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New Deloitte research shows increasing concern among businesses about climate change. It also reveals a disconnect between ambitions, and actual impact

New Deloitte research shows increasing concern among businesses about climate change. It also reveals a disconnect between ambitions, and actual impact

NEW YORK, Jan. 18, 2022/PRNewswire/ — Posted today Deloitte’s 2022 CxO Sustainability report: The Disconnect between Ambition and ImpactThe study reveals that global CxOs (or C-level business leaders) are becoming more concerned about climate change and believe the world is at a tipping point. Eighty-nine per cent of CxOs agree that there is an imminent climate crisis, and 63% state that their organizations are very concerned. They are still struggling to fully integrate sustainability into their core business strategies and operations as well as their cultures.

Deloitte recognized the increasing importance of sustainability and the enormous threat of climate change and built upon it. Past researchMore than 2,000 CxOs from 21 countries were surveyed to assess the concerns and actions of business leaders and companies regarding climate change and sustainability. The report also examines the gap between company ambitions, and the impact of companies and offers suggestions for CxOs to help bridge that gap.

“The fight against climate changes is not a choice. There are billions of choices,” Deloitte Global CEO said. 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 for us to show that we can meet the challenge.

Positive thinking and optimism are motivators for positive change

Executives are becoming increasingly aware of the effects of climate change. CxOs surveyed (79%) believe that the world is at a tipping moment when it comes to responding climate change. This is 20 percentage point more than the previous year. Deloitte surveyIt was conducted eight months earlier, underscoring how important it is to act quickly. 88% of CxOs believe that the world can reduce the worst effects on the planet if it takes immediate action. This is a similar number to 63% eight months earlier. Leaders are becoming more aware of the urgency to act now, as evidenced by the increase in concern and optimism.

CxOs are under pressure at many levels, according to the data.

  • Nearly all respondents (97%) indicated Their companies have already been adversely impactedClimate change has impacted their operations in half of the respondents (e.g.Disruption of supply networks and business models worldwide
  • Eighty-one per cent CxOs were personally impactedBy a climate evente.g.Over the past 12 months, there have been extreme heat, worsening thunderstorms, wildfires, and other hazards.
  • Additionally, stakeholder groups—including regulators, shareholders, consumers, and employees—are all adding to the pressure to act.

“Climate Change is not in the distant future.” It’s here and now, and the choices we make today will affect the quality life for generations to follow,” says Jennifer SteinmannDeloitte Global Climate and Sustainability Marketplace Lead. “A better future depends upon a profound and lasting change of attitude and behavior by governments and businesses as well as individuals. The business community can help model new forms of cooperation that identify the best ideas, regardless of source—and create new and lasting solutions that will have the greatest impact for them, their stakeholders, and their communities.”

There are many disconnects between ambitions and actions.

Companies These areActing: Two-thirds (CxOs) said their organizations use more sustainable materials and increase the efficiency of their energy use. More than half of CxOs have adopted climate-friendly technology, machinery, and equipment. A majority of CxOs are actively reducing air travel and training their employees about their climate actions.

Companies are less likely than others to embed climate considerations in their culture and have the support and influence of senior leaders to make meaningful transformations. Although all sustainability actions are important and necessary, Deloitte has identified five “needle moving” actions that, taken together, demonstrate a greater understanding of the business benefits associated with sustainability. They are:

  • Development of new products and services that are climate-friendly
  • Require suppliers and business partners meet certain sustainability criteria
  • Relocating or updating facilities in order to make them more climate-resistant.
  • Incorporating climate considerations in lobbying and political donations
  • The tying of senior leader compensation to sustainability performances

Comparatively to other climate actions companies are less likely to have taken these five steps, and more than one third of organizations. haven’tEach of them was implemented. Although optimism for change and concern for the environment remain strong, organizations will need to take more decisive actions to limit the worst effects of climate change.

CxOs also listed brand recognition and reputation, customer satisfaction and employee morale as the top four benefits of sustainability efforts. This suggests many CxOs consider climate action beneficial to their relationships. CxOs are still struggling with the short-term cost of transitioning to low carbon. This is evident in the lowest-ranked benefits (revenues from both new and long-standing business, asset values and cost of investment),

Sustainability leaders’ lessons

Deloitte’s survey revealed a group of leaders—19% of the sample—whose organizations serve as a model for tackling sustainability with efficiency and effectiveness, while reaping the benefits in return. These top organizations have implemented at minimum four of the five “needlemoving” sustainability initiatives. Compared to those organizations who haven’t implemented more than one—35% of the total (nearly double the leader group)—these leaders are:

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  • Climate change is being viewed as more serious (74% versus 52%)
  • Climate change will have a significant impact on business strategies in the next few years (73% versus 50%)
  • Plan to reduce net-zero emissions by 2030 (82% instead of 50%);
  • They are less likely to consider cost an obstacle to sustainability efforts. This could be because they have a better understanding and buy-in from senior leaders.
  • They are more likely to see the business opportunity of sustainability as a benefit to their bottom line, stakeholder satisfaction, or general performance.

Renjen states that although not all businesses are at a similar stage in their climate journeys all companies will soon need a customized approach to move from ‘why to ‘how. These actions are important indicators of leadership because they require a mindset that sees both risks and opportunities of sustainability. A culture that embeds climate directly in business strategy, buy-in by senior leaders, and the ability of influencing third parties such as regulators and government, are all essential.

Please visit this page to learn more about Deloitte’s 2022 CxO Sustainability report. Website of Deloitte.

Methodology
The report is based upon a survey of 2 083 C-level executives. The survey, conducted by KS&R Inc. and Deloitte, during September and October 2021, Respondents polled from 21 countries: 44% Europe/South Africa31% from the Americas, and 24% from Europe. Asia Pacific. Our sample included all major industry sectors. Additionally, KS&R and Deloitte conducted select, one on one interviews with global industry leaders.

About Deloitte
Deloitte can refer to Deloitte Touche Tohmatsu Limited (“DTTL”) or its global network member firms and related entities (collectively, “Deloitte organization”. DTTL (also referred as “Deloitte Global”), each of its member firms and related entity are legally separate entities. They cannot obligate nor bind each other in relation to third parties. Each DTTL member firm, as well as any related entity, is responsible only for its acts and omissions. DTTL is not able to provide services for clients. Please see www.deloitte.com/aboutLearn more

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SOURCE Deloitte Global

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