
Net zero and greenwashing
Sustainability trends will continue into 2023, and businesses and consumers will increasingly prioritize transactions with vendors who share their values. Focus areas include decarbonization, aggressive net zero targets, and a transition to clean technology.
However, as more companies make green commitments, they can expect more scrutiny from investors and regulators on the lookout for “greenwashing.” “Greenwashing” is the term used to describe when companies make misleading, unfounded, or outright false claims about the sustainability of their products and environmental efforts.
Companies must be able to provide tangible evidence that they understand the risks from greenhouse gas emissions and are taking real steps in their clean energy or pollution reduction efforts.
Exploring a circular economy
With our current economy, there is concern about how material is taken from the Earth, made into products, and finally disposed of as waste. A circular economy aims to reduce or prevent waste from occurring in the first place by trying to keep materials and goods in circulation as long as possible.
As inflation and supply chain issues continue to limit access to raw materials, companies will look to a circular economy as a way to ensure access to materials. In fact, selling second-life products (products reclaimed from first-time customers) has already created new revenue streams for some companies. According to the World Economic Forum and the Ellen MacArthur Foundation, recycling, reuse, and remanufacturing could unlock $1 trillion in wasted resources by 2025.
A circular supply chain provides companies with many other benefits, including maintaining reliable supplies in times of inflation, reducing waste and emissions, and preventing new competitors. By reducing waste and emissions from primary material production, circular business practices can also help industries achieve net zero.
Metaverse to improve customer experience
Among the top strategic trends for 2023, Gartner predicts that two out of five large companies will invest in the “metaverse” – a virtual space created by “combining virtual augmented physical and digital reality.”
The metaverse draws on a collection of technologies, including Web3 (a decentralized, next-generation internet based on blockchain), virtual and augmented reality, and digital twins to improve the customer experience, enabling a virtual product market, and customer data collection.
B2B businesses can also benefit from the trend. Consider a manufacturer that purchases new equipment parts. The current process involves browsing a physical brochure or electronic PDF. By using metaverse, users can test their products virtually at a lower cost. For example, plant owners can create a digital twin of a factory and test how new systems interact with the existing environment.
The metaverse can also reimagine the workspace. Gartner predicts that these environments will account for 30% of business investment growth through 2027.
In preparation, companies are appointing chief experience officers (CXOs) to incorporate the metaverse into their business strategy.
Changing the statutory and regulatory landscape by 2023
Business companies must also be aware of changes and changes in state and federal laws and regulations in 2023, some of which are known. Others implemented in 2023 require companies to be agile to deal with business consequences.
- Transactions involving cryptocurrency or other digital assets. States are expected to begin amending their state commerce laws to adopt changes to the Uniform Commercial Code that address emerging digital technologies.
- Personal data laws. Companies that collect personal data must be prepared to comply with new consumer privacy laws that will go into effect in 2023 in Connecticut, Colorado, Utah, and Virginia. Several changes to California’s data privacy law will also take effect. A federal consumer privacy law has been introduced in Congress that also requires vigilance.
- ESG investing. States that have passed or proposed bills prohibiting state pension funds from investing in socially responsible companies. Some states, in contrast, encourage investment in companies with ESG commitments.
- Board diversity. Many states have passed or proposed laws requiring certain public companies to report the diversity of their boards, to have a diverse board, or to report the reasons for not having a diverse board.
- Inflation Reduction Act. Beginning in 2023, a provision of the Inflation Reduction Act that imposes a 1% excise tax on corporate stock buybacks of public companies will be implemented.
- Reporting the benefit of ownership. Companies should begin preparing for the beneficial ownership reporting requirement imposed by the federal Corporate Transparency Act. Although reporting does not begin until 2024 – and many large corporations will qualify for an exemption – businesses should familiarize themselves with the CTA and the regulations implementing the Act to ensure they are not including and to determine if any subsidiaries are required to submit a report. .
- Amendments to the Delaware General Corporation law. Companies incorporated in Delaware must monitor annual changes to the Delaware General Corporation Law. Every year these changes give the opportunity to the management of the corporation to take actions that they consider useful. For example, the 2022 amendments provide an option to limit the personal liability of executive officers under certain conditions and to purchase and maintain D&O insurance through or through a captive insurance company. . In 2023, the Delaware legislature may provide additional beneficial opportunities.
Navigation to 2023
A rapidly changing society is challenging predictive behaviors, and organizations are increasingly relying on data, artificial intelligence, and predictive analytics to understand what’s coming next and inform decision-making.
Using these insights and determining what works for your company today and what is needed to ensure it thrives tomorrow, is an unprecedented challenge. But for businesses that understand the latest trends, developments, and services, there is plenty of opportunity and room for growth.
Learn more
As you navigate 2023, CT Corporation is dedicated to helping your business stay on track so you can focus on the year ahead. If you would like to learn more, contact a CT Corporation representative or call us at 855-316-8948 (toll free in the US).