A view from the C-suite: Green optimism and investing in solutionsDespite global concerns, 78% of leaders are “somewhat” or “extremely” optimistic the world will take sufficient steps to avoid the worst effects of climate change.
The majority of C-level executives (CxOs) remain optimistic that the world will take sufficient steps to avoid the worst impacts of climate change and are committed to investing in initiatives, but many organisations have yet to embed climate considerations into their organisation's culture, a report found.
The Deloitte 2023 CxO Sustainability Report surveyed 2,016 C-level executives, spanning 24 countries.
"While the vast majority of CxOs surveyed share the view that the world can achieve global economic growth while also reaching climate goals, there continues to be a gap between actions and impact as organisations are slower to implement the 'needle-moving' actions that embed sustainability into the core of their strategies, operations, and cultures," the report said.
Climate issues are a pressing concern for C-suite executives surveyed:
- 62% said they feel concerned about climate change all or most of the time.
- 97% said climate change will impact their organisation's strategy and operations over the next three years, with 61% saying it will have a high/very high impact.
- 75% said their organisations have increased sustainability investments over the past year, with nearly 20% saying they've increased investments "significantly".
- 78% feel somewhat or extremely optimistic that the world will take sufficient steps to avoid the worst impacts of climate change.
The report found that climate change continues to be a pressing issue for the executives surveyed, ranking ahead of seven other issues, including innovation, competition for talent, and supply chain challenges. Only economic outlook ranked higher, and only slightly so.
However, C-level executives note that a disconnect between senior leaders and government bodies continues to slow progress, according to the report. Twenty-one per cent indicate that their organisations have no plans to tie senior leader compensation to environmental sustainability performance, and 30% said they have no plans to lobby government for climate initiatives.
"As seen last year, while companies are taking action, it is less likely they are implementing actions that demonstrate they have embedded climate considerations into their cultures and have the senior leader buy-in and influence to effect meaningful transformation," the report said.
Despite the fact that internal obstacles remain, 56% of organisations report an increase in their sustainability investments over the last year, with only 3% reporting a slight decrease, the report said. Eighty-four per cent of CxOs agree or strongly agree the world can achieve global economic growth while also reaching climate goals.
The report recommends that organisations should begin now to embed climate goals into company strategy; take credible action to ensure that data is relevant and reliable; and collaborate with boards, stakeholders, and government bodies to accelerate the green transition.
Deloitte's report emphasises the value of investing in new technologies to help businesses formulate effective strategies and cutting-edge solutions. The report also reinforces the importance of looking towards the future opportunities that sustainable practices can offer.
"Although investing in the necessary change today may cause temporary financial discomfort, effective investments will pay off in the long run, especially as demand for sustainable products and services increases," the report said.
— To comment on this article or to suggest an idea for another article, contact Steph Brown at Stephanie.Brown@aicpa-cima.com.