In late 2021, a global survey from Deloitte asked over 2000 CxOs across 21 countries about their motivation to tackle climate change, the ambition of their organizations and the impact of their actions. The survey showed the following results relating to the motivation behind climate action:
- Approximately two-thirds of executives answered their organizations are very aware and worried about climate change and 79% feel to be at a climate change tipping point—this number was twenty percent lower in a comparable survey done in early 2021.
- 97% of companies have already experienced negative effects of climate change.
- Around 80 % of CxOs said they’ve been personally affected by climate events over the past year.
Nevertheless, there seems to be an increased optimism towards this topic as well. Almost 90 % approved that with instant action, we can reduce the negative effects of climate change. That figure was 25 % lower in the comparable study in early 2021.
Disconnect between Ambition & Impact
While companies are adapting, they are less likely to implement strategies that show they have embedded climate concerns into their cultures and have the management buy-in and power to secure meaningful change. The disconnect between ambition and action can be seen in the following findings:
- As an example, executives rather stick to “use more sustainable materials” than to “develop new climate-friendly products or services.”
- On top, executives still have problems to assess the short-term costs of transitioning to a low-carbon future.
Recommendations for Companies
Looking at impactful ways to tackle climate change the following “needle-moving” strategies are recommended for implementation:
- Creating new, climate-friendly products or services.
- Demanding suppliers and business partners to meet specific sustainability criteria.
- Renewing or moving facilities to make them more resistant to climate impacts.
- Integrating climate considerations into lobbying and political donations.
- Binding management compensation to sustainability performance.
Only around 20% of CxOs took a leading role and introduced at least 80% of the mentioned recommendations into their climate strategy.
Looking at the situation of German executives compared to the global average, there are the following differences:
- German companies are still feeling less pressure to act on climate change from their stakeholders, but are more likely to feel the regulatory impacts, pressure from society, mitigation costs and resource scarcity in the future.
- They often choose less impactful climate strategies than the global average and see “having difficulties measuring their environmental impact” as one of the biggest obstacles to sustainability efforts.
If you and your company want to catch up to the leading executives acting on climate action, then you could get in contact with one of our experts at DFGE via mail () or phone (+49 819 29973320) and make the next step with a carbon footprint calculation, the conceptualization of an impactful climate strategy or guidance on CSR reportings like CDP and EcoVadis.