2023 Business & Legislative Trends for Enterprises

Net zero and greenwashing

Sustainability trends will continue in 2023, and businesses and consumers will increasingly prioritize transactions with providers who share their values. Areas of focus include decarbonization, aggressive net-zero targets and a shift towards clean technologies.

However, as more companies make green pledges, they can expect increased scrutiny from investors and regulators looking for “greenwashing.” “Greenwashing” is the term used to describe when companies make misleading, unsubstantiated, or outright false claims about the sustainability of their products and environmental efforts.

Businesses must be able to provide tangible evidence that they understand the risks of greenhouse gas emissions and are taking real steps in their clean energy or pollution reduction efforts.

Exploring a circular economy

In our current economy, there are concerns about how material is extracted from the earth, processed into products and ultimately disposed of as waste. A circular economy aims to minimize or eliminate waste by trying to keep materials and goods in the loop for as long as possible.

As inflation and supply chain issues continue to limit access to raw materials, companies will seek a circular economy to ensure access to materials. In fact, selling Second Life products (products reclaimed by first-time customers) is already generating new revenue streams for some businesses. According to the World Economic Forum and the Ellen MacArthur Foundation, recycling, reusing and remanufacturing could free up $1 trillion in wasted resources by 2025.

A circular supply chain offers many other benefits for businesses, including the ability to maintain a reliable supply during inflation, reduce waste and emissions, and keep new competitors at bay. By reducing waste and emissions from primary material production, circular business practices can also support industry to reach net zero.

Metaverse to enrich the customer experience

In its key strategic trends for 2023, Gartner predicts that two out of five large companies will invest in the “metaverse” — a virtual space created by the “convergence of virtual augmented physical and digital reality.”

The Metaverse leverages a collection of technologies including Web3 (a next-generation decentralized internet based on blockchain), virtual and augmented reality, and digital twins to enrich the customer experience, enable a virtual product marketplace, and collect customer data.

B2B companies can also benefit from the trend. Imagine a manufacturer who buys new equipment parts. The current process involves searching through a physical brochure or an electronic PDF. Using the metaverse allowed users to virtually test their products at a lower cost. For example, facility owners could create a digital twin of a factory and test how new systems interact with the existing environment.

The Metaverse can also reinvent the workspace. Gartner predicts that these environments will account for 30% of enterprise investment growth by 2027.

In preparation, companies appoint chief experience officers (CXOs) to integrate the metaverse into their business strategy.

Changing legal and regulatory landscape in 2023

Businesses should also be aware of some known additions and changes to state and federal laws and regulations in 2023. Others, coming into effect in 2023, will require companies to be flexible to deal with the business fallout.

  • Transactions involving cryptocurrency or other digital assets. States are expected to begin amending their state commerce laws to incorporate the Uniform Commercial Code changes dealing with new digital technologies.
  • Personal Data Laws. Businesses that collect personal information should be prepared to comply with new consumer privacy laws coming into effect in 2023 in Connecticut, Colorado, Utah and Virginia. In addition, extensive changes to the California data protection law are coming into effect. A federal consumer privacy law has been introduced in Congress that must also be observed.
  • Investing and ESG. States that have passed or proposed legislation that prohibits state pension funds from investing in socially responsible companies. Other states, on the other hand, encourage investments in companies with ESG obligations.
  • Diversity on the board. Several states have enacted or proposed legislation that would require certain public companies to report on the diversity of their boards, have a mixed board, or report the reasons for not having a mixed board.
  • Anti-Inflation Act. Beginning in 2023, a provision of the Inflation Reduction Act will come into effect that will impose a 1% consumption tax on the repurchase of company shares by public companies.
  • Beneficial Owner Reporting. Businesses should begin preparing for the beneficial owner reporting requirements imposed by the federal Business Transparency Act. Although reporting doesn’t start until 2024 – and many large companies are eligible for an exemption – companies should still familiarize themselves with the CTA and the rules implementing the act to ensure they are tax exempt and to determine if they are tax exempt. whether any subsidiaries are required to file a report .
  • Amendments to Delaware General Corporation Law. Corporations incorporated in Delaware should monitor annual changes to the Delaware General Corporation Law. Each year, these changes give senior management the opportunity to take actions they deem beneficial. For example, the 2022 amendments provided for a possibility to limit the personal liability of board members under certain conditions and to take out and maintain D&O insurance through or through a captive insurance company. In 2023, the Delaware legislature could offer other beneficial opportunities.

Navigating 2023

A rapidly changing society has challenged prediction norms, and organizations are increasingly relying on data, artificial intelligence, and predictive analytics to understand what’s coming next and make informed decisions.

Using these insights and determining what is working for your business today and what is required to ensure it is successful tomorrow is an unprecedented challenge. But for companies that understand the latest trends, developments and services, there is ample opportunity and room for growth.

Learn more

As you navigate 2023, CT Corporation is committed to helping your organization stay compliant so you can focus on the year ahead. To learn more, contact a CT Corporation representative or call us at 855-316-8948 (toll free in the US).

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