Financial Services Advisory

Sustainability: The road to regulation

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Over the last number of years, the profile of sustainability has grown considerably, but this decade marked a step change.

For those on the periphery of the topic, it can at times be overwhelming to keep up with the policy announcements, voluntary initiatives, regulatory implications and stakeholder demands. Here we discuss the background and relationships between some of the key elements and consider what will be coming next.

In the past 50 years the world has experienced unprecedented growth, together with an unprecedented deterioration of natural resources. The world is using resources faster than they can be replenished – activity that is unsustainable. 29 July 2021 marked Earth Overshoot Day defined as ‘the date when humanity’s demand for ecological resources and services in a given year exceeds what Earth can regenerate in that year’. The consequences of this behaviour are widespread, long-term and represent a threat to the ‘business as usual’ model. This require a systems wide change to address the issues, and regulation will be a key driver.