2024 is the year for climate action
It’s almost 2024, which means 2030 – a notable milestone for the world’s climate goals – is fast approaching. To meet climate goals and mitigate the impact of climate change, organizations need to make 2024 a year of action. It’s time to move beyond just collecting data — we need to use that data to execute and track emissions reduction strategies. Here’s a look ahead at Optera’s predictions for the corporate emissions landscape in the coming year.
Upcoming regulations will rapidly accelerate emissions reporting
The majority of companies are unprepared for impending emissions reporting requirements. While companies operating in Europe have been granted a two-year delay under the Corporate Sustainability Reporting Directive (CSRD), which will now take effect in 2026, more expansive enforcement is still coming in the next few years. California’s two climate reporting laws begin to take effect in 2025.
But even businesses not directly covered by these laws must begin measuring their emissions. The large companies subject to the requirements will need emissions data from their partners and suppliers too. As enforcement broadens, Scope 3 regulations will lead to the global adoption of emissions reporting and management for businesses of all sizes due to these interconnected supply chains. So, if they’re doing business with any large corporations, organizations can’t delay developing comprehensive carbon management and reporting processes.
— Ty Colman, CRO and Co-Founder
Traceability will trump black-box algorithms
AI has the potential to help companies analyze the massive datasets created by complex enterprise supplier ecosystems, but the outputs won’t meet regulatory scrutiny if the underlying algorithms are obscured. Climate tech must build transparent, traceable algorithms to enable users to defend their numbers to regulators and decision-makers.
— Alekhya Reddy, VP Product
Sustainability will become a business imperative – bringing in more executives
Aligning a company’s long-term strategy with the low carbon economy will become more critical in 2024 than ever before. Regulators, consumers, and investors not only understand the physical and transition risk and opportunity posed by climate change, they want businesses to prove they are making measurable progress. Markets are using emissions data to make better business decisions and with new regulations on the horizon this trend will amplify in 2024.
As a result, sustainability roles will transcend traditional titles and become part of every executive’s mandate. Climate decisions are becoming central to daily operations, making sustainability top of mind for every business unit. The model of siloed sustainability departments will transition to a more integrated approach, and play a crucial role in business planning.
— Tim Weiss, CEO and Co-Founder
Infrastructure will remain a challenge
In the United States, incentives created in the Inflation Reduction Act (IRA) will start to really accelerate the transition to the green economy in 2024. Much of the funding is aimed at scaling proven climate solutions like solar, wind and storage. We will witness significant effects of this legislation in 2024.
However, infrastructure will remain the most significant obstacle impeding the mass adoption of renewables across the U.S. We’ve made tremendous progress in creating power from renewable sources, but the problem remains: How do we transmit it? Building the infrastructure to deliver power is paramount, and policymakers must act quickly. The Inflation Reduction Act provides some capital and incentives to help here, but not nearly enough to solve this problem.
— Andy Cummings, Director of Client Services
Looking ahead
2024 is a pivotal moment for meaningful climate action, and no matter where your organization is starting, Optera can help you analyze your emissions and build effective decarbonization strategies. We wish you a very rejuvenating end of 2023 – so we can roll up our sleeves and drive a meaningful impact together in the new year.
