimateProgramatFIGURE8.pharmaceuticalandbiotechnologycompanyBayer,commentsonthechallenge:“ToachievesignificantFewerexecutivessaytheirorganizationcanmeasureandcollectScope3emissionsreductionsinthesupplychain,weareintensifyingourdatain2023comparedwith2022collaborationwithsuppliers.Wearetryingtounderstandhowwecouldworktogethersothattheycanreducetheir%OFEXECUTIVESWHOAGREEWITHTHESTATEMENTSBELOWemissions,inparticularthroughshiftingtorenewableenergies.WehavealsoupdatedourSupplierCodeof60%61%60%Conduct[…]However,accessingemissionsdatafrom51%suppliersisachallengeas,forinstance,theydonotnecessarilyhavededicateddata-monitoringprocessesorITinfrastructures.Additionally,lackingstandards,dataishardtocompare.Currently,therefore,attainingacompleteandpreciseassessmentasafoundationforsteeringScope3emissionsremainscomplicated.”22WeareabletomeasureandcollectdataonWeareabletomeasureandcollectdataourScope1andScope2emissionsonourScope3emissionsSeptember2022September2023Source:CapgeminiResearchInstitute,SustainabilityTransformationTrendsSurvey,August–September2022,N=1,001executivesinvaluechainfunctions;August–September2023,N=1,000executivesinvaluechainfunctions.Scope1emissionsaredirectemissionsfrombuildingsorassetsownedorcontrolledbyanorganization,suchastheemissionsassociatedwithfuelconsumptionandrefrigerantgases.Scope2emissionsrelatetoemissionsassociatedwiththeconsumptionofelectricity,heat,orsteam.Scope3emissionsareallotheremissionsgeneratedwithinanorganization’svaluechain,includingupstreamanddownstreamemissions.Theyoccurasaresultoftheactivitiesofanentity,butfromsourcesnotownedorcontrolledbythatentity’sbusiness.CapgeminiResearchInstitute202325AWorldinBalance2023:HeightenedsustainabilityawarenessyetlaggingactionsOrganizationsarestillFIGURE9.challengedbyreportingonenvironmentalMoreexecutivesareusingthirdpartiestoauditsustainabilitydatabutfewerareusingsustainabilitythemtodiscloseandbenchmarkprogressTherehasbeensomeimprovementinwhetherorganizations%OFEXECUTIVESWHOAGREEWITHTHESTATEMENTSBELOWhavetheirsustainabilitydataauditedbyanoutsidepartyandadeclineintheuseofthirdpartiesfordisclosureand54%54%50%benchmarking(seeFigure9).50%48%42%54%WehaveoursustainabilityWeuseanexternalthirdpartyWeusethird-partysustainabilityindicesdataauditedbyathirdpartytohelpdiscloseourenvironmental(e.g.,DowJonesSustainabilityIndex)ofexecutivessaythattheirtobenchmarkourprogressorganizationhassustainabilitydataimpact(e.g.,CDPWorldwide)onsustainabilityauditedbyathirdpartySeptember2022September2023Source:CapgeminiResearchInstitute,SustainabilityTransformationTrendsSurvey,August–September2022,N=1,003executivesincorporatefunctions;August–September2023,N=1,001executivesincorporatefunctions.CapgeminiResearchInstitute202326AWorldinBalance2023:HeightenedsustainabilityawarenessyetlaggingactionsWHOARETHE•Sustainabilityenablers:FIGURE10.SUSTAINABILITYThisdimensionrelatestoorganizations’gettingLEADERS?theirpeopletobuyintotheirsustainabilityThebuildingblocksofsustainabilitytransformationcultures,supportedbycorporatefunctionsAsseeninourresearchoverthepastthreesuchasIT,financeandaccounting,andsalesVALUECHAINSUSTAINABILITYTECHyears,manyorganizationsworkonsustainabilityandmarketing.PROCESSESENABLERSACCELERATORSinitiativesanddiscreteprojectsinsilos,withnooverarchingstrategyorgovernancemechanisms.•Techaccelerators:•Sourcing•Visionandleadership•AI/machinelearningBecomingasustainablebusinessisalongandThisdimensionreferstotheadoption•Innovation/R&D/•Talent•Automationcomplexprocess,demandingatransformationofofdigitaltechnologiesandpathwaysto•Culture•AR/VRoperatingmodels,technology,andattitudes.acceleratesustainabilitytransformation.productdesign•IT•CollaborationtoolsTheseincludeinvestmentsinAI,automation,•Manufacturing•Financeand•3DprintingTogainasenseofwhereorganizationsareintheirdigitaltwins,InternetofThings(IOT),aswell•Logistics•Digitaltwinssustainabilityjourneysandidentifytheleadingashydrogeninfrastructure,gigafactories,•Technologyaccounting•IoT/IIoTorganizations,wemappedtheirsustainabilityelectrification,bioeconomy,industrial-scale•Salesandmarketing•Roboticsmaturityacrossthreedimensions:carboncapture,utilization,andstorage(CCUS),•Hydrogenandthetransformationofgridstoenable•Gigafactories•Valuechainprocesses:decarbonizationandintegrationofnew•ElectrificationWeassessedthesustainabilityinitiativesandcleanenergies.•Smartgridsactivitiesoforganizationsacrossthevalue•Bioeconomychain,includingsourcing,R&D/productdesign/•Carboncapture,innovation,manufacturing,andlogistics,aswellastheuseoftechnologyforsustainability.utilization,andstorageSource:CapgeminiResearchInstituteanalysis.CapgeminiResearchInstitute202327AWorldinBalance2023:HeightenedsustainabilityawarenessyetlaggingactionsBasedonthesebuildingblocks,weidentifiedFIGURE11.threecohortsbytheirsustainabilitymaturity:In2023,beginnersconstituteahighershareoforganizations1.Frontrunners:betterprogressionalongthethreedimensionsDISTRIBUTIONOFORGANIZATIONSALONGTHESUSTAINABILITYMATURITYFRAMEWORK2.Experimenters:lowmaturityineitheroneor63%twooftheabovethreedimensions58%3.Beginners:lowmaturityalongthe34%threedimensions.26%Ourframeworkincludesnearly80statementsto11%8%ExperimentersBeginnersassessthematurityoftheorganizationsacrosstheFrontrunnersthreebuildingblocks.Pleaserefertothefulllistofstatementsintheappendix.September2022September2023Significantprogressacrossallthreedimensionsmakestheseorganizationsfrontrunners.In2022,onlyaboutoneintenorganizations(11%)inoursurveyiscategorizedasasustainabilityfrontrunner.Inourcurrentresearch,thishasdecreasedto8%(seeFigure11).Pleasenotethatoverall,organizationshaveimprovedtheirscoresacrossallmetricsanalyzedthisyearcomparedtolastyear;however,withinthe2023sampleoforganizations,thedistributionhasshifted.Source:CapgeminiResearchInstitute,SustainabilityTransformationTrendsSurvey,August–September2022,N=2,004executives,N=668organizations;August–September2023,N=2,001executives,N=668organizations.CapgeminiResearchInstitute202328AWorldinBalance2023:HeightenedsustainabilityawarenessyetlaggingactionsWeanalyzedthefinancialsoftheorganizationsin•Frontrunnersrealized12%higherrevenueThisanalysisdoesnotimplythatsustainabilityourcurrentresearchtodivinewhetherafinancialperemployeecomparedwiththeaverageequatesdirectlytoprofitability.Rather,itadvantagecanbesaidtoaccrueconsistentlyfromfrom2021to2022and5%higherEBIThighlightsthatsustainabilityneednotleadtoimprovedsustainableperformance.AsFiguremargincomparedwiththeaveragefromthefinancialdisadvantage.Italsodemonstratesthat12shows,frontrunnersoutperformedontotalsameperiod.organizationswhoaremoresuccessful(i.e.,realizerevenueperemployeeandEBITmargin.higherrevenuegrowth,forexample)havegreatermeanstoinvestinsustainability.FIGURE12.FrontrunnersrealizedhigherrevenueperemployeeandEBITmarginDIFFERENCEINREVENUEPEREMPLOYEEFROMTHEAVERAGEORGANIZATION,DIFFERENCEINEBITMARGINFROMTHEAVERAGEORGANIZATION,BYBYSUSTAINABILITYMATURITY,2021–22SUSTAINABILITYMATURITY,2021–22FrontrunnersExperimentersBeginnersFrontrunnersExperimentersBeginners12%6%12%5%3%7%higherthanaveragehigherthanaveragelowerthanaveragehigherthanaveragehigherthanaveragelowerthanaverageSource:CapgeminiResearchInstitutefinancialanalysisof660organizations(N=52frontrunners,384experimenters,and224beginners)forFY2021–22.Note:Thepercentagesindicatethedifferenceinperformanceforeachparticularcohortcomparedwiththeaverageforallorganizations;eightorganizationswereremovedfromthefinancialanalysisbecausetheyhadoutlierdata.CapgeminiResearchInstitute202329AAWwoorlrdldininBbaalalannccee22002233::HHeeigighhtteenneeddssuussttaaininaabbiliiltityyaawwaarreenneesssyyeettlalaggggininggaaccttioionnssCapgeminiResearchInstitute202330Aworldinbalance2023:Heightenedsustainabilityawarenessyetlaggingactions03SOCIALSUSTAINABILITYISMOVINGUPTHECORPORATEAGENDACapgeminiResearchInstitute2023Socialsustainabilityis31becomingakeypriorityAWorldinBalance2023:Heightenedsustainabilityawarenessyetlaggingactionsfororganizations“ThenextwaveofbeingInaccordancewiththeUNGlobalCompact,wedefinesocialresponsiblewillentailbroadersustainabilityastheprograms,initiatives,practices,and/action,notonlyinthehealthandorprocessesdesignedtoidentifyandmanagebusinessenvironmentalsectors,butalsoonimpactsonemployees,workersinthevalueorsupplyemployment,education,andotherchains,customers,andlocalcommunities.Socialissuesarebroadersocietalissues.”asignificantaspectoftheUN’sSocialDevelopmentGoals(SDGs),forwhoseachievementbusinesseshaveacriticalLAURENCEPESSEZroletoplay.TheSDGscoverpoverty,hunger,healthandwellbeing,education,genderequality,decentworkandGlobalHeadofCSRatBNPParibasdignity,inequality,andpeaceandjustice.CapgeminiResearchInstitute202332AWorldinBalance2023:HeightenedsustainabilityawarenessyetlaggingactionsOverhalf(56%)ofexecutivessaythattheyareincreasinglyFIGURE13.focusingonthesocialdimensionofESG(seeFigure13).Asimilarshare(59%)saythattheirorganization’ssustainabilityOverhalfofexecutivesgloballysaytheirorganizationisincreasinglyfocusedonsocialprojectsaddressbothenvironmentalandsocialaspects.Onesustainabilityrecentstudyestimatesthat96%ofS&P500organizationspublishESGreportsinsomeformtoday.23Executivesat%OFEXECUTIVESBYCOUNTRYWHOAGREEWITHTHESTATEMENT:WEAREINCREASINGLYorganizationswithboardswhoareengagedinsustainabilityFOCUSINGONTHESOCIALDIMENSIONOFESG(SEPTEMBER2023)aremorelikelytosaytheyareincreasinglyfocusingonthesocialdimensionofESG(96%versus56%onaverage).66%64%63%62%59%LaurencePessez,GlobalHeadofCSRatBNPParibas,says:“Thenextwaveofbeingresponsiblewillentailbroader56%57%57%57%action,notonlyinthehealthandenvironmentalsectors,butalsoonemployment,education,andotherbroadersocietal50%50%48%47%46%issues.”24GlobalNetherlandsAustraliaCanadaSwedenItalySpain59%NorwayUSFranceIndiaGermanyUKJapanofexecutivessaythattheirorganization’ssustainabilityprojectsSource:CapgeminiResearchInstitute,SustainabilityTransformationTrendsSurvey,August–September2023,N=2,151executives,addressbothenvironmentaland717organizations.socialaspectsCapgeminiResearchInstitute202333AWorldinBalance2023:HeightenedsustainabilityawarenessyetlaggingactionsOrganizationsareputtingFIGURE14.67%themosteffortintosocial63%sustainabilityinitiatives67%ofexecutivessaytheirorganizationtrainsemployeesonhealthandsafety60%fortheirownworkforces55%%OFEXECUTIVESWHOAGREEWITHTHESTATEMENTSBELOW51%Essentiallyallexecutives(99%)saytheirorganizationis(SEPTEMBER2023)launchingsocialsustainabilityinitiatives/programstobenefittheirworkforce.Sixty-fivepercentarelaunchingprogramstoWetrainouremployeesonoccupationalhealthandsafetybenefitlocalcommunities.Forexample,60%ofexecutivesWerecruitandhirepeopleofdifferentgenderidentities,saythattheirorganizationistrainingandupskillingemployeesondiversityandinclusion,and51%offermentalsexualorientations,races,ethnicities,socio-economicbackgrounds,healthprogramstoemployees(seeFigure14).Aerospaceand/orabilitiesanddefenseleadsonoccupationalhealthandsafetytraining(74%).Publicsector/governmentleadsonmental-healthWetrainandupskillouremployeesondiversityandinclusiontopicsprograms(65%)andrecruitingandhiringdiversepopulations(70%),whileindustrialmanufacturingleadsindiversifyingitsWehavediversifiedourexecutivecommitteeongenderexecutivecommittee(66%).identityand/orsexualorientationWeoffermental-healthprogramstoemployeesSource:CapgeminiResearchInstitute,SustainabilityTransformationTrendsSurvey,August–September2023,N=1,076executivesincorporatefunctions.N=990executivesincorporatefunctionsforthestatement.CapgeminiResearchInstitute202334AWorldinBalance2023:HeightenedsustainabilityawarenessyetlaggingactionsOrganizationsareworkingtoincorporatesocialsustainabilityfostersinclusionthroughongoingdiversityandinclusiontopromoteequalityforwomeninthemanufacturingsector.initiativesbenefitingtheircurrentandfutureemployees.(D&I)trainingand10employeeresourcegroups(ERGs),ThepartnershipresultedinimprovedwagesandworkerTelecomorganizationVerizonpartnerswithorganizationswhichamplifiesdiversevoicesandsupportsemployeeconditions.Inparticipatingfactories,thepaygapandfocusedonunderservedcommunities,suchasthedevelopment.Consequently,theirUSworkforceisnowmadeincidenceofsexualharassmentdecreasedbyalmost20%,SocietyofWomenEngineersandtheNationalSocietyupofnearly60%womenandpeopleofcolor.25Similarly,whileaccesstoprenatalcareandproductivityrosebymoreofBlackEngineers,torecruitdiversetalent.VerizonalsoclothingretailerGappartneredwithlaboradvocacygroupsthan20%.26CapgeminiResearchInstitute202335AWorldinBalance2023:HeightenedsustainabilityawarenessyetlaggingactionsOrganizationsarenotFIGURE15.supportingworkersinthesupplychaineffectivelyOnly38%ofexecutivesgloballysaytheirorganizationrestrictssupplierstothosethatpayalivingwageTheUNGlobalCompactassertsthatalivingwage–awagethatenablesworkersandtheirfamiliestomeettheirbasic%OFEXECUTIVESBYINDUSTRYWHOAGREEWITHTHESTATEMENT:WEONLYWORKWITHSUPPLI-needs–isadrivingforcebehindeliminatingpoverty.TheERSWHOPAYALIVINGWAGE(SEPTEMBER2023)UK-basedLivingWageFoundationbelievesalivingwageiscrucialtoachievingeightofthe17SDGs;forexample,those46%thatfocusoneradicatingpoverty,raisingstandardsofhealthandwellbeing,strivingforqualityeducationandgender38%43%42%41%40%40%38%equality,andensuringeconomicgrowth.2735%35%34%Organizationsmustdomoretoholdsuppliersaccountableforupholdingthestandardstheypromise.Overhalf(64%)of25%executivessaytheirorganizationconsiderstheESGratingsandenvironmentalpledgestakenbysuppliersduringsupplierGlobalTelecomUtilitiesConsumerproductsAutomotiveRetailselection.However,only38%ofexecutivesacrossindustriesmanufacturingsaytheyonlyworkwithsupplierswhopayalivingwage(seeFigure15).Fororganizationswithtiered-supplieroperations,IndustrialmanufacturingEnergyPublic/governmentFinancialHealthcareandlifeAerospaceitmaybedifficulttoholdallsuppliersaccountableowingtoservicessciencesanddefensethedisparityoflegalsystemsindifferentgeographies.Source:CapgeminiResearchInstitute,SustainabilityTransformationTrendsSurvey,August–September2023,N=1,076executivesincorporatefunctions.CapgeminiResearchInstitute202336AWorldinBalance2023:HeightenedsustainabilityawarenessyetlaggingactionsThelivingwageconceptisgainingmomentumglobally.suppliers,coveringeightcountriesand336suppliers,byTheEUhasbeenactivelydiscussingtheissueoffairwages.2019.33Similarly,cosmeticgiant,L’Oréal,havingannouncedAlignedtoits“EuropeanPillarofSocialRights”thatimplementationofitsliving-wagepolicyforitsemployeesinestablishestheprinciplethatEUworkershavetherighttoa2020,intendstoextendthesametoitsstrategicsuppliersbyfairwagethatprovidesforadecentstandardofliving,the2030.34EuropeanCommission’sdirectiveonadequateminimumwageswasapprovedandformallyadoptedinOctoberGlobally,45%ofconsumerssaytheyexpectorganizationsto2022.MemberstateshaveuntilNovember2024toalignensuretheyonlyworkwithsupplierswhopayalivingwage,theirnationalwageswiththenewrules.28SomeUSstateswithmillennialsmostcommonlyhavingthisexpectationandcitieshaveimplementedminimumwagelawsthatare(63%)(seeFigure16).Bycountry,thegreatestshareofhigherthanfederallevelsinanefforttoestablishalivingconsumersinAustralia(56%)expectsorganizations/brandswage,includingSanFrancisco,LosAngles,andNewYork.29Intoworkwithsupplierswhopayalivingwage,followedbytheUK,theLivingWageFoundationpromotestheconceptCanadaandIndia(55%each).ofalivingwageandhasaccredited14,000employerswhovoluntarilypaytheiremployeesalivingwage.3045%However,morecorporateeffortsareneeded.Accordingofconsumersexpectorganizations/toa2022surveyof1,000globalorganizations,only4%brandstoworkwithsupplierswhopaytheirownworkersalivingwageorhavetargetstopaypayalivingwagethemone.31Thereareexamplesoforganizationsstrivingtoprovidealivingwage.Unilever,uponreachingitstargettopayallitsemployeesalivingwageby2021,announceditscommitmenttodothesameforallitssuppliersby2030.32H&Mimplementedafairlivingwagestrategyforallitstier-1CapgeminiResearchInstitute202337AWorldinBalance2023:HeightenedsustainabilityawarenessyetlaggingactionsFIGURE16.Nearlyhalfofconsumersgloballyexpectsupplierstopayalivingwage%OFCONSUMERSWHOEXPECTORGANIZATIONSTOONLYWORKWITH%OFCONSUMERSWHOEXPECTORGANIZATIONSTOONLYWORKWITHSUPPLIERSWHOPAYALIVINGWAGE,BYAGEGROUPSUPPLIERSWHOPAYALIVINGWAGE,BYCOUNTRY63%56%55%55%59%45%51%50%46%45%43%45%41%40%38%35%43%27%19%GlobalGenZ,agedMillennials,GenX,agedBoomers,agedGlobalCanadaUSSpainNorwayFranceSweden18-24aged25-4041-5657-73+AustraliaIndiaNetherlandsJapanItalyGermanyUKSource:CapgeminiResearchInstitute,ConsumerSurvey,October2023,N=6,500consumers.CapgeminiResearchInstitute202338AWorldinBalance2023:HeightenedsustainabilityawarenessyetlaggingactionsAccessibilityandFIGURE17.affordabilityrequiremoreOnly42%ofexecutivessaytheirorganizationmakesproducts/servicesaccessibletopeoplewithdisabilitiesattention%OFEXECUTIVESWHOAGREEWITHTHESTATEMENTSBELOW(SEPTEMBER2023)Lessthanhalfofexecutivessaytheirorganizationismakingproducts/servicesaccessibletopeoplewithdisabilities,healthconditions,impairments,orneurodivergenceaswell42%asaffordabletotheirlocalcommunities(seeFigure17).Our40%inclusivedesignresearchfoundthatdiverseandinclusivetechteamsleadtomoreinclusivetechdesign.Organizationswithadvancedinclusivepracticesarefourtimesmorelikelytocreateinclusiveproducts.35Wemakeourproducts/servicesaccessibletopeopleWemakeourproducts/servicesaffordabletowithdisabilities/healthconditions/impairmentsourlocalcommunitiesSource:CapgeminiResearchInstitute,SustainabilityTransformationTrendsSurvey,August–September2023,N=990executivesincorporatefunctions.CapgeminiResearchInstitute202339AWorldinBalance2023:HeightenedsustainabilityawarenessyetlaggingactionsAfterconductinganextensivesurveyofchildrenaged6–12,energy,providingmoreaffordablelocalpricingschemesschemetomakeitslicensesmoreequitableandtheLegoGrouprelauncheditsFriendslineofproductswithwillbenefitlocalcommunities,generatinggoodwillandaffordableforschoolsanddistricts.Theorganizationnewcharactersrepresentingdiverseculturalbackgrounds,socialimpact.Otherimportantindustriescouldalsofollowprovidesdiscountstoschoolsthatserveahighphysicalandmentaltraits,andcomplexemotions,thismodel.BookNook,aUS-basededucationalsoftwareproportionofchildreneligibleforfreeordiscountedincludingcharacterswithlimbdifferences,anxiety,andorganizationthatdevelopsreadingandliteracyinstructionmeals,adisproportionatenumberofwhomarefromneurodivergence.36BeautycompanyLancômerecentlyforsecondaryeducation,offersanequity-basedpricinglow-incomefamiliesandcommunitiesofcolor.39unveiledanAI-poweredmake-upapplicatorcalledHapta,whichassistspeoplewithlimitedarmandhandmobility.67%Haptaislightweight,usessensorsandmotion-stabilizingtechnology,andcanbeusedwithavarietyofmake-upofconsumersexpectorganizationstoacceptlowerpricesforessentialproductssuchasfood,products,includinglipstickandmascara.37medicine,fuel,apparel,andutilitiesindifficulteconomictimesBasedonourrecentconsumerresearch,inadifficulteconomicenvironment,67%ofconsumersexpectorganizationstoacceptlowerpricesforessentialproductssuchasfood,medicine,fuel,apparel,andutilities.38Forkeyindustriessuchasfoodandbeverage,consumergoods,andCapgeminiResearchInstitute202340AWorldinBalance2023:HeightenedsustainabilityawarenessyetlaggingactionsEXECUTIVESDONOTHowever,executivesinoursurveydonotFULLYGRASPappearoverlyconcernedwithaccusationsofCONSUMERgreenwashing.Abouthalf(51%)followexternalSKEPTICISMguidelinesonresponsiblecommunicationandadvertisingtoavoidsuchissues(upfromonly49%Consumersaroundtheworldarebecomingmorein2022).Only17%believetheirorganization’stopwaryofgreenwashing(thepracticeofoversellingleadersareconcernedaboutthepossibilitythatoroverstatinganenvironmentalclaimforathepublicperceivestheirsustainabilityinitiativesproductorservice).RecentCapgeminiresearchwithsuspicion.foundthatthissentimentismoreprevalentowingtoconsumers’continualexposuretosuch51%messagingaspeoplespendmoretimeonline.Italsoillustratesthepotentialdisconnectbetweenofexecutivessaythattheirmarketingobjectivesandimpact.Inotherwords,organizationfollowsexternalwhen“green”productsdonotliveuptothehype,guidelinesonresponsiblebuyersfeelletdownandaremorelikelytobecommunicationandadvertisingtoskepticalaboutsimilarproducts.40Regulators,avoidaccusationsofgreenwashingtoo,arebecomingmorestringentinsettingrulesandguidancefororganizationsadvertisingandmarketingenvironmentalclaims.TheEUandtheUKhavebothimplementedneworupdatedregulationstocombatgreenwashingandprotectconsumersin2023.CapgeminiResearchInstitute202341AWorldinBalance2023:HeightenedsustainabilityawarenessyetlaggingactionsWealsoaskedexecutiveshowconsumersviewedFIGURE18.theirorganizations’sustainabilityinitiatives.Lessthanone-fifth(17%)ofexecutivessaytheyThereisaperceptiongapbetweenexecutivesandconsumersonsustainabilityinitiativesbelieveconsumersperceivetheirinitiativesasgreenwashing.Thissentimentismostprevalentin%OFEXECUTIVESANDCONSUMERSWHOBELIEVETHESTATEMENTSBELOWtheUS(35%)andleastinJapan(6%).Incontrast,50%whenweaskedconsumersdirectlyhowtheyfelt,athirdsaidtheybelieveorganizations/brands33%greenwashtheirinitiatives(seeFigure18).17%17%%ofexecutiveswhobelievethat%ofallconsumerswhobelieve%ofGenZconsumers(aged18-24)ofexecutivessaytheybelieveconsumersconsidertheirthatorganizations/brandsarewhobelievethatorganizations/brandsconsumersperceivetheirinitiativesgreenwashingtheirsustainabilityasgreenwashingorganization’ssustainabilityinitiativesaregreenwashingtheirasgreenwashinginitiativessustainabilityinitiativesSource:CapgeminiResearchInstitute,SustainabilityTransformationTrendsSurvey,August–September2023,N=2,151executives,667organizations.ConsumerSurvey,October2023,N=6,500consumers.CapgeminiResearchInstitute202342AWorldinBalance2023:HeightenedsustainabilityawarenessyetlaggingactionsOurresearchrevealsthatconsumers’skepticismthatorganizations/brandsaregreenwashing,areengagingingreenwashing,perhapsowingtotrendsdownwardwithage.Bycountry,IndiahasfollowedbyCanada(43%).ConsumersintheUKstringentregulationsregardinggreenclaimsinthegreatestshareofconsumers(45%)whobelievearetheleastsuspiciousthatorganizations/brandsthosecountries(seeFigure19).FIGURE19.GenZconsumersaremostlikelytobelieveorganizations/brandsaregreenwashing%OFCONSUMERSWHOBELIEVETHATORGANIZATIONS/BRANDSARE%OFCONSUMERSWHOBELIEVETHATORGANIZATIONS/BRANDSAREGREENWASHINGTHEIRSUSTAINABILITYINITIATIVES,BYAGEGROUPGREENWASHINGTHEIRSUSTAINABILITYINITIATIVES,BYCOUNTRY50%45%43%45%33%37%36%36%36%35%34%32%31%33%28%24%27%16%18%GlobalGenZ,agedMillennials,GenX,agedBoomers,agedGlobalCanadaNorwayAustraliaGermanyFranceSweden18-24aged25-4041-5657-73+IndiaSpainJapanUSNetherlandsItalyUKSource:CapgeminiResearchInstitute,ConsumerSurvey,October2023,N=6,500consumers.CapgeminiResearchInstitute202343AWorldinBalance2023:HeightenedsustainabilityawarenessyetlaggingactionsFurther,ourresearchrevealsthat49%ofFIGURE20.consumersnever,rarely,oronlysometimestrustanenvironmentalclaimaboutapurchasetheyare65%ofGenZconsumerssaytheynever,rarely,oronlysometimestrustanenvironmentalclaimconsidering,risingto65%amongGenZconsumers(seeFigure20).Afterrecentlyfacingaccusations%OFCONSUMERSWHOTRUSTANENVIRONMENTALCLAIMABOUTAPRODUCTTHATTHEYWANTTOof“virtuesignaling”incertainproducts'marketingPURCHASENEVER,RARELY,ORONLYSOMETIMES,BYAGEGROUPcampaigns,Unileversignaledachangeinitsstrategybynot“force-fitting”purposetoevery65%brand.Instead,thecompanywillfocusonshorter-termimpactsinfourkeypillars:climate,nature,51%plastics,andlivelihoods,andwillgivebrandmanagersmoreauthoritytosetmetricsandtrackprogress.41,4249%46%41%GlobalGenZ,aged18–24Millennials,aged25–40GenX,aged41–56Boomers,aged57–73+Source:CapgeminiResearchInstitute,ConsumerSurvey,October2023,N=6,500consumers.CapgeminiResearchInstitute202344Aworldinbalance2023:Heightenedsustainabilityawarenessyetlaggingactions04GENERATIVEAIHASPROMISINGUSECASESFORSUSTAINABILITYCapgeminiResearchInstitute202345AWorldinBalance2023:HeightenedsustainabilityawarenessyetlaggingactionsDigitaltechnologiesarekeytoorganizationsachievingAIcanalsobeusedtoimproveaccessibilityforpeople"Onlydigitaltheirclimateandsocialambitions.Inoursurvey,54%ofwithdisabilitiesorotherimpairments.Forexample,usingtechnologiesmoveexecutivessaythattheirorganizationusestechnologyspeechorimagerecognition,AItechnologiescanenhanceatthespeedandsuchasAI,automation,ordigitaltwinstoachievetheircommunication,navigation,andinteractionforthosewithscalenecessarytosustainabilityagenda.Accordingtoareportfromthehearing,vision,mobility,andotherdisabilities.Ava,anachievethekindofInternationalTelecommunicationsUnion(ITU,aUNbody),AI-poweredtranscriptionapp,providesdeafandhard-ofdramaticreductiondigitaltechnologycouldhelpreduceglobalcarbonemissionshearingpeoplelivecaptionsofanyconversationsintheinemissionsthatweby17%.43“Onlydigitaltechnologiesmoveatthespeedandperiphery.46needtoseeinthescalenecessarytoachievethekindofdramaticreductionnext10years."inemissionsthatweneedtoseeinthenext10years,”saysFurther,theimplicationsofutilizinggenerativeAItoachieveIngerAndersen,UNEPExecutiveDirector.44sustainabilitytargetswillbefar-reaching.Forexample,INGERANDERSENgenerativeAIcancreatecountlessdesignprototypesinWhilewide-rangingdigitaltechnologiescanacceleratetheminutes,reducingwasteduringtheprocess.Similarly,itcanUNEPExecutiveDirectortransitiontoagreeneconomy,fromautomationandIoTtohelpanalyzeabuilding’sdesign,constructionmaterials,andblockchainanddigitaltwins,AIinparticularisrapidlygainingenvironmentalconditionstogenerateadetailedenergymomentuminthefightagainstclimatechange.AIcanmakeanalysis,identifypotentialenergysavings,andsuggestmorepreciseweatherpredictions,trackairquality,andimprovementstomeetsustainabilitystandards.47measurethecarbonfootprintofproducts/servicesorevensupplychains,whileenablingsmarterdecision-makingandreal-timemonitoring.45CapgeminiResearchInstitute202346AWorldinBalance2023:HeightenedsustainabilityawarenessyetlaggingactionsGenerativeAIisexpectedFIGURE21.tobeacorefocuswithinsustainabilitystrategies59%ofexecutivesgloballybelievegenerativeAIwillbecentraltotheirsustainabilityeffortsOurrecentresearchongenerativeAIusecasesacrossindustriesfoundthatnearlyallexecutives(96%)inour%OFEXECUTIVESBYINDUSTRYWHOAGREEWITHTHESTATEMENT:GENERATIVEAIWILLPLAYAKEYsurveycitedgenerativeAIasahottopicofdiscussioninROLEINOURORGANIZATION'SSUSTAINABILITYTRANSFORMATIONEFFORTS(SEPTEMBER2023)theirrespectiveboardrooms,makingitprobablythefastestnewtechnologytogarnersuchhigh-levelinterest.48In67%ourcurrentresearch,overhalf(59%)ofexecutivesbelieve59%62%60%59%59%58%58%57%56%56%52%thatgenerativeAIwillplayakeyroleintheirorganization'ssustainabilitytransformationefforts.ThistrendisconsistentGlobalIndustrialUtilitiesEnergyAutomotiveConsumerproductsacrossindustries,withfinancialservices(67%)showingthemanufacturingmanufacturinghighestshareofexecutivessayingso(seeFigure21).Ourrecentresearchalsorevealedthatorganizationshavehighsustainabilityexpectationsofthetechnology,includingaprojected9%reductionincarbonfootprintsatorganizationallevelwithinthenextthreeyears.49FinancialservicesPublic/governmentHealthcareTelecomAerospaceandRetailandlifesciencesdefenseSource:CapgeminiResearchInstitute,SustainabilityTransformationTrendsSurvey,August–September2023,N=2,151executives,717organizations.CapgeminiResearchInstitute202347AWorldinBalance2023:HeightenedsustainabilityawarenessyetlaggingactionsOrganizationshavealreadystartedincorporatinggenerativeGeneratemoresustainabledesignprototypesdemonstrates“nichecomplementarity”(howtwoormoreAIintotheirsustainabilitystrategiesacrossoperations,salesspeciespersistandinteractinanenvironmenttogether).andmarketing,logistics,design,anddata.