ThinkTWENTY20

According to Deloitte’s recently released sustainability survey, 89% of C-suite executives (CxOs) agree there’s a climate crisis and almost 79% of executives surveyed by Deloitte see the world at a tipping point for responding to climate change, compared to 59% eight months ago. According to the survey report, “despite the gravity of the moment, there is a prevailing sense of optimism: 88% currently agree that with immediate action, we can limit the worst impacts of climate change.”

Between September and October 2021, Deloitte polled more than 2,000 C-suite executives across 21 countries to examine business leaders’ and companies’ concerns and actions when it comes to climate change and environmental sustainability. “We wanted to know how CxOs were transforming their businesses to meet the moment,” The report says.

Climate, indeed, weighs heavily on the minds of the world’s executives, says Punit Renjen, Deloitte’s Global CEO, in the introduction to the report. “The results of our latest survey suggest CxOs’ concerns about the planet’s future have increased significantly over the past eight months – but so has their optimism that immediate action can make a difference. They understand that the future of our planet depends on business cutting carbon emissions and ingraining more sustainable practices into their operations, and many are approaching the challenge with the gravity and urgency it deserves.”

Key insights of the report include:

• Approximately two-thirds of executives said their companies are very concerned about climate change and 79% see the world at a climate change tipping point – a number that was 59% in a similar Deloitte survey taken in early 2021. Their concern is consistent with the impact that climate change is already having.
• 97% of companies have already felt negative impacts of climate change.
• Eight in 10 CxOs said they’ve been personally affected by climate events over the past year.
• They’re feeling pressure to act from their stakeholders, yet, there is a prevailing sense of optimism.
• 88% agreed that, with immediate action, we can limit the worst impacts of climate change. That figure was 63% eight months ago. While companies are acting, they are less likely to implement actions that demonstrate they have embedded climate considerations into their cultures and have the senior leader buy-in and influence to effect meaningful transformation.
• For example, they are more likely to have “used more sustainable materials” than to have “developed new climate-friendly products or services.” Additionally, CxOs continue to struggle with the short-term costs of transitioning to a low-carbon future. The five lowest-ranked benefits of climate strategies cited by CxOs were: revenue from both longstanding and new business, asset values, cost of investment, and operating margins.
• Lessons can be learned from leaders – representing 19% of the total survey sample – who are implementing at least four of five of the following “needle-moving” actions:

1. developing new, climate-friendly products or services;
2. requiring suppliers and business partners to meet specific sustainability criteria;
3. updating or relocating facilities to make them more resistant to climate impacts;
4. incorporating climate considerations into lobbying and political donations; and
5. tying senior leader compensation to sustainability performance.

These leaders are more likely than others to see the benefits of their efforts and less likely to see cost and short-term priorities as obstacles – perhaps an indication they grasp the price of climate inaction. Our report further explores the disconnects between ambition, action, and impact as well as steps CxOs can take to start to bridge the gaps.

Grab the full report at 2022-deloitte-global-cxo-sustainability-report.pdf.