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Predictions for FY 2025

With the financial year in Australia just ended, I’ve been thinking about where business environmental sustainability may go over the next 12 months. These comments are based on various conversations with a handful of businesses and business advisors across three Asia-Pacific countries, and my broader interest in some of the technologies that enable sustainability.

But first – all businesses are environmentally unsustainable to some degree – creating waste that doesn’t biodegrade and isn’t recycled, and using resources that are limited. So we can’t really talk about businesses becoming more sustainable – its better to talk about them becoming less environmentally unsustainable.

What drives a business to seek to become less unsustainable is regulation, opportunism, or a view of the company’s market that sees this as important.
Globally the approach varies widely, but broadly over the next 12 months I see regulation as continuing its trend of getting stronger, particularly around climate risk disclosure and reporting.

Opportunism around sustainability is linked to government incentives – and to technical developments that make formerly cost-prohibitive technology now cost-effective. As debt levels are high in many countries, but with little apparent political appetite to address this, I see no real change in incentives.

But technology in some sectors is changing quickly. Over the last 15 years the advent of LED lighting has contributed to a halving of lighting energy use in almost all buildings around the world. I recall in 2008 doing testing and a trial of LED lights for commercial buildings, with government funding, to showcase the technology. This was just as the first LED tubes as fluorescent light replacements were coming out. Bit by bit the technology improved and prices dropped. Such that, a little over a decade ago it really began to take off – everywhere.

I see the same excitement now around EVs. Underlying this is plummeting battery costs. So I’m going to label the next 12 months as the year of the chemical battery, and see it as being where LED lighting was 12 years ago. Momentum is now accelerating for the much wider uptake of batteries, particularly in transport, but also to support intermittent renewable power generation. It is unstoppable. With both short-term benefits, and long term consequences (probably a big waste challenge).

Finally, where are business perceptions of market drivers for sustainability heading over the next 12 months? Cost of living pressures are making consumers more price conscious, and sustainability can be viewed as a luxury. So outside of the impacts of regulation and technological advancements, businesses prioritisation of environmental sustainability will align with the wider economic trend.

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