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Sustainability Targets a Priority for Businesses as Challenges Exist

(Credit: Pixabay)

More executives are “very concerned” about climate change than they were less than a year ago, according to a survey from Deloitte — and almost all companies surveyed have seen impacts from climate change as they struggle to make sustainability targets part of their business strategies and operations.

Deloitte surveyed more than 2,000 executives in 21 countries and found that 79% see climate change as a significant issue for their businesses, up from 59% at the beginning of 2021. Nearly nine out of 10 of the executives say there is a crisis and 63% say their organizations are very concerned.

However, 88% say they are optimistic that with immediate actions the impacts can be limited, which is up from 63% from the earlier survey.

To tackle these issues, according to the survey, approximately two-thirds of the executives say their organizations are using more sustainable materials and increasing energy efficiency. More than half of the respondents say they have adopted energy efficient and sustainable equipment and technology.

Deloitte says steps to improve include developing sustainable products and services and requiring suppliers and business partners to meet specific sustainability criteria. Additionally, companies can update facilities or relocate to make them more resistant to climate impacts. Deloitte also says senior leader compensation can be tied to sustainability performance.

Compared with other sustainability actions, companies are less likely to have addressed the above issues and more than one-third of them haven’t implemented more than one of them. Additionally, stakeholders including regulators, shareholders and consumers are adding to the pressure to act, according to Deloitte.

Being accountable and transparent is becoming more important across organizations’ supply chains. Investors are also putting a focus on environmental, social and governance issues, even pushing to have more standards around ESG reporting.

The survey does show that executives see reputation and customer satisfaction as top benefits of their companies’ sustainability efforts, suggesting that they see their targets as beneficial to their stakeholders.

Nearly all the respondents say their companies have been negatively impacted by climate change and about half of respondents say their business operations have been impacted, such as with supply networks.

Climate volatility and natural events have been a growing concern for businesses, although a survey from Cervest revealed 47% of organizations have integrated the issue into their financial risk management objectives.

The lowest ranked benefits, according to the Deloitte survey, include cost of investment and operating margins, which means executives struggle with short-term costs of transitioning. Some of the obstacles the survey revealed include the difficulty of measuring environmental impact, insufficient supply of low-emissions inputs, the costs and short-term business objectives.

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