DAVOS, Switzerland—Climate change was a top priority for c-level business leaders amid global uncertainty, according to Deloitte's 2023 CxO Sustainability Report: Accelerating the Green Transition.
When asked to rank the issues most pressing to their organizations, many c-suite leaders (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. Also, 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."
"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.
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."
Forty-three percent 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.
Despite these concerns, 78% 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.
Deloitte's survey finds that organizations are feeling broad pressure to act on climate change from across their stakeholder groups. Sixty-eight percent of CxOs said they feel a large-to-moderate degree of pressure from board members and management, regulators and government, as well as consumers and clients.
Employee activism is specifically driving increased action, with more than half of CxOs saying employee pressure on climate matters led their organizations to increase sustainability actions over the last year. Regulation is also influential: 65% of CxOs said the changing regulatory environment led their organizations to increase climate action over the last year.
Deloitte reports 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.
When asked how serious certain groups are about addressing climate change, only 29% of CxOs said they believe the private sector is "very" serious. Nearly a quarter of CxOs said the difficulty of measuring their organizations' environmental impact was a top barrier to increased action, and nearly one-fifth cited cost and focus on near-term issues as barriers.
NACS houses helpful sustainability-related resources online under the Sustainability Playbook, where retailers can scour information related to ESG, packaging, alternative fuels and energy saving opportunities.