Over the last year, global executives have faced a number of challenges, including economic uncertainty, geopolitical conflict, supply chain disruptions, and talent shortages, among others. Despite these headwinds, CxOs indicate that concern over climate change continues to be a top priority for their organizations. While the vast majority of CxOs surveyed share the view that the world can achieve global economic growth while also reaching climate change goals, there continues to be a gap between actions and impact as organizations are slower to implement the “needle-moving” actions that embed sustainability into the core of their strategies, operations, and cultures.
When asked to rank the issues most pressing to their organizations, many CxOs rated climate change as a “top three issue.”
•Climate change ranked ahead of seven others, including innovation, competition for talent, and supply chain challenges. In fact, only economic outlook ranked slightly higher.
•Many of them (61%) said climate change will have a high/very high impact on their organization’s strategy and operations over the next three years.
•Some 75% said their organizations have increased their sustainability investments over the past year, nearly 20% of whom say they’ve increased investments significantly.
CxOs are highly worried about climate change but also optimistic about climate action:
•62% said they feel concerned about climate change all or most of the time.
•Almost all respondents indicated their companies were negatively impacted by climate change in some way over the last year, and 82% of CxOs have been personally impacted.
•Yet, 78% feel somewhat or extremely optimistic that the world will take sufficient steps to avoid the worst impacts of climate change.
Companies are feeling broad pressure to act across stakeholder groups—from the board/management to customers to employees:
•More than half of CxOs said employee activism on climate matters has led their organizations to increase sustainability actions over the last year—24% of which said it led to a “significant” increase.
•Regulation is also influential: 65% of CxOs said the changing regulatory environment has led their organization to increase climate action over the last year.
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.
•For example, 21% of CxOs indicate their organizations 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.
•Additionally, when asked about how serious certain groups are about addressing climate change, only 29%of CxOs said they believe the private sector is “very” serious.
•And only 46% said that ensuring a “just transition”* is “extremely important” to their organizations, and the view of its importance differs greatly by region and country.
Our report further explores the disconnects between ambition, action, and impact as well as steps CxOs can take to help bridge the divide and accelerate progress to a green transition.