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Future of the Sustainable Organisation: Top 5 ESG Trends in 2024

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The UN’s global stocktake synthesis report underscores the need for significant efforts to meet the ambitious goals of the Paris Agreement to keep the global warming limit to 1.5ºC, compared to pre-industrial levels. Achieving this requires collective action from governments, organisations, and individuals.

While regulators focus on mandates, organisations today are being influenced more by individual responsibility for positive impact. Customers and employees are leading ESG actions – another fast-emerging voice driving ESG initiatives are value chain partners looking to build sustainable supply chains.

Ecosystm Predicst: Top 5 ESG Trends in 2024. Most Vocal Advocates of ESG.

Ecosystm research reveals that only 27% of organisations worldwide currently view ESG as a strategic imperative, yet we anticipate rapid change in the landscape.

Click below to find out what Ecosystm analysts Gerald Mackenzie, Kaushik Ghatak, Peter Carr and Sash Mukherjee consider the top 5 ESG trends that will shape organisations’ sustainability roadmaps in 2024.

Click here to download ‘Ecosystm Predicts: Top 5 ESG Trends in 2024’ as a PDF.

#1 Organisations Will Evolve ESG Strategies from Compliance to Customer & Brand Value

Many of the organisations that we talk to have framed their ESG strategy and roadmaps primarily in relation to compliance and regulatory standards that they need to meet, e.g. in relation to emissions reporting and reduction, or in verifying that their supply chains are free from Modern Slavery.

However, organisations that are more mature in their journeys have realised that ESG is quickly becoming a strategic differentiator and compliance is only the start of their sustainability journey.

Customers, employees, and investors are increasingly selective about the brands they want to associate with and expect them to have a purpose and values that are aligned with their own. 

Ecosystm Predicst: Top 5 ESG Trends in 2024. Organisations Will Evolve ESG Strategies from Compliance to Customer & Brand Value.

#2 Sustainability Will Remain a Stepping-Stone to Full ESG

Heading into 2024, the corporate continues to navigate the nuances between Sustainability and Environmental, Social, and Governance (ESG) initiatives. Sustainability, focused on environmental stewardship, is a common starting point for corporate responsibility, offering measurable goals for a solid foundation.

Yet, the transition to comprehensive ESG, which includes broader social and governance issues alongside environmental concerns, demands broader scope and deeper capabilities, shifting from quantitative to qualitative measures. The trend of merging sustainability with ESG risks is blurring distinct objectives, potentially complicating reporting and compliance, and causing confusion in the market. Nevertheless, this conflation ultimately paves the way for more integrated, holistic corporate strategies.

By aligning sustainability efforts with wider ESG goals, companies will develop more comprehensive solutions that address the entire spectrum of corporate responsibility.

#3 ESG Consulting Will Grow – Till Industry Templates Take Over

At the end of 2022, LinkedIn buzzed with announcements of Chief Sustainability Officer appointments. However, the Global Sustainability Barometer Study reveals that only around one-third of global organisations have a dedicated sustainability lead. What changed?

Organisations have recognised that ESG is intricate, requiring a comprehensive focus and a capable team, not just a sustainability leader.

Each organisation’s path to sustainability is unique, shaped by factors like size, industry, location, stakeholders, culture, and values. Successfully integrating ESG requires a nuanced understanding of an organisation’s barriers, opportunities, and risks, making it challenging to navigate the sustainability journey alone. This is complicated by the absence of clear government/industry mandates and guidelines that frame best practices.

Ecosystm Predicst: Top 5 ESG Trends in 2024. ESG Consulting Will Grow – Till Industry Templates Take Over.

#4 Sustainability Tech Will Finally Gain Traction

Many organisations initiate sustainability journeys with promises and general  strategies. While the role of technology in accelerating goals is recognised, alignment has been lacking. In 2024 sustainability tech will gain traction.

Environmental Tech. Improved sensors and analytics will enhance monitoring of air and water quality, carbon footprint, biodiversity, and climate patterns.

