Global professional services firm Deloitte announced today the release of its 2022 CxO Sustainability Report, with results of a global survey of C-suite executives examining corporate perceptions, experiences and actions on climate change. According to the report, climate awareness has ramped significantly among corporate executives, and while most are increasingly taking action to address climate change, many are not yet pursuing more meaningful initiatives.
For the report, Deloitte and market research firm KS&R surveyed more than 2,000 C-level executives in 21 countries around the world, across a broad range of industries and enterprise sizes, ranging from $500 million in revenues to over $10 billion.
The survey indicated a significant recent shift in executives’ attitudes related to climate change, both in terms of level of concern, and optimism in the ability to address the issue. 79% of survey respondents agreed that the world is at a tipping point for responding to climate change, up significantly from only 59% in a similar survey conducted only 8 months earlier. While concern has ramped, however, 88% of executives agreed that immediate action can limit the worst impacts of climate change, compared to only 63% in the prior survey.
Jennifer Steinmann, Deloitte Global Climate and Sustainability Marketplace Leader, said:
“Climate change is no longer in the distant or even near future. It’s here now and the choices we make today will determine the quality of life for generations to come. A better future depends on a profound and lasting change in attitude and behavior from governments, businesses, and individuals.
The C-level climate concerns and actions appear to be driven both by experience and by external pressures. Nearly all (97%) of executives said that their companies have already been negatively impacted by climate change, and many reported that climate-related events are increasingly disrupting business models and supply chains. Most of the respondents also said they feel pressure to act on climate from a broad range of stakeholders ranging from regulators & governments (77%), consumers & clients (75%), investors (71%) and banks or lenders (55%).
While executives are clearly more concerned about climate change, and more confident in their ability to address it, Deloitte noted that many of the actions undertaken to date are not the most impactful. Deloitte identified a series of “needle-moving actions” that would indicate that climate considerations are embedded into company culture and reflect senior leader buy-in, and notes that each of these has been adopted by fewer than half of the companies surveyed. Only 49% of executives said that their companies are developing new climate-friendly products or services, 46% are requiring suppliers and business partners to meet sustainability criteria, 44% are updating or relocating facilities to improve climate resilience, 40% are incorporating climate considerations into lobbying and political donation practices, and, perhaps most significantly, only 37% have tied senior leaders’ compensation to environmental sustainability performance.
Climate actions that are more common include using more sustainable materials (67%), increasing the efficiency of energy use (66%), and reducing air travel post-pandemic (55%).
Deloitte classified 19% of surveyed companies as ‘climate leaders,’ defined as those that are implementing at least 4 of the needle moving actions. The survey indicated that these companies were significantly more likely to anticipate financial and reputational benefits from taking climate actions, with 55% expecting to see their initiatives result in positive impacts on customer satisfaction (55% reported, vs 39% of “lagging” organizations), investor returns/satisfaction (45% vs 23%), revenue from new business (45% vs 24%), and cost of investment (40% vs 21%).
Deloitte Global CEO Punit Renjen, said:
“The battle against climate change isn’t a choice, it’s billions of choices. 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.”
Click here to view the report.