New Deloitte Research Highlights Increasing Concern About Climate Change

Deloitte’s 2022 CxO Sustainability Report: The Disconnect Between Ambition and Impact, released late January 2022, reveals that global C-level business leaders (or CxOs) are increasingly concerned about climate change and see the world at a tipping point to act. Eighty-nine percent of CxOs agree there’s a climate crisis and 63% say their organizations are very concerned. Yet, they are struggling to fully embed sustainability into their core business strategies, operations, and cultures.

“The battle against climate change isn’t a choice, it’s billions of choices,” says Deloitte Global CEO Punit Renjen. “No action is insignificant, but certain activities and decisions ‘move the needle’ more than others, and those bolder actions from business leaders are needed now—while there’s still time to limit the damage. It’s time to prove we’re up to the challenge.”

According to the survey, “the impacts of climate change are weighing heavily on executives’ minds. The majority (79%) of CxOs believe the world is at a tipping point when it comes to responding to climate change. That’s up 20 percentage points from a Deloitte survey conducted eight months prior, underscoring the growing importance of acting swiftly. What’s more, 88% of CxOs are optimistic that with immediate action, the world can limit the worst impacts to the planet. That is similarly higher than 63% eight months prior.” The surge in concern, but also optimism, demonstrates that leaders are increasingly cognizant of the need to act now.

The data shows CxOs are feeling tangible pressure on a number of levels:
• Almost all respondents (97%) indicated their companies have already been negatively impacted by climate change, and about half said their operations have been impacted (e.g., disruption to business models and supply networks worldwide).
• Eighty-one percent of CxOs have been personally impacted by a climate event (e.g., extreme heat, worsening storms, wildfires) over the last 12 months.
• Additionally, stakeholder groups – including regulators, shareholders, consumers, and employees – are all adding to the pressure to act.

Companies are acting: Two-thirds of CxOs said their organizations are using more sustainable materials and increasing the efficiency of energy use; more than half have adopted energy-efficient or climate-friendly machinery, technologies, and equipment; and a majority are intentionally reducing air travel and training employees on their climate actions and impact.
The survey notes, however, that “companies 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.”

While all sustainability actions are important, Deloitte’s analysis of the report has identified five “needle-moving” actions that, especially when taken together, demonstrate a deeper understanding of the business benefits of sustainability. They are:
• Developing new, climate-friendly products or services.
• Requiring suppliers and business partners to meet specific sustainability criteria.
• Updating or relocating facilities to make them more resistant to climate impacts.
• Incorporating climate considerations into lobbying and political donations.
• Tying senior leader compensation to sustainability performance.

According to the survey, “compared to other climate actions, companies are much less likely to have already undertaken these five, and more than one-third of organizations haven’t implemented more than one of them. While concern for the environment and optimism for change both remain strong, organizations will increasingly need to consider taking more decisive action to limit the worst impacts of climate change.”

For more, see New Deloitte research highlights increasing business concern about climate change; reveals disconnect between ambition and impact | Deloitte global.