Our key takeaway: CEOs say that climate change is a crisis today: it is impacting their business and new business models are needed. Yet, CEOs also find that companies are not adequately prepared for climate change risks, and that just transition is still a new area for business.
The UN Global Compact and Accenture released its 2021 CEO Study on Sustainability ‘Climate Leadership in the Eleventh Hour’ that draws on insights from over 1,232 CEOs across 21 industries and 113 countries, including over 110 in-depth interviews:
- “We are on the precipice of catastrophe”: “Our 2019 CEO Study found that business leaders were severely off track to deliver on their climate goals. Today, the picture is even bleaker. Business leaders are facing an intense landscape, as climate-related disasters occur with startlingly high frequency and intensity. The pressure to act on sustainability from all stakeholders is greater than it has ever been. Global supply chains are fracturing, and inequality continues to rise. Couple this with the fallout from the COVID-19 pandemic, and many businesses are ill-prepared for the coming reality.” When it comes to climate change, “CEOs say climate change is a crisis today, rather than a future crisis in 2030 or 2050.” CEOs report the results of climate change today, including supply-chain interruptions due to extreme weather events and interference with core business operations related to shifting weather pattern. CEOs make clear that “CEOs who are not shifting to net-zero business models are putting their companies at risk.”
- CEOs believe that business is not ready – at the same time sustainable business models are on the rise: “In the largest and most powerful global self-assessment ever voiced from CEOs on sustainability, this year’s study finds that CEOs widely believe that business is unprepared to navigate the challenges of climate change. These same CEOs give an equally stark call to action for their industries to step up, align themselves with the Paris Agreement, and respond with decisive action to avert global catastrophe.” CEOs also report feeling that “their industries are neglecting biodiversity risks, undermining their own climate ambitions and threatening cataclysmic ecosystem collapse.” At the same time, CEOs report an acceleration in the transition to more sustainable business models, with “81% of CEOs … already developing new products and services leveraging electrification, sustainable materials and circular design.” For instance, “nearly three in four CEOs (74%) have begun deploying new and circular business models.”
- Just transition is new and not top of mind: “While leading CEOs are cognizant of the inevitable workforce transformation, many are not as focused on the risks. Less than one in five CEOs globally consider widening social inequalities across the workforce (19%) to be a top risk due to the physical impacts of climate change. Only 16% consider reduced opportunities for workers, unions and local communities to be a top risk.” Further, “CEOs say they have yet to implement measures to mitigate workforce disruption and ensure a just transition.” Although leading CEOs recognize the importance of relevant investments, action is lagging: “only half of CEOs globally (50%) have implemented social security nets to protect their workforces from significant climate-related risks. In addition, less than half of CEOs globally (47%) are investing in green jobs to deliver on the 2030 Agenda and the Paris Agreement.”