Deloitte research reveals a majority of organizations increased sustainability investments over past year amid global uncertainty.
Deloitte’s 2023 CxO Sustainability Report: Accelerating the Green Transition finds global C-level business leaders (CxOs) view climate change as a top priority for their organizations amid global uncertainty. When asked to rank the issues most pressing to their organizations, many CxOs rated climate change as a “top three issue,” ahead of seven others, including innovation, competition for talent, and supply chain challenges. In fact, only economic outlook ranked slightly higher.
In addition, 75% of CxOs said their organizations have increased their sustainability investments over the past year, nearly 20% of whom said they’ve increased investments “significantly,” according to Deloitte.
Deloitte says it built upon past research by surveying more than 2,000 CxOs across 24 countries to gauge concerns and actions from business leaders on climate change and sustainability. The report also identifies key recommendations for organizations to help close the gap between ambition and impact in order to accelerate progress to a low-carbon economy.
“If there was any doubt that climate change is an enduring part of the business agenda, the increased focus on sustainability by leaders over the past year should put it to rest. In a year of continued uncertainty, disruption, and competing business challenges, leaders ranked climate change as a top issue,” says Deloitte Global CEO Joe Ucuzoglu. “The path to a more sustainable future will take time, it will require businesses investment, and it will be driven by new and innovative technologies, and creative approaches. It is promising to see that C-suite leaders are making sustainability a priority and increasing their investments to help lead the way.”
The Deloitte report noted that almost every CxO surveyed said their organization has felt the impacts of climate change over the past year. CxOs reported “resource scarcity/cost of resources” as the top issue already impacting their companies (46%), while 45% highlighted “changing consumption patterns or preferences related to climate change” and 43% reported “regulation of emissions” as other top issues impacting their companies. Additionally, around a third of executives said climate change is negatively affecting their employees’ physical (37%) and mental (32%) health.
In addition to the impact on their businesses and stakeholders, 82% of executives said they have been personally impacted by climate events over the past year, with extreme heat the most frequently cited issue, and 62% said they feel concerned or worried about climate change all or most of the time.
Despite these concerns, the report showed that 8% of leaders are “somewhat” or “extremely” optimistic the world will take sufficient steps to avoid the worst effects of climate change, and 84% agreed/strongly agreed that global economic growth can be achieved while also reaching climate change goals.
“Our survey tells us that CxOs believe that both their organizations and the global economy can continue to grow while reaching climate goals and reducing greenhouse gas emissions,” says Jennifer Steinmann, Deloitte global sustainability & climate practice leader. “Leaders should also harness their optimism to drive sustained, measurable impact, which will require ramping up climate adaptation efforts while also facilitating innovation that ensures a just transition for all stakeholders.”
The Deloitte report also noted that organizations are taking action: 59% are using more sustainable materials, 59% are increasing the efficiency of energy use, 50% are training employees on climate change, and 49% are developing new climate-friendly products or services. They are also ramping up climate adaptation efforts: 43% are updating or relocating facilities to make them more climate change resistant; 40% are purchasing insurance coverage against extreme weather risks; and 36% are offering financial assistance to employees who have been impacted by extreme weather.
For additional report details, visit deloitte.com/CxOReport