The vast majority of large companies around the world have increased sustainability-related investments in the past year as C-suite executives have become more concerned about the impact of climate change on their companies, while simultaneously focusing on direct business. Benefits and opportunities presented by climate and sustainability initiatives, according to a new survey published by global professional services firm Deloitte.
For this study, Deloitte’s 2024 CxO Sustainability Report, Deloitte and market research firm KS&R surveyed more than 2,100 C-level executives in 27 countries, across a range of industries and company sizes, from $500 million in revenue to more than $10 billion. .
The report found that climate change remains a top priority for executives, ranking third in order of importance on the survey’s list of the most important issues to focus on in the coming year, held by 37 percent of respondents. mentioned, which is far from innovation (including artificial). intelligence and digital) and economic perspective each 38 percent.
The high ranking of climate change as a priority comes at a time when executives are increasingly concerned about its impacts, with 70 percent of respondents reporting that they expect climate change to have a large or very large impact on strategy. and the operations of their company in the next three years. It has increased from 61% last year. Among the most important climate-related issues already affecting companies, 51% of executives cited changing consumption patterns or preferences, followed by 50% to regulations aimed at reducing greenhouse gas emissions or environmental impacts. environmental and 50% reported operational impacts from climate-related disasters. Weather events
While executives reported becoming more concerned about climate change, the report found that they are increasingly focused on opportunities to achieve direct benefits for their businesses through sustainability-related investments and initiatives. Tangible benefits such as supply chain efficiency and flexibility and operating margins are among the top 5 benefits already experienced by companies as a result of sustainability efforts compared to less tangible benefits such as brand recognition and reputation reported in the previous year’s survey. Notably, nearly half of respondents said their companies are taking steps to develop new climate-friendly products or services.
Looking ahead, CEOs foresee innovation around their operations and offerings as the top expected benefit of their sustainability efforts, cited by 38 percent, with other benefits including addressing climate change (37 percent), the ability to Attracting and retaining talent (36%), and cost savings and lower capital expenditure (36%).
Jennifer Steinman, Deloitte Global Sustainability Business Leader, said:
We may have entered a new phase in corporate climate action, one where sustainability strategy goes beyond a focus on compliance, risk management and stakeholder accountability. “Instead, sustainability is increasingly serving as an engine for new value creation, a competitive differentiator, and a driver of innovation and transformation.”
In addition to seeing more opportunities, executives also appear to be more optimistic about addressing climate change, with 92 percent agreeing that their companies can continue to grow while reducing emissions, and 92 percent reporting who are optimistic that the world will consume enough. Actions to prevent the worst impacts of climate change, up from just 78% last year.
The survey found that as executives experience and anticipate the benefits of their sustainability efforts, they are also investing more in these initiatives, with 85 percent of respondents reporting that they increased their sustainability investments in the past year by more than 5 percent, up from 75 percent. percent last year and only 1 percent reported a decrease in investment. Additionally, 45 percent of executives reported that their companies are changing their business models to address climate change and sustainability as a core part of their strategy, and another 35 percent said that sustainability considerations are embedded throughout the organization, but It still does not affect the core of the organization. Business model
Examining what companies are doing as part of their sustainability efforts, the survey found that half of companies are already implementing technology solutions to help achieve climate or environmental goals (50%) and are developing products or services. The new ones are compatible with the climate (48%). with other top measures including using more sustainable materials, increasing energy efficiency (49%) and purchasing renewable energy (49%).
Top areas of technology implementation include supply chain environmental performance monitoring and management, with 57 percent of respondents saying they are implementing technology solutions, followed by process or operations efficiency at 54 percent, internal monitoring of sustainability and performance data at 54 percent. Development of new sustainable products or services with 52% and external reporting of sustainability data with 49%
Additional key actions taken by companies according to the survey include requiring suppliers and business partners to meet specific sustainability criteria, reported by 47% of respondents, reconfiguring operations, infrastructure and supply chains for greater flexibility (46%), and building relationships with leaders. He was senior. Stability performance compensation (43%).
The report also shows that CEOs are focusing more on “just transition” issues, or ensuring that the benefits of the transition to a green economy are widely shared and support those who are economically disadvantaged, with 55 percent have reported that these factors are very important. Their companies’ sustainability efforts, citing actions taken including working with local communities to help reduce vulnerability to climate change, were reported by 54%, and half (49%) of respondents said they prepared workers for the transition to green jobs. they do
Joe Ucuzoglu, CEO of Deloitte Global said:
“It’s encouraging to see a significant increase in investment in sustainability efforts in this year’s data, along with a focus on using technology as a catalyst to advance climate solutions. We’re seeing more organizations looking to transform their core business models to address To climate change, climate action is the lever to drive innovation and growth, create new value for our stakeholders and differentiate ourselves from our competitors.”
Click here to access the survey.
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