Survey of 2,000 businesses shows ‘no retreat from sustainability action’
Despite high-profile rollbacks, Deloitte claims ‘executives see few trade-offs between business success and climate action’
A survey of more than 2,000 C-level executives “indicates there is no retreat from sustainability action by businesses”, according to Deloitte.
Respondents identified climate change as the third “most pressing” issue to focus on over the next year, after AI and innovation, and economic outlook, with almost all (92%) saying they believe their company can continue to grow whilst decarbonising.
The 2,103 participants, interviewed between May and June, came mainly from companies with under 10,000 employees, although a number of large listed firms were also represented.
Chief Sustainability Officers and CEOs accounted for 40% of responses, with chief technology, information and financial offers accounting for around another 30% combined.
More than two thirds (69%) said their companies had marginally increased investment into sustainability over the past year, with a further 16% describing the uptick as “significant”.
Just 1% said there had been a decrease over the period.
Countering the ‘ESG backlash’ narrative
The results fly in the face of broader signs that companies are rowing back on their sustainability efforts, buoyed by growing ‘anti-ESG’ sentiment from politicians across Europe and the US.
In July, it was revealed that Nike had slashed its sustainability team by 30%. Unilever has majorly scaled back its world-leading green and social ambitions over the past year, including goals related to plastics and carbon emissions.
Microsoft and Google are among the big tech companies to have rethought their climate targets after seeing emissions spiral in pursuit of AI and data centres.
Mining giant Glencore ditched plans to spin-off its coal assets over the summer, with CEO Gary Nagle saying: “The pendulum has swung on ESG over the last nine to 12 months” and investors were no longer as bullish about corporate sustainability as they were going into 2023.
Deloitte’s survey found that nearly 30% of responding companies had taken minimal or no action on sustainability, despite most also recognising the impact climate change would have on their business.
Methods and motivation
The most popular improvements include using more sustainable materials, renewable energy and technology-based climate solutions, alongside increasing energy efficiency and developing new green products and services.
There has been a major shift in the motivations for making such improvements, according to the report.
“This year saw more CxOs citing direct environmental and business impacts, rather than less tangible benefits,” it noted.
In 2023, ‘brand recognition and reputation’ topped the list of benefits, followed by ‘customer satisfaction’, ‘innovation around offerings and operations’, ‘employee morale’ and ‘addressing climate change’.
In the latest report, ‘addressing climate change’ took the top spot, with customer and staff satisfaction coming in second and third, respectively. In fourth place was supply chain efficiency and resilience, and then operating margins.
The power lies with the plodders
Deloitte highlighted the importance of the large number of middle-of-the-road performers – those that are neither laggards nor leaders on sustainability, but may pursue a limited number of actions.
“This middle group represents a sleeping giant,” it said. “If it awakes, going from moderate to mobilised, it could create a true tipping point in corporate climate action, and catalyse rapid advances”.