Sustainability Policies Soared 4x in the Last Decade – Yet Just 14% of Earnings Calls Feature Initiatives
Our data shows the vast extent to which climate-related regulations are increasing and evolving, posing new difficulties for supply chain when it comes to compliance and progress. We get into the challenges when the goalposts keep moving and how leaders like Volkswagen, Porsche, and Audi are using tech to develop reporting and decision-making mechanisms.
The Data
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Our analysis found that climate-related government policies and laws increased 4x between 2014 and 2024 globally.
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Despite this, our data shows that sustainability initiatives came up in just 14% of earnings calls between February 2023 and April 2024.
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Digital leaders are ahead on meeting sustainability targets (28% ahead of where they should be) vs the rest of our data set (-18%).
The Evolving Nature of Sustainability
In 2015, nearly every country signed the Paris agreement. In 2020, mentions of the word “sustainability” in annual reports, quarterly reports, earnings calls, and investor presentations reached a record high. And in 2022, Google searches and social media mentions of the word peaked.
And as new challenges emerge, like the huge and increasing amount of electricity required to power the AI revolution, our analysis shows sustainability remains a priority on a global and governmental level, with a 4x increase in climate-related policies over the last decade. The carbon tax in California and the Environment Act and Biodiversity Gain Regulations in the UK are just some examples of how this looks in reality.
Despite this, more than 200 companies had their net zero commitments “removed” by the Science-Based Targets initiative in March. This is because they missed the deadline to set targets or have decided not to use SBTi’s standard. Our data also shows that in more recent months, sustainability initiatives aren’t making it into boardroom discussions, either – only 14% of transcripts show a mention of it between February 2023 and April 2024.
Why? Part of the problem involves practical questions relating to carbon accounting and measurement. In addition, as laws and policies increase and continuously evolve, how can leaders keep up? What is “sustainability” when regulations and goalposts keep moving?
The use of digital tools can help hugely, and Zero100 data and analysis prove it. Digital leaders – those most aggressively hiring for digital skills – come out ahead on SBTi progress (ahead of their target by 28%) as compared to the rest of our data set, who are -18% behind.
Volkswagen, Porsche, and Audi Drive Ahead with AI
We believe the first step to addressing the challenges we mention above, as well as regulation compliance, is clean, verified, and formatted data on the n-tier supply chain. This starts with developing reporting and decision-making mechanisms.
Volkswagen, Porsche, and Audi show what this looks like in practice. Together, they use Prewave, a monitoring system capable of identifying and analyzing supplier-related news from media and social networks in over 50 languages in 150 countries. AI simplifies the complex analysis of data, allowing them to address partners directly and request improvements in sustainability.
Volkswagen has set its own sustainability criteria for suppliers, but it highlights the bigger picture of how AI might be used to more accurately measure, report on, and make decisions in relation to emissions.
The Takeaway
As sustainability policies increase and regulation keeps evolving, addressing Scope 3 emissions relies on having the ability to accurately report and measure carbon output and then make decisions based on this priority. Doing so required gathering, cleaning, and simplifying the necessary data so it can accurately inform decision-making.
We recommend making use of the explosion of technology to achieve this, first considering the data you already have and then need, your capabilities in-house, partnerships (like we mention in the example above), and taking inspiration from real-life use cases and learnings (many of which you can find in our AI Hub).
To see a different data cut or to dig deeper into this topic, reach out to our Head of Research Analytics, Cody Stack, at Cody.Stack@zero100.com.
Methodology
Zero100’s proprietary data and analytics are a combined effort between our data scientists and research analysts. We provide data-first insights matched with our own research-backed points of view and bring this analysis to life via real-world case examples being led by supply chain practitioners today.
For this study, we analyzed external, publicly available data from the Grantham Research Institute as well as 2023 earnings calls from 150 companies, pulling relevant insights and categorizing keywords, phrases, and sentiments.