•AirbususesAIalgorithmsinitsgenerativedesignprocessTheresearcherstrainedtwogenerativeAIsystemstotodeveloplighter-weightpartsforitsaircraft,resultingcreatesimulatedpossiblepatchcompositionsandevaluateForecastdemandtoreducewasteinlowerfuelconsumptionand,consequently,lessenedthemunderincreasinglycomplextheoreticalecologicalenvironmentalimpact.Theinitialdesignwas45%lighterconditions.54•GenerativeAImodelscananalyzehistoricaldemandthanthetraditionalpartandisprojectedtoreduceAirbus’spatterns,markettrends,andexternalfactorstogenerateannualCO2emissionsbynearly500,000metrictonnes(mt)Improveaccessibilitydemandforecasts,therebyreducingstockouts,waste,andifrolledoutacrossitsA320fleet.52carryingcosts.Thisalsohelpsinlimitingtheenvironmental•Internetaccessibilitycanbeamajorchallengeforpeopleimpactofexcessproduction.50Automatesustainabilityreportingwithsightproblems,especiallyifawebsitedoesnotsupportscreenreaders(softwarethatallowsblindorOptimizelogisticstoreduceemissions•GenerativeAItoolscanmakecorporatesocialvisuallyimpairedpeopletoreadtextdisplayedonscreens).responsibility(CSR)reportingeasierfororganizations,GenerativeAImaybeusedtoimproveinformationaccess•GenerativeAIalgorithmscanenableoptimizationcreatingadraftreportforteamstocheckandrefine.C3asitcouldhelpvisuallyimpairedpeopleunderstandwhatoftransportationroutesbyconsideringfactorsAI,aUSstart-up,usesgenerativeAItounifyandstoretheyarelookingatbyverbalizingimagesonawebsite.suchasshipmentvolume,vesselcapacities,productdisparateESGdataandautomatereporting.53InMarch,poweredbyOpenAI’sGPT-4languagemodel,characteristics,andgeographicalconstraintstodeterminemobileappBeMyEyeslaunchedVirtualVolunteer,athemostefficientroutes.Thiswouldleadtocost,time,Protectagainstbiodiversitylossdigitalassistantforpeoplewhoareblindorwhohaveandfuelsavingsandeventuallyreducethecarbonlowvision.Usersshareimagesandtheassistantanswersemissionsassociatedwithlogistics.51•ResearchersfromtheUniversityofValencia,theInstitutoquestionsabouttheimageandprovideinstantaneous,deFísicaCorpuscularinSpain,andtheUniversityofconversationalvisualassistanceforawidevarietyofSussexexperimentedwithgenerativeAItoanalyzetasks.55speciescoexistencepatternsinvegetationpatches.SpeciescoexistenceisimportanttobiodiversitybecauseitCapgeminiResearchInstitute202348AWorldinBalance2023:HeightenedsustainabilityawarenessyetlaggingactionsManyorganizationshaveFIGURE22.takenactionagainstthenegativeenvironmentalOverhalf(57%)ofexecutivesgloballysaytheirorganizationhasstartedtomitigatetheimpactsofgenerativeAIenvironmentalimpactofgenerativeAIThecarbonfootprintofgenerativeAImodelsismassive%OFEXECUTIVESBYINDUSTRYWHOAGREEWITHTHESTATEMENT:WEHAVETAKENSTEPSTOandextendsbeyondtraining.OurpreviousresearchrevealsMITIGATETHEENVIRONMENTALIMPACTOFUSINGGENERATIVEAIMODELS(SEPTEMBER2023)thatmostexecutives(78%)areawarethatgenerativeAIcanhavealargercarbonfootprintthantraditionalITprograms.5670%65%Currently,thenetimpactofgenerativeAIoncarbonemissionsisunquantifiablebut,evenso,overhalfofexecutives(57%)in57%61%61%59%57%ourcurrentsurveysaytheirorganizationhasstartedtotakestepstomitigatetheenvironmentalimpactofusinggenerative54%53%50%50%AImodels.EventhoughgenerativeAIisstillinitsinfancy,therapidadoptionofgenerativeAItechnologiesbyorganizations48%hasthemmovingatpace.InitialmitigationstepscouldincludedevelopingguidelinesforresponsibleuseofgenerativeAI,GlobalTelecomEnergyHealthcareandRetailUtilitieslimitingtheuseofgenerativeAItoolstoselectedemployees/teams,investinginrenewableenergy,oroffsettingitsimpactAerospaceandPublic/governmentlifesciencesthroughcarboncredits,amongothermitigationmeasures.IndustrialAutomotiveFinancialConsumerproductsAerospaceanddefensetakestheleadinthisat70%,closelyservicesmanufacturingfollowedbytelecom(65%),whilehalfofexecutivesinfinancialdefensemanufacturingservices,utilities,andconsumerproductsmanufacturingsaythesame(Figure22).Source:CapgeminiResearchInstitute,SustainabilityTransformationTrendsSurvey,August–September2023,N=1,075executivesfromvaluechainfunctions.CapgeminiResearchInstitute202349AWorldinBalance2023:HeightenedsustainabilityawarenessyetlaggingactionsCapgeminiResearchInstitute202350Aworldinbalance2023:Heightenedsustainabilityawarenessyetlaggingactions05RECOMMENDATIONS:HOWORGANIZATIONSCANACCELERATETHEIRSUSTAINABILITYTRANSFORMATIONSCapgeminiResearchInstitute202351AWorldinBalance2023:HeightenedsustainabilityawarenessyetlaggingactionsTotransformeffectivelyrequiresenterprise-level•And,ofcriticalimportance,theCHROneedstostaffforFIGURE23.coordination,functionalinvolvement,andanoverhaulofsustainability,whichrequiresnewskillsetsandanewtheoperatingmodelandbusinessprocesses.Lastyear’sleadershipmodel.KeyactionsforsustainableandinclusivetransformationreportfocusedonspecificrecommendationsandactionsforeightC-suiteexecutivesinordertolaythegroundworkEachleadermustensureasolidfoundationwithintheir01Ensuresustainability02Embedsocialforanenterprise-widesustainabilitytransformation.Thedepartmentsandteamsandensureco-ordinationbetweenisaboardroomsustainabilityintherecommendationswesharedholdtruetoday:teams.Thecurrentresearchhasledustomakesomeprioritybusinessstrategyadditionalrecommendationstolastyear’slist(seeFigure23).•TheCEOmustmakesustainabilityabusinesspriority03Focusonquantifying04Embracecircularand59%Scope3emissionsinclusivedesign•TheCFOmustarticulatethebusinesscaseforaccuratelysustainabilityandensureitisunderstoodthroughouttheofexecutivessaythattheirboardorganizationofdirectorsisactivelyengagedwith05Closethegap06Explorethepotentialsustainabilitystrategyintention-actionoftechnologyto•TheCMOmustimplementprotocolstoavoidachieveclimategoalsgreenwashingsustainabilitycredentials•Thechiefdesign/productofficerneedstoembedsustainabilityasacoredesignprinciple•Thechiefprocurement/supplychainofficerneedstoworkwithsupplierstoensuretheyachievesustainabilitygoals•TheCTO/CIOmuststrengthensustainableITinitiatives•TheCOOneedstobuildthefoundationofthesustainableorganizationSource:CapgeminiResearchInstituteanalysis.CapgeminiResearchInstitute202352AWorldinBalance2023:HeightenedsustainabilityawarenessyetlaggingactionsEnsuresustainabilityisaFIGURE24.boardroompriorityEightin10frontrunnershaveengagedboardsandprojectsaddressingenvironmentalInthe2022report,weemphasizedtheimportanceofboardsandsocialsustainabilityaccordinglong-termprioritytosustainability.Thegoodnewsisthatmostexecutivesinthisyear’ssurvey(59%)agreethat%OFEXECUTIVESWHOAGREEWITHTHESTATEMENTSBELOWtheirboardofdirectorsisactivelyengagedwithsustainabilitystrategy.OurcurrentresearchrevealsthattheseOurboardofdirectorsprioritizessustainabilityandis46%84%organizationsarelikelytohaveprogressedfurtherontheiractivelyengagedwithourorganization’ssustainabilitystrategy46%82%transformationjourneys,withafocusonsocialsustainability.Forexample:Myorganizationtakesonsustainabilityprojectsthataddressbothenvironmentalandsocialaspects•71%ofexecutivesatorganizationswithengagedboardssaytheyareredesigningtheirbusinessoroperatingmodelsFrontrunnersBeginnerstobemoresustainable(comparedwith57%onaverage)Source:CapgeminiResearchInstitute,SustainabilityTransformationTrendsSurvey,August–September2023,N=668•88%ofexecutivesatorganizationswithengagedboardsorganizations,56frontrunners,226beginners.saythat,by2040,theywillhavecompletelynewbusinessmodelsthataremoresustainable(versus53%onaverage)•96%ofexecutivesatorganizationswithengagedboardssaytheyarefocusingonthesocialdimensionofESG(comparedwith56%onaverage)ThechangeinperspectivetoacceptsustainabilityasaninvestmentopportunityshoulddriveconsensusbetweentheboardandtheC-suite.Frontrunnershaveanedgewhenitcomestoengagedboardsanddirectorsandincombiningenvironmentalandsocialsustainabilityobjectives(seeFigure24).CapgeminiResearchInstitute202353AWorldinBalance2023:HeightenedsustainabilityawarenessyetlaggingactionsItisalsoimportanttoensurethesustainabilitybusinesscaseEmbedsocialiswellarticulatedandunderstoodbytheboard,managementsustainabilityintheteam,andemployeesaswellasexternalaudiencessuchbusinessstrategyasinvestorsandcustomers.Thisresearchrevealsthatexecutivesacrossfunctionshaveagreaterappreciationfor,AsprioritizationoftheUNSDGsgainstractionandclimateandclarityin,thesustainabilitybusinesscasecomparedtoandsocialobjectivesbecomeintertwined,organizationsmustlastyear.Withmorestringentregulationscomingintoeffecttakecarenottooverlookthesocialsustainabilityagenda.