Carbon-Neutral Transportation. Advancements in electric and hydrogen vehicles, batteries, and clean mobility infrastructure will persist.

Circular Economy. Innovations like reverse logistics and product lifecycle tracking will help reduce waste and extend product/material life.

Smart Grids and Renewable Energy. Smart grid tech and new solutions for renewable energy integration will improve energy distribution.

Ecosystm Predicst: Top 5 ESG Trends in 2024. Sustainability Tech Will Finally Gain Traction

#5 Cleantech Innovation Will See Increased Funding

Cleantech is the innovation that is driving our adaptation to climate change. We expect that investments into, and the pace of innovation and adoption of Cleantech will accelerate into 2024.

As companies commit to their net-zero targets, the need to operationalise the technologies required to fuel this transition becomes all the more urgent.  BloombergNEF reported that for Europe alone, nearly USD 220 billion was invested in Cleantech in 2022.

But to meet net-zero ambitions, annual investments in Cleantech will need to triple over the rest of this decade and quadruple in the next.

Ecosystm Predicst: Top 5 ESG Trends in 2024. Cleantech Innovation Will See Increased Funding.
Ecosystm Predicts 2024
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Ecosystm Predicts: Tech Market Dynamics 2024

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2023 has been an eventful year. In May, the WHO announced that the pandemic was no longer a global public health emergency. However, other influencers in 2023 will continue to impact the market, well into 2024 and beyond.

Global Conflicts. The Russian invasion of Ukraine persisted; the Israeli-Palestinian conflict escalated into war; African nations continued to see armed conflicts and political crises; there has been significant population displacement.

Banking Crisis. American regional banks collapsed – Silicon Valley Bank and First Republic Bank collapses ranking as the third and second-largest banking collapses in US history; Credit Suisse was acquired by UBS in Switzerland.

Climate Emergency. The UN’s synthesis report found that there’s still a chance to limit global temperature increases by 1.5°C; Loss and Damage conversations continued without a significant impact.

Power of AI. The interest in generative AI models heated up; tech vendors incorporated foundational models in their enterprise offerings – Microsoft Copilot was launched; awareness of AI risks strengthened calls for Ethical/Responsible AI.

Click below to find out what Ecosystm analysts Achim Granzen, Darian Bird, Peter Carr, Sash Mukherjee and Tim Sheedy consider the top 5 tech market forces that will impact organisations in 2024.

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#1 State-sponsored Attacks Will Alter the Nature Of Security Threats

It is becoming clearer that the post-Cold-War era is over, and we are transitioning to a multi-polar world. In this new age, malevolent governments will become increasingly emboldened to carry out cyber and physical attacks without the concern of sanction.

Unlike most malicious actors driven by profit today, state adversaries will be motivated to maximise disruption.

Rather than encrypting valuable data with ransomware, wiper malware will be deployed. State-sponsored attacks against critical infrastructure, such as transportation, energy, and undersea cables will be designed to inflict irreversible damage. The recent 23andme breach is an example of how ethnically directed attacks could be designed to sow fear and distrust. Additionally, even the threat of spyware and phishing will cause some activists, journalists, and politicians to self-censor.

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#2 AI Legislation Breaches Will Occur, But Will Go Unpunished

With US President Biden’s recently published “Executive order on Safe, Secure and Trustworthy AI” and the European Union’s “AI Act” set for adoption by the European Parliament in mid-2024, codified and enforceable AI legislation is on the verge of becoming reality. However, oversight structures with powers to enforce the rules are currently not in place for either initiative and will take time to build out.

In 2024, the first instances of AI legislation violations will surface – potentially  revealed by whistleblowers or significant public AI failures – but no legal action will be taken yet.

#3 AI Will Increase Net-New Carbon Emissions

In an age focused on reducing carbon and greenhouse gas emissions, AI is contributing to the opposite. Organisations often fail to track these emissions under the broader “Scope 3” category. Researchers at the University of Massachusetts, Amherst, found that training a single AI model can emit over 283T of carbon dioxide, equal to emissions from 62.6 gasoline-powered vehicles in a year.

