In an era defined by uncertainty, complexity, and rapid transformation, businesses are facing escalating pressures from all directions. From shifting regulatory landscapes and supply chain volatility to emerging social movements and rapid technological breakthroughs, the business environment is becoming increasingly difficult to navigate. For sustainability and ESG leaders, the challenge isn’t just responding to today’s risks and pressures, it is also preparing for the potential disruptions and opportunities that lie ahead.

Often, ESG and sustainability strategies are built in response to current compliance obligations or the loudest stakeholder expectations, with limited consideration of what is coming next. So, although regulations and stakeholder expectations are important, only focusing on these factors might leave organisations exposed to blind spots. Whether it’s missing out on sustainable innovation, technological changes such as advancing artificial intelligence (AI), or being caught unprepared by evolving consumer preferences, the cost of being reactive can be significant. As the external context evolves, businesses need to ensure their ESG and sustainability strategies are not only grounded in today’s reality but are also equipped to remain relevant, resilient, and forward-looking.

This is where horizon scanning becomes essential. For businesses operating across multiple regions, it can also help track geographically specific developments, ensuring they stay ahead of local regulatory, political or environmental shifts. Just as importantly, it enables companies to focus on the trends most relevant to their industry, ensuring that insights are not only comprehensive but also actionable within the specific context of their sector. A structured approach to horizon scanning provides the foresight needed to adapt and evolve in a strategic and timely way.

One approach to undertaking a horizon scan is using the PESTEL framework, examining Political, Economic, Social, Technological, Environmental and Legal trends. This structure enables organisations to build a comprehensive understanding of external dynamics, tailored to their sector and strategic priorities.

Key emerging themes that may be explored through the PESTEL lens include:

• Political: Shifts in governments and powers, subsidies, or international commitments that alter the regulatory playing field.
• Economic: Macroeconomic pressures such as inflation, rising energy costs, or green finance trends that reshape business viability.
• Social: Changes around wellbeing, equity and inclusion, social impact and social mobility, impacted communities and human rights.
• Technological: Innovations in AI, digital sustainability and reporting, carbon accounting and circular economy solutions that may lead to shifts in business processes and operations.
• Environmental: The rising materiality of climate and nature-related risks and opportunities, from water scarcity to biodiversity loss.
• Legal: Understanding the changes in ESG legislation, such as the CSRD or climate litigation risks that necessitate robust governance and transparency.

Incorporating these insights into your sustainability approach can support several critical functions. It can help organisations enhance risk mitigation and identify opportunities; it is also particularly valuable when undergoing other strategic sustainability activities such as a double materiality assessment or strategy development. Horizon scanning will also highlight any emerging stakeholder priorities. Organisations can use horizon scanning to inform scenario planning, shape stakeholder engagement approaches, and future-proof targets and KPIs. Most importantly, it shifts businesses from being reactive to becoming proactive.

Horizon scanning is an essential discipline for any business focused on resilience, competitiveness, and long-term value. It empowers leadership teams to make informed, timely decisions that align with evolving sustainability trends and regulatory landscapes. This forward-looking approach is particularly valuable in today’s context of increasing regulatory scrutiny, fast-moving stakeholder expectations, and the need for demonstrable progress on sustainability. These developments underscore the need for businesses to not only understand their current ESG and sustainability position, but also the need to understand what is coming in their direction so that they can adapt as necessary. Given the pace of external change, horizon scanning should be carried out regularly, as frequently as quarterly or biannually, to ensure ESG and sustainability strategies remain relevant and responsive. Additionally, these exercises can also generate practical outputs, such as informing a legal risk register or similar tools that support wider governance and risk management efforts.

At Simply Sustainable, we support organisations in embedding horizon scanning into their ESG and sustainability approach through bespoke PESTEL analyses and forward-looking, sector-specific insights. Whether it’s integrated into the development of an ESG or sustainability strategy, used to inform a double materiality assessment, or delivered as a stand-alone diagnostic to guide wider strategic planning, our approach helps to turn insight into proactive decision-making, reducing the need for reactive responses.

If you’re looking to develop a future-ready ESG and sustainability strategy, or enhance the relevance of an existing one, strategic foresight is a powerful tool for clarity and long-term impact.

To explore how horizon scanning can support your organisation, contact our Head of ESG and Sustainability, Joaska Mischke, here.