Most executives believe it is possible to decouple growth from emissions

A wide majority (92%) of C-suite executives believe their companies can continue to grow while decarbonising their operations and supply chains, meaning the elusive goal of decoupling growth from emissions is achievable.

This is according to Deloitte’s third annual survey of 2,100 C-suite leaders, including Chief Sustainability Officers, across 27 countries, which shows that climate change remains in the top three priorities for most firms (after innovation, including artificial intelligence, and the economic outlook).

Sustainability investment is rapidly increasing

The report reveals that 85% of firms have increased sustainability investment in the past year – including 16% that increased the budget by 20% or more. Most of the investment is going towards sustainable innovation, with 45% of executives saying they are transforming their companies’ business model to address climate change.

For instance, Google Chief Sustainability Officer Kate Brandt noted: “The evolution for us has been going from being quite operationally focused and quite focused on energy as a big problem to solve, to expanding our strategy to also look at Google as an information and an innovation company and seeing the major opportunity we have to unlock the power of our technology to enable businesses, policymakers, individuals to achieve their sustainability goals and objectives.” 

Thanks to innovation, a wide majority (90%) believe that the world can achieve global economic growth while also reaching climate change goals. In fact, 37% say that sustainability efforts have helped them increase operating margins, highlighting a growing realisation that climate action can bring financial benefits.

Many C-level executives have been personally impacted by climate change

It’s no wonder that climate change is a pressing priority for companies: many C-level executives have personally felt the effects of climate change, with 45% having been impacted by severe floods, 41% by extreme heat and 39% by droughts and water shortages.

As a result three-quarters say they feel concerned about climate change most or all of the time – up from 62% last year.

This first-hand experience is also increasing leaders’ commitment to climate equity and the just transition, with 54% working with local communities to help mitigate climate change vulnerability.

Regulatory and stakeholder pressure on climate change

Unsurprisingly, climate regulation is one of the largest drivers of action among companies, and 60% feel pressured by governments to act on climate change. In addition, 60% feel this pressure coming from board members, management and/or shareholders and investors.

Despite that, only 7% of firms are focusing their sustainability efforts purely on ensuring compliance with new regulatory requirements.

Interestingly, 19% of C-suite executives report feeling concerned that “taking a stance could alienate a subset of customers or employees”, denoting growing political divisions on the topic of climate change – particularly in the United States.