Organisations rely on cloud providers for carbon emission reduction (Amazon targets net-zero by 2040, and Microsoft and Google aim for 2030, with the trajectory influencing global climate change); yet transparency on AI greenhouse gas emissions is limited. Diverse routes to net-zero will determine the level of greenhouse gas emissions.

Some argue that AI can help in better mapping a path to net-zero, but there is concern about whether the damage caused in the process will outweigh the benefits.

#4 ESG Will Transform into GSE to Become the Future of GRC

Previously viewed as a standalone concept, ESG will be increasingly recognised as integral to Governance, Risk, and Compliance (GRC) practices. The ‘E’ in ESG, representing environmental concerns, is becoming synonymous with compliance due to growing environmental regulations. The ‘S’, or social aspect, is merging with risk management, addressing contemporary issues such as ethical supply chains, workplace equity, and modern slavery, which traditional GRC models often overlook. Governance continues to be a crucial component.

The key to organisational adoption and transformation will be understanding that ESG is not an isolated function but is intricately linked with existing GRC capabilities.

This will present opportunities for GRC and Risk Management providers to adapt their current solutions, already deployed within organisations, to enhance ESG effectiveness. This strategy promises mutual benefits, improving compliance and risk management while simultaneously advancing ESG initiatives.

#5 Productivity Will Dominate Workforce Conversations

The skills discussions have shifted significantly over 2023. At the start of the year, HR leaders were still dealing with the ‘productivity conundrum’ – balancing employee flexibility and productivity in a hybrid work setting. There were also concerns about skills shortage, particularly in IT, as organisations prioritised tech-driven transformation and innovation.

Now, the focus is on assessing the pros and cons (mainly ROI) of providing employees with advanced productivity tools. For example, early studies on Microsoft Copilot showed that 70% of users experienced increased productivity. Discussions, including Narayana Murthy’s remarks on 70-hour work weeks, have re-ignited conversations about employee well-being and the impact of technology in enabling employees to achieve more in less time.

Against the backdrop of skills shortages and the need for better employee experience to retain talent, organisations are increasingly adopting/upgrading their productivity tools – starting with their Sales & Marketing functions. 

Ecosystm Predicts 2024
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Bridging Gaps: AI’s Role in Financial Inclusion

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Technological advancements have paved the way for banks and financial institutions to broaden their services globally. However, despite ongoing efforts to tackle disparities in access, systemic biases persist, including those related to race, gender, income disparities, and unequal lending practices, contributing to financial inequality.

Prioritising financial inclusion is crucial for fostering global economic growth and AI plays a significant role in achieving this objective.

AI is enhancing financial inclusion by providing financial education and minimising fraud in transactions, empowering previously underserved populations.

The Impact of Financial Inclusion

Impact on Individuals
It is transformative for poverty reduction, empowering marginalised populations to save and invest, providing a tangible path out of poverty. Additionally, access to insurance and savings accounts enhances personal resilience, helping individuals navigate financial risks associated with unforeseen events like health crises, natural disasters, and economic downturns. Financial inclusion is the first step towards social equity.

Impact on the Economy
It fuels economic growth by supporting small businesses and entrepreneurs, fostering innovation, job creation, and overall development. Beyond individual empowerment, it plays a crucial role in addressing global challenges, particularly by facilitating climate action in communities most affected by climate change.

Many market participants recognise the profound impact that financial inclusion can have on the economy and are collectively taking action.

Here are some examples of how they are leveraging AI to promote financial inclusion.

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AI Takes Centre Stage at SFF 2023: What Can We Expect?

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Four years ago, at the Singapore FinTech Festival (SFF) 2019, the Monetary Authority of Singapore (MAS) announced the Veritas framework and consortium for responsible use of AI. Veritas was a trailblazing initiative to set common standards for responsible AI adoption in financial services.

Fast-forward to 2023, and SFF 2023 is themed around the applications of AI in financial services – or in short: “AI for good. AI for good?”. So, what can we expect from this year’s event?

