Trends to watch in 2022

2022 is set to be a bit of a rollercoaster as we galvanise the promises made at COP26, navigate long term hybrid working and continue to deal with COVID-19.

With so much going on it’s impossible to put any kind of ranking system in place for what might be the most important developments of 2022 so the below is a list in no-particular-order of what is set to be big in the next 12 months.

Biodiversity Offsetting

Biodiversity offsetting is increasingly being developed as a way to compensate for the unavoidable damage caused to wildlife from new development (whether buildings, agriculture or any other man-made interference). Effectively this means creating new areas of habitat to replace areas lost to development and be one way to start addressing the continual decline in our wildlife.

This is a new, growing and very controversial area. A major concern is whether or not it is possible to provide offsets for individual species or whether such offsetting will end up being too general. Another concern – similar to carbon offsetting – is whether biodiversity offsetting will become permission to continue business as usual, negating the impetus to make meaningful change to current damaging systems.

Climate adaptation on school curriculums

With climate change becoming a tangible part of everyday life and society having to begin the process of serious adaptation, changes to national education curriculums are inevitable. The Worldwide Fund for Nature already has an entire hub dedicated to school resources. In the run up to COP26, UK Education Secretary Nadhim Zahawi said changes to the primary curriculum will see a focus on climate change science and sustainability studies, states in the US have started adding it to required lesson planning, as has New Zealand along with a handful of other countries.

Eco-anxiety among teens is also becoming recognised as a public mental health issue with a Wall Street Journal report finding that 57% of teens they surveyed were concerned about the effects of global warming. Psychiatrists are having to deal with younger and younger patients when it comes to climate related distress, and adapt their working methods accordingly.

Long term hybrid working

No surprises here but as workers increasingly embraced splitting their working hours between home and the office – and the current rise of the Omicrom variant – hybrid working is here to stay. The biggest questions will be – for how long? What does that mean for the owners and leaseholders of prime office space? How will careers develop as workers interact more and more through a screen.

And more unexpected but deep-seated questions such as how will this affect city populations and culture, with people no longer tied to a specific working location? Or what will happen to long term birth rates?? Almost 1/3 of relationships begin at work so will this have implications for population decline OR will other ways to meet potential partners pick up the slack? There are some fascinating and impossible to predict long term societal changes underway – perhaps the only clear conclusion we can draw at this stage is that Monday to Friday commuting to the same centralised workspace has suddenly become a thing of the past.

tighter regulation

Again, another non-shocker but this is one that is really starting to have teeth. The UK government has instigated the Green Claims Code to flush out greenwashing whilst mandatory climate related disclosures will become legally required for larger companies in the UK within 4 years (with some form of reporting for SMEs sure to follow). Europe’s “Fit for 55” initiatives aim to make the continent carbon neutral by 2050 and to reduce carbon emissions by 55% by 2030.

All of this means much more detailed legislation and compliance requirements for organisations of all sizes when it comes to the environmental impact of their operations.

insurers and accountants leading the charge in esg

With tighter regulation comes tighter reporting and here’s where accountants will quickly find themselves at the front line of business’ environmental responsibility. Organisations will have to divulge their carbon impacts alongside their P&Ls as part of mandatory reporting, and failure to comply with given standards will incur financial and legal penalties so accountants (both in house and third party) will have to ensure that their impact reporting is truthful – and raise the alarm where they see that a company is non-compliant.

The physical impacts of climate change and extreme weather will become increasingly prominent as part of insurance agreements and potential investment opportunities. Insurers will need to see what risk extreme weather might pose to a business and tailor their policies accordingly, whist potential investors will be looking to see how companies are working to mitigate those risks before considering whether to make a financial commitment.

Blockchain and supply chain transparency

Whilst still tightly bound in most peoples’ minds to cryptocurrencies, blockchain technology is making itself felt in the world of sustainability. As a permanent, tamper-proof public ledger, blockchain has the power to bring radical transparency to all points of the supply chain - from increased security and visibility to tracking all the variables related to ethical sourcing.

