Climate change: buy-in on sustainability business case triples among high-level executives, survey shows

The proportion of top corporate executives who recognise the business case for sustainability has tripled in the last year, according to a survey, amid record-breaking temperatures and climate disasters coupled with more stringent regulation.

More executives also acknowledge that the benefits of incorporating sustainable business practices outweigh the costs, and view sustainability as more than simply a financial obligation, said the survey of more than 2,000 high-level leaders, published on Wednesday.

The percentage of executives across industries who agree that the business case for sustainability is clear increased to 63 per cent from 21 per cent a year earlier, according to the survey by Capgemini Research Institute, a unit of Paris-headquartered consulting firm Capgemini. This means they believe companies can realise economic success while performing on environmental and social aspects.

“The summer and fall of 2023 were the most disturbing in terms of record high temperatures across continents, and extreme weather events bringing unprecedented damages,” said Cyril Garcia, head of global sustainability services and corporate responsibility at Capgemini. “The consequences of climate change are becoming impossible to ignore, and so is the future cost of not taking action.”

Workers assess a landslide that blocked a section of Yiu Hing Road in Shau Kei Wan, Hong Kong, on September 9, 2023. Photo: Xiaomei Chen

The number of executives expecting to increase future revenue by adopting sustainability strategies grew to 75 per cent in 2023 from 52 per cent in 2022, according to the survey, which collected views in August and September from 2,151 executives at director level and above in 718 organisations with at least US$1 billion in annual revenue. The companies represented 11 industries and 13 countries in North America, Europe and Asia-Pacific.

Respondents cited increasingly extreme weather events, significant costs from climate disasters and increasing pressure from regulators as motivations to adopt environmental and social sustainability strategies and to set carbon reduction targets.

Despite heightened sustainability awareness, a significant increase in investment in mitigation actions against climate change is unlikely in the short term, the survey found.

While the percentage of executives who still believe the costs of sustainability outweigh the benefits dropped from more than half in 2022 to a fifth in 2023, the average annual investment in sustainability initiatives, as a share of the annual revenue, only increased by 0.01 per cent year on year.

Organisations also continue to fall short on reporting, especially measuring and collecting scope 3 emissions – the emissions attributed to a company’s value chain. Similarly, actions around sustainable product design and environmental disclosures have seen limited to no movement, the report found.

“What we really need to see in the months to come is companies investing in future-proof sustainability measures and pivoting their business models to build sustainable products and services,” said Garcia.

“It’s now or never for organisations: only those who will have invested early enough and put sustainability at the centre of their strategy will be able to truly realise the benefits.”