Here is what I am looking forward to at the event:

Read on to find out why these sessions promise to be interesting!

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Microsoft Copilot’s Real Battle: Going Beyond Business Proposals and Use Cases

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Earlier in the year, Microsoft unveiled its vision for Copilot, a digital companion that aims to provide a unified user experience across Bing, Edge, Microsoft 365, and Windows. This vision includes a consistent user experience. The rollout began with Windows in September and expanded to Microsoft 365 Copilot for enterprise customers this month.

Many organisations across Asia Pacific will soon face the question on whether to invest in Microsoft 365 Copilot – despite its current limitations in supporting all regional languages. Copilot is currently supported in English (US, GB, AU, CA, IN), Japanese, and Chinese Simplified. Microsoft plans to support more languages such as Arabic, Chinese Traditional, Korean and Thai over the first half of 2024. There are still several languages used across Asia Pacific that will not be supported until at least the second half of 2024 or later.

Access to Microsoft 365 Copilot comes with certain prerequisites. Organisations need to have either a Microsoft 365 E3 or E5 license and an Azure Active Directory account. F3 licenses do not currently have access to 365 Copilot. For E3 license holders the cost per user for adding Copilot would nearly double – so it is a significant extra spend and will need to deliver measurable and tangible benefits and a strong business case. It is doubtful whether most organisations will be able to justify this extra spend.

However, Copilot has the potential to significantly enhance the productivity of knowledge workers, saving them many hours each week, with hundreds of use cases already emerging for different industries and user profiles. Microsoft is offering a plethora of information on how to best adopt, deploy, and use Copilot. The key focus when building a business case should revolve around how knowledge workers will use this extra time.

Maximising Copilot Integration: Steps to Drive Adoption and Enhance Productivity

Identifying use cases, building the business proposal, and securing funding for Copilot is only half the battle. Driving the change and ensuring all relevant employees use the new processes will be significantly harder. Consider how employees currently use their productivity tools compared to 15 years ago, with many still relying on the same features and capabilities in their Office suites as they did in earlier versions. In cases where new features were embraced, it typically occurred because knowledge workers didn’t have to make any additional efforts to incorporate them, such as the auto-type ahead functions in email or the seamless integration of Teams calls.

The ability of your organisation to seamlessly integrate Copilot into daily workflows, optimising productivity and efficiency while harnessing AI-generated data and insights for decision-making will be of paramount importance. It will be equally important to be watchful to mitigate potential risks associated with an over-reliance on AI without sufficient oversight.

Implementing Copilot will require some essential steps:

  • Training and onboarding. Provide comprehensive training to employees on how to use Copilot’s features within Microsoft 365 applications.
  • Integration into daily tasks. Encourage employees to use Copilot for drafting emails, documents, and generating meeting notes to familiarise them with its capabilities.
  • Customisation. Tailor Copilot’s settings and suggestions to align with company-specific needs and workflows.
  • Automation. Create bots, templates, integrations, and other automation functions for multiple use cases. For example, when users first log onto their PC, they could get a summary of missed emails, chats – without the need to request it.
  • Feedback loop. Implement a feedback mechanism to monitor how Copilot is used and to make adjustments based on user experiences.
  • Evaluating effectiveness. Gauge how Copilot’s features are enhancing productivity regularly and adjust usage strategies accordingly. Focus on the increased productivity – what knowledge workers now achieve with the time made available by Copilot.

Changing the behaviours of knowledge workers can be challenging – particularly for basic processes that they have been using for years or even decades. Knowledge of use cases and opportunities for Copilot will not just filter across the organisation. Implementing formal training and educational programs and backing them up with refresher courses is important to ensure compliance and productivity gains.