(e.g.,EUCSRD)thatarechangingtheoperatingenvironment,Socialobjectivesshouldbeintegratedintostrategywithexecutivesarerealizingthattheirorganization’slicensetothesamelevelofpriority.Organizationsmustrecognizeoperatewilldepend,inpart,ontheirabilitytoreportontheurgencyofdevelopingasocialsustainabilitystrategy.sustainabilitydata.AclearbusinesscasewillalsohelpinArecentstudyof2,000oftheworld’smostinfluentialfulfillingregulators’pushfor“doublemateriality,”aconceptorganizationsfoundthatonly1%arepositionedtomeetthethatconsidershowacompany’sactionsimpactsocietyandUN’s2030SDGs.58theenvironmentandhowsustainabilityandclimateaffectitsbusiness.AspartofCSRDrequirements,organizationsmustconductadoublematerialityassessment,whichwillhelpthemdeterminewhichsustainabilityissuesarematerialandshouldbeincludedintheirreporting.57CapgeminiResearchInstitute202354AWorldinBalance2023:HeightenedsustainabilityawarenessyetlaggingactionsTakingtheUNGlobalCompactdefinitionofsocialFIGURE25.sustainability,therearefourmainaudiencesthatorganizationsmustconsider:employees,customers,supplyFrontrunnershaveadvancedsocialsustainabilityactionschainworkers,andlocalcommunities.Ourresearchrevealsthatorganizationsareactingmosteffectivelytobenefit%OFEXECUTIVESWHOAGREEWITHTHESTATEMENTSBELOWtheirownworkforces,butthattheycandomoretosupportworkersintheirsupplychainandcustomersintheirlocalEngagingemployeesinlearninganddevelopmentisatop55%84%communities.Organizationscanworktoupdatesuppliers’priorityforourleadership48%77%criteriatoincludealivingwagedimension,andalsostrive46%73%tomakeproducts/servicesmoreaccessibleandinclusivetoWesupporteducationandskillsinitiativesinourpeoplewithdisabilities,healthconditions,orimpairments.localcommunitiesFrontrunnersareleadinginengagingemployeesinlearningandsupportinglocalcommunitieswitheducationandpolicyWepromotepublicpoliciesthatsupportsocialsustainability(seeFigure25).FrontrunnersBeginnersSource:CapgeminiResearchInstitute,SustainabilityTransformationTrendsSurvey,August–September2023,N=668organizations,56frontrunners,226beginners.CapgeminiResearchInstitute202355AWorldinBalance2023:HeightenedsustainabilityawarenessyetlaggingactionsFocusonquantifying•Establishingashared,singlesourceofemissionsdatathat•EquippingteamswithskillsandtoolstounderstandandScope3emissionscentralizesthestorageandcollectionofScope3data;anduseScope3emissionsdatainbusinessdecisions.accuratelyFIGURE26.96%TofullyunderstandtheirScope3emissionsandidentify66%leversfordecarbonization,organizationsmusttakeaSevenin10frontrunnersaretrackingScope3emissionscomprehensiveviewoftheirsupplyandvaluechainimpacts.CatherineBals,SustainabilityDepartmentLeadatProximus,%OFEXECUTIVESWHOAGREEWITHTHESTATEMENTSBELOWatelecomorganization,says:“OurmajorchallengetodayisaddressingourScope3emissions…First,wewanttoEmployeesunderstandhowourbusinessimpactstheencourageexternalchangeandactionfromoursuppliersenvironmentalongthevaluechainandcustomers.Foroursuppliers,thismeanssettingupasupplier-engagementprogramandintegratingnewWeareabletomeasureandcollectdataonallour71%requirementsintoourcontractsandRFPs[requestsforScope3emissions40%proposals],suchastheobligationtohaveSBTi-approvedtargets.WewanttonudgeourcustomerstorepairmoreFrontrunnersBeginnersandreducefrequencyofrenewal.WewanttomakethemawareoftheimpactoftheirequipmentandlifestylechoicesSource:CapgeminiResearchInstitute,SustainabilityTransformationTrendsSurvey,August–September2023,N=668ontheclimate.”59Frontrunnershaveanedgeintermsoforganizations,56frontrunners,226beginners.employeesunderstandingtheenvironmentalimpactsoftheirbusinessandmeasuringScope3emissions(seeFigure26).Organizationscantakeadata-centeredapproachandfocusfirston:•IdentifyingScope3hotspotsfocusingoncriticaldataandmeasurements;CapgeminiResearchInstitute202356AWorldinBalance2023:HeightenedsustainabilityawarenessyetlaggingactionsEmbracecircularandItisalsocriticalthatorganizationsembraceinclusivedesigninclusivedesignwithinproductdevelopmentandensuredesignteamshavediverserepresentation,sotheyarewell-positionedtobuildInthe2022report,westressedtheimportanceofembeddinginclusiveproducts.sustainabilityasacoredesignprinciple.Thisyear’sresearchrevealslimitedordecliningmovementonkeyparametersClosetheintention-actionwithinproductdesign.Certainmeasureshaveadvancedgapsincelastyear,suchasremovingfossil-fuelfeedstocksourcesandreducinguseofvirgintimber.InthebroaderconceptsInordertojustifytheirenvironmentalandsocialclaims,ofembeddingcircularityinstrategy,performinglife-cycleorganizationsmustclosethegapbetweenstatedgoalsassessment,anddesigningproductswithlongerlifecycles,andconcreteactions.Thereisarealriskofaccusationsofwehaveseenstagnationorevendecline.greenwashing.Itcanaffectthebottomline,derailpublicconfidence,andriskhugefinesfromregulators.InourOrganizationsmustthinkbeyondisolateddesignproblemscurrentresearch,onethirdofconsumerssuspectthatandconsidertheirdesignprocessesasawhole,mitigatingorganizations/brandsaregreenwashingtheirsustainabilitypointsofsocialandenvironmentalimpactthroughtheinitiativesand48%never,rarely,oronlysometimesentireproductlifecycle.Organizationsmustembracetrustenvironmentalclaimsaboutpotentialpurchases.AcircularprinciplesintheirbusinessmodelstoreduceHarvardBusinessReviewstudyfoundthatperceptionswaste,extendthelifespanoftheirproducts,andappealtoofgreenwashingnotonlydamageanorganization’ssustainability-consciousconsumers.Dr.CarolineCassignol,reputation,butalsonegativelyimpacthowcustomersSeniorKeyExpertResearchScientistatSiemensTechnology,experienceitsproductsorservices.Theresearchestimatesemphasizestheneedforamindsetshiftinproductdesignthatorganizationswhichstakeholdersperceivetobeanddevelopment:“Wegrewupinaworlddominatedbygreenwashingsuffer,onaverage,a1.34%dropintheirthelineareconomy.Now,weneedtoshifttoacircularAmericanCustomerSatisfactionIndex(ACSI)score,triggeringeconomymindset.Wemustquestioneverythingwedo.”60accusationsofcorporatehypocrisy.61CapgeminiResearchInstitute202357AWorldinBalance2023:HeightenedsustainabilityawarenessyetlaggingactionsExplorethepotentialofsomeusecasesalreadyexist.Forexample,generativeInaddition,climatetechnologies–definedastechnologiestechnologytoachieveAIforsustainabilitycanresultindesignandoperationalspecificallydesignedtotackleenvironmentalchallengesclimategoalsefficiencies,leadingtoreducedemissions.However,itwillincludingclimatechange,resourcedepletion,andbiodiversitybeimportantthatorganizationscontinuetomitigatethelossandmitigatetheirimpact–willbecriticaltoachievingOurresearchrevealsthatthemajority(59%)ofexecutivesnegativeenvironmentalimpactsoftraininganddeployingambitions.ExamplesofclimatetechincluderenewablebelievethatgenerativeAIwillplayakeyroleintheirgenerativeAImodelsastheirusebecomesmorewidespread.energy,carbonstorage,biofuels,low-carbonhydrogen,organization'ssustainabilitytransformationefforts.OrganizationsshouldalsoexplorehowgenerativeAIcanandsyntheticbiology,amongothers.TheseinnovativeWhileitisstilltooearlytofullyquantifyitsbenefitsimprovetheaccessibilityandinclusivityofproductsandtechnologieswilldriveasignificantportionoforganizations'services.Thisrequiresthatindividualswithdisabilitiesreductioninemissions,andinvestinginclimatetechwillbeorotherimpairmentsplayanactiveroleinshapingtheasessentialtoreachingnetzeroandotherclimategoalsastechnology’srolewithintheorganization.investinginnewbusinessandoperatingmodels.59%ofexecutivesbelievethatgenerativeAIwillplayakeyroleintheirorganization'ssustainabilitytransformationeffortsCapgeminiResearchInstitute202358Aworldinbalance2023:HeightenedsustainabilityawarenessyetlaggingactionsConclusionofbiodiversity.Itisalsonowcriticaltopromoteequityandsocialjustice,healthandwellbeing,andeconomicstabilityasOurresearchrevealsthatgrowingnumbersoforganizationspillarsofsocialsustainabilityandsustainabledevelopment.acrossindustriesunderstandtheimportanceofsustainability,Theroleoforganizationsincurbingthedetrimentalimpactsareclearonthebusinesscase,andacknowledgethebenefitsofindustrialandhumanactivityonourplanetisparamount.ofincorporatingsustainablepracticesandprocessesintoThereisapressingneedformoredaringandexpansivetheirbusinesses.Thisrapidimprovementinsentimentinonesustainabilityimplementation.Becomingatrulysustainableyear’stimeissignificant;however,in2023,translationofthisenterprisenecessitatesenterprise-widetransformation,withunderstandingintoincreasedinvestmentlags.Whilemoreakeenfocusonevaluatingtheentirevaluechainthroughaorganizationsaresettinggoalsandpriorities,theymuststepsustainabilitylens.Frontrunnershavegainedanadvantage,butuptheiractionsonScope3emissions,sustainableproductotherscanemulatethemtoexpeditetheirjourneystowardsdesign,andreportinganddisclosingsustainabilitydatawhilesustainability.atthesametimemaintaintheirincreasingfocusonsocialsustainability.Thisisapivotaltimeinthebattleagainstclimatechange,thescarcityofvitalresources,andthealarminglossCapgeminiResearchInstitute202359AWorldinBalance2023:HeightenedsustainabilityawarenessyetlaggingactionsResearchmethodologyWesurveyed2,151executivesemployedat718%OFEXECUTIVESBYORGANIZATIONENTERPRISE-LEVELREVENUE,INUSDorganizations,eachwithmorethan$1billioninannualrevenue,across13countriesinNorthAmerica,Europe,47%48%20%20%18%17%andAsia-Pacificandin11industries.Executivessurveyed$1bn–$5bn$20bn+weredirectorlevelandaboveand50%werefrom$5bn–$10bn15%15%corporatefunctions,suchasstrategy,sustainability,$10bn–$20bnsales,andmarketing;50%werefromvaluechainfunctions,suchasproductdesign,R&D,procurement,September2022September2023andlogistics.Wesurveyedthreeexecutivesfromeveryorganization.TheglobalsurveytookplaceinAugustandSeptember2023.Thedistributionofexecutivesandtheirorganizationsisprovidedinthefollowingfigures.Wealsoconductedaglobalsurveyof6,500consumersovertheageof18acrossthe13countries.Thestudyfindingsreflecttheviewsoftherespondentstoouronlinequestionnaireforthisresearchandareaimedatprovidingdirectionalguidance.PleasecontactoneoftheCapgeminiexpertslistedattheendofthereporttodiscussspecificimplications.Notethat,foranychartthatcompares2022and2023data,thesampleexcludesrespondentsfromNorway,astheydidnotpartakeinthe2022survey;hence,intheseanalyses,N=2,001respondentsand668organizations.CapgeminiResearchInstitute2023%OFEXECUTIVESBYJOBTITLE60AWorldinBalance2023:Heightenedsustainabilityawarenessyetlaggingactions%OFEXECUTIVESBYLOCATIONOFHEADQUARTERSOFCURRENTORGANIZATION60%61%9%8%9%8%8%9%9%9%8%9%8%37%37%9%8%8%7%9%8%8%7%7%7%8%7%7%7%AustraliaFranceIndiaJapanNorwaySwedenUSCanadaGermanyItalyNetherlandsSpainUKDirectorVicePresident2%2%ExecutiveSeptember2022September2023September2022September2023CapgeminiResearchInstitute202361AWorldinBalance2023:Heightenedsustainabilityawarenessyetlaggingactions%OFEXECUTIVESBYINDUSTRYOFCURRENT%OFEXECUTIVESBYDEPARTMENT/FUNCTIONORGANIZATIONUtilities7%Manufacturingandproduction7%Telecom8%Supplychainandlogistics8%Retail8%Sourcingandprocurement10%Public/government8%Operations9%IndustrialmanufacturingHealthcareandlifesciences12%Productdesign/development7%11%Innovation/R&D8%Financialservices11%Energy9%Humanresources9%IT9%Consumerproducts7%manufacturing10%Salesandmarketing7%Automotive9%Financeandaccounting9%Aerospaceanddefense8%Sustainability8%9%Corporatestrategy/strategic5%12%planning11%9%11%9%9%9%9%9%11%10%10%10%10%8%8%9%9%7%8%September2023September2022September2023September2022Source:CapgeminiResearchInstitute,SustainabilityTransformationTrendsSurvey,August–September2022,N=2,004executives,668organizations;August–September2023,N=2,151executives,718organizations.Utilitiesincludeselectricutilities,gasutilities,waterutilities,andwastemanagement;Energyincludesoilandgas,alternative/renewableenergy,andenergyservices;Consumerproductsmanufacturingincludesapparel,footwear,household,andpersonalcare;andFinancialservicesincludesretailbankingandinsurance.CapgeminiResearchInstitute202362Aworldinbalance2023:Heightenedsustainabilityawarenessyetlaggingactions%OFCONSUMERSBYAGEGROUP%OFCONSUMERSBYGENDER%OFCONSUMERSBYCOUNTRYOFIDENTITYRESIDENCE29%30%Australia8%Canada8%26%France8%Germany8%India8%15%Italy8%49%51%Japan8%Netherlands8%Norway8%Spain8%Sweden8%GenZ,Millennials,GenX,Boomers,UK8%aged18-24aged25-40aged41-56aged57-73+US8%September2023September2023ManWomanSeptember2023Source:CapgeminiResearchInstitute,ConsumerSurvey,October2023,N=6,500consumers.CapgeminiResearchInstitute202363AAWworldinBbalance2023:HeightenedsustainabilityawarenessyetlaggingactionsAppendixStatementsusedtoevaluatethesustainabilitymaturityoforganizationsinoursurvey.AXISPILLARSTATEMENTCorporatefunctionsVisionandleadershipTopleadershipsharesacommonvisionofhowthebusinessneedstochangetobecomesustainableCorporatefunctionsTalentThesustainabilityvisioniswellintegratedintothecorestrategyoftheorganizationWehavedefinedacorporatepurposethatextendstotheenvironment(i.e.,purposemeaningareasonforbeingbeyondprofit)SustainabilityaspectsareconsideredincorporatedecisionsacrossthecompanyWehaveaclearlydefinedprioritylistofsustainabilityinitiativestobeimplementedinthenextthreeyearsSustainabilityispartofeachofourC-suiteexecutives’agendaWeareredesigningourbusiness/operatingmodel,sotheyaremoresustainableWehaveastrategytotransitiontorenewableenergyforallsources(i.e.,aswitchfromconventionaltorenewableenergyforelectricity,fuel,heating)Circularity(i.e.,aproductiscreatedwithitsownend-of-lifeconsidered;oncetheuserisfinishedwiththeproduct,itgoesbackintothesupplychaininsteadofthelandfill)isakeycomponentofoursustainabilitystrategyWehaveinternalgovernancepoliciesandproceduresrelatingtoenvironmentalsustainabilityUpskilling/reskillingonhardsustainabilityskills(e.g.,renewableenergy,carbonaccounting,environmentalscience/engineering,dataanalysis/visualization)isatoppriorityforourcompanyUpskilling/reskillingonsoftsustainabilityskills(e.g.,leadership,innovation,communications,designthinking)isatoppriorityforourcompanyCapgeminiResearchInstitute202364AWorldinBalance2023:HeightenedsustainabilityawarenessyetlaggingactionsAXISPILLARSTATEMENTCorporatefunctionsTalentWeactivelyrecruitandhirenewtalentwithstrongsustainabilityskillsCorporatefunctionsCultureWetrainouremployeestoadoptsustainablepracticesin-officeCorporatefunctionsITWeequipouremployeeswithtoolstosupporttheirlow-carbontransition(e.g.,givingreusablewaterbottlestoreducesingle-useCorporatefunctionsFinanceandaccountingplastic,utilitiestrackerforcarbonfootprint)WetrainemployeesontheimportanceofsustainingtheenvironmentEmployeeshavesustainabilityKPIsthattheyareevaluatedagainstaspartofperformancemanagementLeadershavesustainabilityKPIsthattheyareevaluatedagainstaspartofperformancemanagementWehaveemployeeswitheco-designandsustainabledesignskillsWeencourageresearchandexperimentationtodevelopnewinitiativesforsustainabilityWeprovideautonomytoemployeestodevelopnewsolutionstosustainabilitychallengesWeactivelycollaboratewithinterestedstakeholders,includingcustomers,investors,academia,andgovernments,todevelopandpromotesustainableapproachesOurleadersarefocusedonprofitattheexpenseofourenvironmentalfootprintAlloursustainabilityreportingandclaimsarebackedbyrobustauditeddataWeuseagreencloudarchitectureforourdatacenters(whichreducesdatacenterpowerconsumption)Weeco-designourITapplications(i.e.,designingforthelowestenvironmentalimpact,suchasusing"sleepmodes"onlaptops)Weidentifyenergy-intensiveapplicationsandtakestepstoimprovetheirenergyperformanceWehavegreenpoliciesforIThardwareandservicesprocurement(e.g.,environmentaldisclosureforITvendors)WeincludeacarbonemissionsassessmentwhenallocatingITspendOurorganizationhasasustainableITstrategyandroadmapWeincludeanassessmentofenvironmentalexternalitieswhenevaluatingprojectstofund(e.g.,pollutionthatmightbecausedbytheprojectthatdiminishespropertyvaluesorhealthofpeopleinthesurroundingarea)CapgeminiResearchInstitute202365AWorldinBalance2023:HeightenedsustainabilityawarenessyetlaggingactionsAXISPILLARSTATEMENTCorporatefunctionsFinanceandaccountingWereportoursustainabilityimpacts(e.g.,waterusage,GHGemissions,hazardouswasteproduced),alongwithourfinancialCorporatefunctionsSalesandmarketingperformance,onaquarterly/annualbasisValuechainfunctionsTechnologyWehaveassetsinvestedinESGportfolios(i.e.,fundsthatincorporatescreeningcriteriaforenvironmental,social,andgovernanceissues,orinvestinsociallyresponsiblecompanies)Wehavemadefossilfueldivestmentpledges(i.e.,acceleratingtheadoptionoftherenewableenergytransitionthroughthestigmatizationoffossilfuelcompanies)Weinvestincarbonoffsets(suchaspurchaseofcreditsorincreaseincarbonstoragethroughtreeplanting,landrestorationetc.)tobalanceoutourcarbonemissionsWeeducatecustomersabouttheimportanceofadoptingsustainablepracticesWeoffercompetitivepricingtoencouragemorepeopletoconsume/purchasesustainableproducts/servicesWecommunicateacarbonfootprintforeveryproduct/servicewesellWeconsiderenvironmentalsustainabilitywhendesigningourbrandingandmarketingcampaigns(e.g.,fewerphysicalevents)WemeasuretheenvironmentalimpactoftechnologiesbeforeusingthemWeusetechnologytominimizelandfillusageefficiently(e.g.,smartwastemanagementfortracking/sorting,usingrobotsforrecycling,usingAI/MLtoreducewaste)WeusetechnologysuchasAI,automation,ordigitaltwinstoachieveoursustainabilityagendaWeareusingIoT/IIoTtomonitor/reduceenergyconsumptionWeuse3DprintingtoproducelesswasteandsavefuelrequiredfortransportWeusedigitaltechnologies(e.g.,AR/VR,collaborationtools)toreducetravelneedsofemployeesWeuseblockchain/smartcontractstomakeoursupplychainmoresustainableWeusetoolssuchassupplychaincontroltowersformonitoringandmeasuringourESGmetricsWeuseAI/MLtooptimizedatacenterutilizationSustainability-relateddataisavailableandsharedacrosstheentireorganization(e.g.,functions,businessunits,employees,managers)CapgeminiResearchInstitute202366AWorldinBalance2023:HeightenedsustainabilityawarenessyetlaggingactionsAXISPILLARSTATEMENTValuechainfunctionsTechnologyValuechainfunctionsSourcingSustainability-relateddataisavailabletointerestedstakeholdersexternaltotheorganization(e.g.,investors,activists,governments,consumers)ValuechainfunctionsInnovation/R&D/productdesignWeconsidertheESGratingsandenvironmentalpledgestakenbysuppliersduringsupplierselectionWeareworkingwithourtier-1supplierstoidentifymeasuresforreducingtheircarbonemissionsValuechainfunctionsManufacturingWeareworkingwithourtier-2andtier-3supplierstoidentifymeasuresforreducingtheircarbonemissionsWeusesupplierswhohavevalidatedSBTItargetstoprocurerawmaterialsWeareworkingtowardsreducingdeforestationinoursupplychainWearedesigningproductssotheycanservetheiroriginallyintendedfunctionslongerWeuseAI/dataanalyticstoaidinthediscoveryofoptimalrawmaterialsWefollowsustainableprototypingandtestingprocesses(e.g.,useofadditivemanufacturingor3Dprinting)Weareredesigningproductstoremovefossilfuelfeedstocksources(suchascoal)Weareredesigningproductstohavealowerimpactonforests(e.g.,usinglesswoodsofewertreesarecutdown)Wearebuildingsolutionstoreducetheenvironmentalfootprintofourendusers/customersWeperformLCA(lifecycleassessment)onallofourproducts/servicesWeareminimizingover-productionandwastageinproductionWeareshiftingourmanufacturingfootprinttoplaces/localeswithlowcarbonalternativesWeareredesigningprocesses,sotheyconsumelessenergy(e.g.,improvingprocessheatingintheproductionprocess,poweringdownequipmentattheendoftheday)WemeasuretheenergyconsumptionofourindustrialprocessesWeuseresponsiblerecyclerswhodonotexportoure-wastetodevelopingcountriesorimproperlydisposeofitWearereducingfoodwasteinouroperations(e.g.,byimprovingaccuracyofforecasting,providingclearerexpirationdates)Wehaveimplementedawaterstewardshipprogram(i.e.,usingwaterinawaythatissociallyequitable,environmentallysustainable,andeconomicallybeneficial)CapgeminiResearchInstitute202367AWorldinBalance2023:HeightenedsustainabilityawarenessyetlaggingactionsAXISPILLARSTATEMENTValuechainfunctionsManufacturingWeactivelyworktorecoverwaste(i.e.,usingwasteasaninputmaterialtocreateusefulproductsasnewoutputs)Wetakebackend-of-lifeproductsfromcustomerstousethemintheremanufacturingprocess/upcycleRecyclingproductsisacoreaspectofourmanufacturingstrategyWemonitortheconversionofnaturalecosystems(i.e.,changesowingtodeforestation)onourowned/managedlandsWeinvestinconservingnaturalhabitats(suchasrainforests)Weareadoptingplant-basedfoodinouroperations(e.g.,offeringonlyvegetarianmeals/snacksinoffice,promotingplant-baseddietstoemployees/customers)ValuechainfunctionsLogisticsWeuseanalyticsforoptimizinglogisticstoreducetravelandassociatedemissionsWehaveadoptedeco-friendlytransportationstrategiestoreduceemissions(e.g.,useoflow-carbonfuels,electricvehicles,replacingoldfleetswithmoreenergy-efficientones)WehavededicatedreportingfromourtransportationsuppliersonthecarbonimpactoftheirservicesTechaccelerators--Theextenttowhichorganizationshaveimplementedthefollowingintheirsustainabilitystrategyandpractices:•AI/machinelearning•Hydrogen•Automation•Gigafactories•AR/VR•Electrification•Collaborationtools•Smartgrids•3Dprinting•Bioeconomy•Digitaltwins•Carboncapture,utilization,andstorage•IoT/IIoT•RoboticsSource:CapgeminiResearchInstituteanalysis.CapgeminiResearchInstitute202368AWorldinBalance2023:HeightenedsustainabilityawarenessyetlaggingactionsReferences7.NatureCommunications,“Theglobalcostsofextreme13.EnvironmentalProtectionAgency,“SummaryofInflationweatherthatareattributabletoclimatechange,”ReductionActprovisionsrelatedtorenewableenergy,”1.StockholmResilienceCentre,“PlanetaryBoundaries:AllSeptember29,2023.June2023.AccessedOctober2023.planetaryboundariesmappedoutforthefirsttime,sixofninecrossed,”September2023.AccessedOctober8.NationalOceanicandAtmosphereAdministration14.FinancialTimes,“USgreentechnologyinvestmentleaves2023.(NOAA),NationalCentersforEnvironmentalInformationEuropeintheshade,”August2023.(NCEI),“USBillion-dollarweatherandclimatedisasters,”2.ScienceAdvances,“Earthbeyondsixofthenine2023.AccessedNovember2023.15.Ibidplanetaryboundaries,”September2023.AccessedOctober2023.9.PlanA,“TheCorporateSustainabilityReportingDirective16.EuropeanEnvironmentalBureau,“Redcardto(CSRD),”July2023.AccessedOctober2023.greenwashingandearlyobsolescence:EUParliament3.TimeMagazine,“Ikea’sJesperBrodinonAI,ditchingvotestostrengthenconsumerprotection,”May2023.thecatalogue,andmaking‘disposable’furniture10.PlanA,“EUCorporateSustainabilityDueDiligenceAccessedOctober2023;EuropeanCommission,“Greensustainable,”June2023.AccessedOctober2023.Directive(CSDDD),”July2023.AccessedOctober2023.claims,”website.AccessedOctober2023.4.CouncilonForeignRelations,“Theweatherofsummer11.Forbes,“TheSECmaybeoversteppingitsauthorityin17.AdvertisingStandardsAuthority,“UpdatetoCAPand2023wasthemostextremeyet,”September2023.ESG/climate-relateddisclosurestandards,”August2023.BCAPguidanceonmisleadingenvironmentalclaims,”AccessedOctober2023.AccessedOctober2023.June2023.AccessedOctober2023.5.EuropeanCommission,AugustClimateBulletins,12.UNEnvironmentProgramme,“TheTaskforceonNature-18.NetZeroTracker,"Netzerotargetsamongworld’slargest“Summer2023:thehottestonrecord,”September2023.relatedFinancialDisclosures(TNDF)launchesitsfinalorganizationsdouble,butcredibilitygapsundermineAccessedOctober2023.recommendations,”September2023.AccessedOctoberprogress,”June2023.AccessedOctober2023.2023.6.WorldEconomicForum,“Climatechangeiscostingthe19.ScienceBasedTargets,“SBTimonitoringreport2022,world$16millionperhour:study,”October12,2023.Lookingbackat2022andmovingforwardto2023andbeyond,”August2023.AccessedOctober2023.CapgeminiResearchInstitute202369AWorldinBalance2023:Heightenedsustainabilityawarenessyetlaggingactions20.CapgeminiResearchInstitute,“Preservingthefabricof28.EuropeanParliament,“Directiveonadequateminimum36.Mashable,“Legodivesintokids’complexemotionslife:Whybiodiversitylossisasurgentasclimatechange,”wages”,October2022.andidentitieswithnewFriendstoys,digitalcontent,”September2023.February2023.AccessedOctober2023.29.ABCNews,“Here’sthedifferencebetweena21.Capgemini,“Fromstrolltosprint–Araceagainsttimefor‘minimumwage’and‘livingwage,’andwhyitmatters,”37.Cosmopolitan,“Lancômedebutsnewmotorizedmakeupcorporatedecarbonization,”July2023.January2023.applicationdevicetohelpthosewithlimitedmobility,”January2023.AccessedOctober2023.22.Ibid.30.LivingWageFoundation,corporatewebsite,AccessedNovember2023.38.CapgeminiResearchInstitute,“Whatmatterstotoday’s23.G&AInstitute,“All-timehighofsustainabilityreportsconsumer:2023consumerbehaviortrackerfortheamongUSpubliclytradedorganizations:96%ofS&P50031.WorldBenchmarkingAlliance,“2022socialconsumerproductsandretailindustries,”January2023.and81%ofRussell1000,”2022.AccessedOctober2023.transformationbaselineassessment,”January2022.39.EdSurge,“Can‘equity-basedpricing’makeedtech24.CapgeminiResearchInstitute,Conversationsfor32.FairWageNetwork,“Unilever:Accreditedasgloballivingproductsmoreaccessible?”June2020.AccessedTomorrow:Whysustainabilitymeanscollectiveaction,wageemployerin2022.”AccessedOctober2023.October2023.bolderleadership,andsmartertechnologies,March2021.33.FairWageNetwork,“FairwagemethodwithinH&Mfair40.Capgemini,Bloom,DassaultSystems,“Socialintelligence25.Verizon,“Environmental,SocialandGovernance(ESG)livingwagestrategy.”AccessedOctober2023.forclimateaction,”June2023.Report2022,”AccessedNovember2023;Verizoncorporatewebsite,diversityandinclusion.Accessed34.FairWageNetwork,“L’Oréal:Ensuringalivingwage41.GreenBiz,“UnileverCEOsignalsradicalshiftOctober2023.paymentby2030withinitshumanrightspolicy.”sustainabilityagenda,”November6,2023.AccessedOctober2023.26.NetworkforBusinessSustainability,“WhatIsSocial42.Telegraph,“UnilevertotonedownsocialpurposeasSustainability?”December2021.35.CapgeminiResearchInstitute,“Thekeytodesigning‘virtualsignaling’backlash,”October26,2023.inclusivetech:creatingdiverseandinclusivetechteams,”27.LivingWageFoundation,“TheSustainableDevelopmentJuly2021.43.InternationalTelecommunicationsUnion(ITU),"TurningGoalsandthelivingwage,”October2022.digitaltechnologyinnovationintoclimateaction,"2019.CapgeminiResearchInstitute202370AWorldinBalance2023:Heightenedsustainabilityawarenessyetlaggingactions44.UnitedNationsEnvironmentProgram,“Withnewpact,51.Logility,“Revolutionizingsupplychainplanning:The56.CapgeminiResearchInstitute,“Harnessingthevalueoftechcompaniestakeonclimatechange,”March2021.powerofgenerativeAI,”July2023.generativeAI,”June2023.AccessedOctober2023.52.Autodesk,“AutodeskandAirbusdemonstratetheimpact57.EuropeanCommission,“Sustainablefinance:Political45.UnitedNationsEnvironmentProgram,“Howartificialofgenerativedesignonmakingandbuilding,”Novemberagreementoncorporatesustainabilityreportingintelligenceishelpingtackleenvironmentalchallenges,”2019;CapgeminiResearchInstitute,“HarnessingthedirectivewillimprovethewayfirmsreportsustainabilityNovember2022.AccessedOctober2023.valueofgenerativeAI:Topusecasesacrossindustries,”information,”July2022.June2023.46.Ava.mecorporatewebsite.AccessedOctober2023.58.WorldBenchmarkingAlliance,“2022social53.C3.ai,“Monitor,report,andaccelerateESGperformancetransformationbaselineassessment,”January2022.47.Maket,“ThebenefitsofgenerativeAIinsustainablewithAI,”AccessedMay2023;CapgeminiResearchhomebuildingandarchitecture.”AccessedOctober2023.Institute,“HarnessingthevalueofgenerativeAI:Topuse59.CapgeminiInventandCDP,“Fromstrolltosprint:aracecasesacrossindustries,”June2023.againsttimeforcorporatedecarbonization,”July2023.48.CapgeminiResearchInstitute,“HarnessingthevalueofGenerativeAI:Topusecasesacrossindustries,”54.BritishEcologicalSociety,“AdeepgenerativeArtificial60.CapgeminiResearchInstitute,“Rethink:WhysustainableJune2023.Intelligencesystemtopredictspeciescoexistenceproductdesignistheneedofthehour,”September2022.patterns,”February2022;CapgeminiResearchInstitute,49.CapgeminiResearchInstitute,“Harnessingthevalue“Preservingthefabricoflife:whybiodiversitylossisas61.HarvardBusinessReview,“HowgreenwashingaffectstheofGenerativeAI:Topusecasesacrossindustries,”Juneurgentasclimatechange,”September2023.bottomline,”July2022.AccessedOctober2023.2023.55.ByMyEyescorporatewebsite.AccessedOctober2023.50.Xenonstack,“GenerativeAIinsupplychainoptimization,”August2023.CapgeminiResearchInstitute202371AWorldinBalance2023:HeightenedsustainabilityawarenessyetlaggingactionsCOMMITSustainabilitystrategyWehelpyouconsciouslyacceleratesustainabilitybydefiningactionablestrategies,andgovernancedevelopingmeasurablecommitments,creatingcomprehensivetransformationCapgeminiroadmaps,choosingsmartinvestments,identifyingnewbusinessmodels,andcanhelpyouSustainableproductsenactingculturechangetodelivertangiblevaluethroughproactivegovernanceconsciouslyforallstakeholdersandtheplanetatlarge.acceleratesustainabilityWecreate,engineer,andredesignyourproductsbyholisticallyconsideringtheplanetaryboundaries,theproductlifecycle,currentandpendingregulations,costWehavetheend-to-endcapabilitiestotrulyfutureproofconstraints,andcorporatevaluestodelightyourcustomersandunlockcompetitiveyourbusiness.Wearestrategicexperts,datamasters,digitaladvantagethroughpatents,greenenergy,productdigitalpassports,circularity,innovators,andengineers.OurBusinesstoPlanetapproachandclimatetech.turnsyoursustainabilitychallengesintoacatalystforinnovationandadriverofvalue.ByembeddingtheneedsofWedrivetransparencyandresiliencywhileunlockinginnovationacrossyourentiretheplanetintohowwethinkandwhatwedoateverystage,wehelpyoudeliveronyourtargetstodaywhilecreatingaSustainableoperations,valuechainbyleveragingtechnologiesanddatatotackleissuesincludingbettertomorrow.ACTmanufacturing,andresponsibleprocurement,traceability,biodiversity,resourceefficiency,andwastesupplychainresultinginincreasedcustomersatisfactionandloyalty,highermarketshare,andimprovedprofitability.SustainabletechnologyWeenableyourITdepartmenttochampionsustainabilitythroughbothGreenITandITforGreeninitiativesthatreducethedigitalandtechnologicalimpact,MONITORESGmanagementembracesustainabletechnologies,improveservicesandemployeeexperiences,ANDREPORTandreportingandsparkculturechangebyengagingITandemployeesalike,allwhilemeasuringyourprogressanditsimpact.Wegobeyondcarbonandmandatoryreportingtohelpyoumeasureyourcommitments,monitoryourprogress,identifyquickwinsandimpactfultransformationopportunities,unlockvalue,andprovidetransparencytoconsumers,citizens,shareholders,andregulatorybodiesbysecurelyharnessingthepowerofdataacrossyourentireecosystemtocreateenvironmentalandsocialimpactwhileimprovingyourESGperformanceandbottomline.CapgeminiResearchInstitute202372AWorldinBalance2023:HeightenedsustainabilityawarenessyetlaggingactionsKeycontributorsMarie-NeigeCouriautFlorentAndrillonHeadofGlobalAccountsandEcosystemHeadofGroupClimateTech,CapgeminiVincentCharpiotandBiodiversity,Capgeminiflorent.andrillon@capgemini.comExecutiveVicePresident,HeadofGroupmarie-neige.couriaut@capgemini.comSustainabilityBusinessAccelerator,KarineVasselinCapgeminiCourtneyHolmVicePresident,HeadofGroupDiversityvincent.charpiot@capgemini.comVicePresident,SustainabilitySolutions,andInclusion,CapgeminiCapgeminiInventkarine.vasselin@capgemini.comSolSalinascourtney.holm@capgemini.comExecutiveVicePresident,HeadofMarisaSlatterSustainabilityfortheAmericas,CapgeminiJeromeBuvatDirector,CapgeminiResearchInstitutesalomon.salinas@capgemini.comHeadoftheCapgeminiResearchInstitutemarisa.slatter@capgemini.comjerome.buvat@capgemini.comJamesRobeyExecutiveVicePresident,GlobalHeadofEnvironmentalSustainability,Capgeminijames.robey@capgemini.comVaishnaveeAConsultant,CapgeminiResearchInstitutevaishnavee.a@capgemini.comCapgeminiResearchInstitute202373AWorldinBalance2023:HeightenedsustainabilityawarenessyetlaggingactionsThecontributorswouldliketoespeciallythankAmietaFormoreinformation,SinghfromtheCapgeminiResearchInstituteforherpleasecontact:contributiontotheresearch.GlobalcontactFLORENTANDRILLONAsiaPacificBelgiumThecontributorswouldalsoliketothankCyrilGarcia,florent.andrillon@capgemini.comShobhaMeera,CorinneJouanny,JuliaMüller,Jean-CYRILGARCIABARBARA-ANNEBENSTEDANNLOREDEFOSSEZBaptistePerrin,KaraPecknold,HinrichThölken,cyril.garcia@capgemini.comFrancebarbara-anne.bensted@capgemini.annlore.defossez@capgemini.comPierre-AdrienHanania,TylerWilliams,SallyCaughey,comLucieTaurines,OliverJones,EmmanuelLochon,AndréFinlandSTÉPHANELEFRANCSammarcelli,Georges-HenriBetbeze,Emmanuellestephane.lefranc@capgemini.comGermanyIndiaBischoffe-CluzelandPratibhaSharmafortheirJAANAJÄRVINENcontributionstotheresearch.jaana.jarvinen@capgemini.comJULIAMÜLLERGEETANJALIKHATRIjulia.a.mueller@capgemini.comgeetanjali.khatri@capgemini.comAbouttheCapgeminiResearchInstituteItalyNetherlandsNorthAmericaNorwayTheCapgeminiResearchInstituteisCapgemini’sin-houseMONIAFERRARITOMVANDENNIEUWENHUIJZENSOLSALINASANE-MARTEWENGthinktankonallthingsdigital.TheInstitutepublishesmonia.ferrari@capgemini.comtom.vanden.nieuwenhuijzen@capge-salomon.salinas@capgemini.comane-marte.weng@capgemini.comresearchontheimpactofdigitaltechnologiesonlargemini.comtraditionalbusinesses.TheteamdrawsontheworldwidenetworkofCapgeminiexpertsandworkscloselywithSpainSwedenUnitedKingdomacademicandtechnologypartners.TheInstitutehasdedicatedresearchcentersinIndia,Singapore,theUK,andJORGEVILLAVERDEPERHOLMBLADCOURTNEYHOLMtheUS.Itwasrecentlyrankednumberoneintheworldbyjorge.villaverde@capgemini.comper.holmblad@capgemini.comcourtney.holm@capgemini.comindependentanalystsforthequalityofitsresearch.Visitusatwww.capgemini.com/researchinstitute/CapgeminiResearchInstitute202374AWorldinBalance2023:HeightenedsustainabilityawarenessyetlaggingactionsMoreCapgeminiResearchInstitutePublicationsAworldinbalance:WhyPreservingthefabricoflife:WhyFuture-readyeducation:Low-carbonhydrogen:ApathtosustainabilityambitionisnotbiodiversitylossisasurgentasEmpoweringsecondaryschoolagreenerfuturetranslatingtoactionclimatechangestudentswithdigitalskillsDatafornetzero:WhydataisHarnessingthevalueofWhyconsumerloveConversationsforTomorrow:keytobridgingthegapbetweengenerativeAI:TopusecasesGenerativeAIClimatetechforasustainablenetzeroambitionandactionacrossindustriesplanetCapgeminiResearchInstitute202375AWorldinBalance2023:HeightenedsustainabilityawarenessyetlaggingactionsSubscribetolatestresearchfromtheCapgeminiResearchInstituteReceivecopiesofourreportsbyscanningtheQRcodeorvisitinghttps://www.capgemini.com/capgemini-research-institute-subscription/CapgeminiResearchInstitute2023AWorldinBalance2023:HeightenedsustainabilityawarenessyetlaggingactionsAboutCapgeminiCapgeminiisagloballeaderinpartneringwithcompaniestotransformandmanagetheirbusinessbyharnessingthepoweroftechnology.TheGroupisguidedeverydaybyitspurposeofunleashinghumanenergythroughtechnologyforaninclusiveandsustainablefuture.Itisaresponsibleanddiverseorganizationofnearly350,000teammembersinmorethan50countries.Withitsstrong55-yearheritageanddeepindustryexpertise,Capgeminiistrustedbyitsclientstoaddresstheentirebreadthoftheirbusinessneeds,fromstrategyanddesigntooperations,fueledbythefastevolvingandinnovativeworldofcloud,data,AI,connectivity,software,digitalengineering,andplatforms.TheGroupreportedin2022globalrevenuesof€22billion.GettheFutureYouWantwww.capgemini.comCopyright©2023Capgemini.Allrightsreserved.