According to a recent Deloitte report, while business leaders are becoming more aware of the potential implications of climate change on their organisations and communities, there is a gap between ambition and action. The report polled over 2,000 executives from 21 countries across North America, Europe, Africa, Asia, and Oceania. These executives, whom Deloitte refers to as “leaders,” have taken “needle-moving” steps that can inspire other businesses to move toward a low-carbon future.
Launching climate-friendly products or services, requiring suppliers and business partners to meet sustainability criteria, updating or even relocating facilities to make them more climate resilient, taking climate policies into account when evaluating lobbying and political donations, and linking executive compensation to a company’s sustainability performance are all examples of such actions.
Climate “leaders,” according to Deloitte, took at least four of the five actions listed above, and the report concludes that they are “more likely than others to see the benefits of their efforts and less likely to see cost and short-term priorities as obstacles — perhaps an indication they understand the price of climate inaction.”
Companies already Experiencing the Climate Change Impact
According to the survey, 97 per cent of businesses have already felt the harmful consequences of climate change. Furthermore, 81 per cent of executives claim that climate disasters such as severe weather and rising sea levels have personally impacted them in the past year.
While numerous industries have been affected by ongoing disruptions to their business models and supply chains around the world, the consumer products, automotive, technology, transportation, and hospitality sectors have been the hardest hit. Taking steps to lessen a company’s carbon impact is one of these adjustments. For example, 55% of businesses responded by cutting down on unnecessary air travel.
Despite increased anxiety about the long-term effects of climate change on businesses, executives are currently more hopeful (88%) than they were eight months ago (63%) when Deloitte released its previous poll on executives’ attitudes on climate change.
Concerns of the companies from taking Climate Action
Many businesses are aware of the need to address the risk immediately in order to achieve financial stability later, but many are concerned about the costs of doing so. Executives in Europe, for example, are motivated by regulatory changes, but those in Asia are motivated more by operational concerns. When questioned about the benefits of climate action, company leaders said that brand recognition and reputation, customer happiness, and employee morale and well-being were the most important factors.
It’s critical for firms to make their climate measurements as rigorous as other data if they want to have a long-term impact, but a third of CEOs indicated assessing their organisations’ environmental impact is a top hurdle. Companies have a hard time finding the correct framework for coordinating goals and KPIs with their suppliers.
As a result, they’re focusing on low-hanging fruit, such as adopting more environmentally friendly products and equipment and improving energy efficiency. These actions aren’t insignificant, but they’re on a lesser scale and rely heavily on optics. This could be one of the reasons why, according to the survey, only 43% of executives feel their sustainability initiatives will have a meaningful impact on climate change.