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Starting Strong: Successful AI Projects Start with a Proof of Concept

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The challenge of AI is that it is hard to build a business case when the outcomes are inherently uncertain. Unlike a traditional process improvement procedure, there are few guarantees that AI will solve the problem it is meant to solve. Organisations that have been experimenting with AI for some time are aware of this, and have begun to formalise their Proof of Concept (PoC) process to make it easily repeatable by anyone in the organisation who has a use case for AI. PoCs can validate assumptions, demonstrate the feasibility of an idea, and rally stakeholders behind the project.

PoCs are particularly useful at a time when AI is experiencing both heightened visibility and increased scrutiny. Boards, senior management, risk, legal and cybersecurity professionals are all scrutinising AI initiatives more closely to ensure they do not put the organisation at risk of breaking laws and regulations or damaging customer or supplier relationships.

13 Steps to Building an AI PoC

Despite seeming to be lightweight and easy to implement, a good PoC is actually methodologically sound and consistent in its approach. To implement a PoC for AI initiatives, organisations need to:

  • Clearly define the problem. Businesses need to understand and clearly articulate the problem they want AI to solve. Is it about improving customer service, automating manual processes, enhancing product recommendations, or predicting machinery failure?
  • Set clear objectives. What will success look like for the PoC? Is it about demonstrating technical feasibility, showing business value, or both? Set tangible metrics to evaluate the success of the PoC.
  • Limit the scope. PoCs should be time-bound and narrow in scope. Instead of trying to tackle a broad problem, focus on a specific use case or a subset of data.
  • Choose the right data. AI is heavily dependent on data. For a PoC, select a representative dataset that’s large enough to provide meaningful results but manageable within the constraints of the PoC.
  • Build a multidisciplinary team. Involve team members from IT, data science, business units, and other relevant stakeholders. Their combined perspectives will ensure both technical and business feasibility.
  • Prioritise speed over perfection. Use available tools and platforms to expedite the development process. It’s more important to quickly test assumptions than to build a highly polished solution.
  • Document assumptions and limitations. Clearly state any assumptions made during the PoC, as well as known limitations. This helps set expectations and can guide future work.
  • Present results clearly. Once the PoC is complete, create a clear and concise report or presentation that showcases the results, methodologies, and potential implications for the business.
  • Get feedback. Allow stakeholders to provide feedback on the PoC. This includes end-users, technical teams, and business leaders. Their insights will help refine the approach and guide future iterations.
  • Plan for the next steps. What actions need to follow a successful PoC demonstration? This might involve a pilot project with a larger scope, integrating the AI solution into existing systems, or scaling the solution across the organisation.
  • Assess costs and ROI. Evaluate the costs associated with scaling the solution and compare it with the anticipated ROI. This will be crucial for securing budget and support for further expansion.
  • Continually learn and iterate. AI is an evolving field. Use the PoC as a learning experience and be prepared to continually iterate on your solutions as technologies and business needs evolve.
  • Consider ethical and social implications. Ensure that the AI initiative respects privacy, reduces bias, and upholds the ethical standards of the organisation. This is critical for building trust and ensuring long-term success.

Customising AI for Your Business

The primary purpose of a PoC is to validate an idea quickly and with minimal risk. It should provide a clear path for decision-makers to either proceed with a more comprehensive implementation or to pivot and explore alternative solutions. It is important for the legal, risk and cybersecurity teams to be aware of the outcomes and support further implementation.

AI initiatives will inevitably drive significant productivity and customer experience improvements – but not every solution will be right for the business. At Ecosystm, we have come across organisations that have employed conversational AI in their contact centres to achieve entirely distinct results – so the AI experience of peers and competitors may not be relevant. A consistent PoC process that trains business and technology teams across the organisation and encourages experimentation at every possible opportunity, would be far more useful.

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Building a Successful Fintech Business​

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Fintechs have carved out a niche both in their customer-centric approach and in crafting solutions for underserved communities without access to traditional financial services. Irrespective of their objectives, there is an immense reliance on innovation for lower-cost, personalised, and more convenient services.​

However, a staggering 75% of venture-backed fintech startups fail to scale and grow – and this applies to fintechs as well. 

Here are the 5 areas that fintechs need to focus on to succeed in a competitive market.​

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