Information is fully traceable and cannot be amended so details can be recorded against who and where materials and goods come from, where they go as they travel through the supply chain and who had access to them.

SUstainable building and green spaces

As cities expand, architects and town planners are having to become ever more creative in how to incorporate green areas into a fundamentally unnatural space. More trees along streets, more green courtyards, and urban nature on rooftops, facades and any space regardless of how small will transform the cityscape. The pandemic has highlighted the need- and difficulty- for urbanites to access green space. There is also increasing research to show that cleverly planned green cities can help mitigate climate change. The Swedish town of Skelleftea is working on structural mass timber projects that replace traditional carbon heavy building materials such as concrete and steel with sustainably sourced timber that has a fraction of the environmental impact. Going one step further, the Hot Heart project in Helsinki is a long-term experiment to use seawater heat pumps to convert primarily carbon-free electrical energy into heat. Capitalising on Helsinki’s coastal location, the project designers have calculated that Hot Heart will cover the full heating demand of the city of Helsinki without any carbon emissions.

ownership of personal data

Entrepreneur and singer will.i.am (admittedly an unexpected reference for ESGmark®) calls it “idatity” because data and identity have become inextricably intertwined. Increasingly, data savvy internet users are questioning how information freely given for a ‘free’ service is used as the raw material to produce billion-dollar revenues for a handful of private monopolies. Yet we, as the providers of that ‘raw material’ see no financial benefit from what we are providing. The discussions as to how to remedy this (or whether it needs to be remedied at all…) are so varied it is impossible to follow, but there are 3 main threads to keep an eye on:

data should be treated like property and people should be fairly compensated for it using some kind of centralised, personalised ‘data wallet’.
subscription models where consumers pay for a service without the need to divulge anything more than basic details.
already on the rise in the form of European GDPR or the US’ bipartisan talks on splitting some of the larger companies into smaller subsidiaries, is government level regulation as to what to companies do with all this data now that there are such vast troves of it available, which hopes to find a compromise between keeping the services free whilst limiting data collection and storage to the absolute necessities.

climate justice

Tuvalu’s Foreign Minister Simon Kofe addresses COP26 knee deep in sea water to highlight how his low-lying Pacific Island nation is on the frontline of climate change.

COP26 really brought this to the fore.

Climate justice recognises the climate crisis as a fourfold problem with environmental, social, political and legal ramifications. Most importantly it acknowledges that different communities feel the effects of the climate crisis differently, and that the responsibility for the crisis rests primarily with a handful of recognised countries and companies.

Between 1850 and 2011, the US and EU countries were responsible for roughly 79% of climate changing emissions. While the UK is no longer one of the biggest emitters, it was one of the worst emitters over the 19th and 20th centuries. The global north continues to export a lot of our emissions by moving manufacturing abroad and importing goods.

The leading demand for climate justice is for historical emitters to account for their emissions since they started burning fossil fuels – not just their current levels. From that calculation, these countries are morally required to provide financial and technical support to the Global South to adapt and mitigate the effects of climate breakdown. There is also the more nebulous but no less real issue of intergenerational climate responsibility and how we account for the impact climate emissions today will have on future generations.

infrastructure

Ecologically responsible infrastructure is becoming a pressing requirement as consumers push for more environmentally friendly choices - but the fabric of our current systems doesn’t support the end solutions. The most obvious example is the chronic lack of charging ports for electronic vehicles (EVs) where the end product is available but not the means to make it practical. Similarly consumers are keen to embrace fully recyclable food packaging but there is a dearth of facilities able to recycle all the packaging that could be re-used – and a burgeoning but still vanishingly small number of zero waste refill stores.

Expect to see more eco-infrastructure projects as EV charging ports become requirements in newly built homes and car parks, and private sector solutions such as zero waste groceries and peer to peer clothes rental platforms really take off.