Chief executives see reputational boosts in combatting climate change
Three-quarters of UK business chief executives believe that responding to the climate emergency through new business pledges and initiatives will provide a reputational advantage, with climate change climbing up the corporate agenda according to a new annual survey from PwC.
PwC’s 23rd annual CEO Survey, released today (20 January) found that 64% of UK chief executives feel that climate change is a threat to their organisation, with a quarter claiming to be extremely concerned about the issue. This is triple the rate from 2016 levels, which sat at just 7%.
Of the 1,581 chief executives surveyed globally, 51% believe that responding to climate change will lead to new product and service opportunities. In the UK, 74% believe that response measures will create a reputational advantage for their organisations amongst key stakeholders.
PwC’s chairman and senior partner, Kevin Ellis, said: “The impact of climate change has soared up the CEO agenda. CEOs see the impact across all aspects of business, from assets and investments to products and jobs. They are facing pressure from their consumers to play their part.
“This means boards need to assess their strategies, risks, and business models. Achieving net-zero by 2050 will demand innovation and transformation at an unprecedented scale and speed and will require business to take positive action.”
In the UK, 54% of chief executives do not believe that international policies are being introduced to mitigate climate change risks and only 21% believe they are seeing effective change. Globally, 36% believe that there has been an effective change to global climate policy.
UK chief executives are concerned about UK policy changes. In total, 36% are more concerned about climate-related regulation compared to other areas.
Globally, business leaders from Sri Lanka and New Zealand most concerned about climate change (86% and 83% respectively) with those from the Middle East and China the least (38% and 45%).
The survey arrives as all business leaders and companies attending the World Economic Forum in Davos this week have been asked to make public commitments to achieving net-zero emissions by 2050 or earlier.
In a letter from the Forum’s Founder and executive chairman Klaus Schwab and the heads of Bank of America and Royal DSM Brian Moynihan and Feike Sijbesma, businesses have been urged to respond to climate science through the setting of a net-zero target.
However, a survey from Vlerick Business School has found that only 6% of UK chief executives have financial incentives and bonuses tied to environmental strategies and performance across the business practice.
Last year, the chief executives of more than 180 corporates began lobbying for other big businesses to stop maximising profits for shareholders at the expense of the environment or society.
In a statement from the Business Roundtable – a collaborative, US-based organisation with 192 members, hailing from all major sectors and covering all states. Members of the Business Roundtable collectively control more than $7trn in annual revenues, with their companies covering more than 15 million employees in the US and beyond.