The vast majority of CEOs are committed to taking action to tackle climate change for both moral and commercial reasons, but are they making action to cut emissions a board-level priority?
As the world' political leaders prepare to gather in Paris for the UN's crucial climate summit, uncertainty remains as to what their counterparts from the world of business want to see come out of the latest attempt to agree an international climate change agreement.
Sure, a growing band of progressive businesses have called for an ambitious new treaty to be finalised, while the representatives of some of the world's most polluting industries are known to be privately opposed to anything that requires them to modify their carbon intensive business models. But what of the bosses of the vast majority of firms that sit somewhere between these two extremes? What do they think about climate change? And are they even that interested in what may or may not result from the Paris Summit?
These are some of the questions PwC set out to answer with its latest Pulse Poll of global CEOs, which saw the consultancy giant survey 142 business leaders about their attitudes to climate change and the way it impacts their commercial decisions. The results confirm C-suite executives remain a conflicted bunch when it comes to climate change. They widely regard it as a crucial moral and commercial issue, but rarely talk about it in board meetings. Equally, they tend to focus on rising energy prices or tightening environmental regulations, but are surprisingly indifferent to the potential outcomes from Paris, even if an ambitious treaty could unleash ever more demanding national regulations.
However, beneath this confusing headline picture there is encouraging evidence a growing band of corporate leaders are committed to tackling climate change risks and seizing the related green economic opportunities.
Speaking to BusinessGreen, Jon Williams, partner at PwC's sustainability and climate change team, admitted at first glance the results of the new survey appeared a little disappointing. "When asked about what motivated them to take action on climate change 81 per cent said they wanted to protect the interests of future generations, which is great, but it is the kind of CSR-led answer you were used to seeing 10 years ago," he reflects. "But if you dig a little deeper you see there is a shift in what is motivating people to take action. For example, 53 per cent say they are driven by a desire to improve shareholder value and 54 per cent are making strategic investments to take advantage of green growth opportunities."
The results suggest a majority of business leaders are now looking to take action to tackle climate change because they recognise the new market opportunities and benefits of enhanced resilience. Williams adds that this harder-nosed commercial focus is starting to challenge the softer benefits that traditionally drove corporate action on climate change, such as the desire to secure reputational benefits, even as a clear majority of corporate leaders continue to insist their green strategies are driven by a moral desire to do the right thing.
This growing focus on the commercial drivers behind efforts to tackle climate change is evident throughout the survey results. Nearly 90 per cent of firms said they had made energy efficiency improvements in their business, while three quarters have taken steps to develop more sustainable products and services and 74 per cent have set recycling targets. In addition, 61 per cent have changed how they monitor business risks in light of climate change and the same proportion now take pollution into account when making operational planning decisions.
Where business leaders have concerns about climate change, a majority recognise how the issue can have a significant impact on their operations. For example, 61 per cent express concerns with rising energy prices, 56 per cent are concerned with increase government regulation, and 51 per cent are worried about climate related supply chain disruptions.
"As climate change starts to affect access to raw materials, the reliability and security of global supply chains, and even the type of products and services consumers demand CEOs must also take a strategic view - one that looks to the short, mid and long-term, to identify both the risks and opportunities for their business," the PwC report states. The results suggest growing numbers of them are starting to get this message.
Perhaps the most encouraging result for those who wish to see the private sector lead efforts to tackle climate change is the realisation amongst CEOs that the public - ie their customers - are increasingly keen to see them play a role in addressing the issue. Fully 80 per cent of CEOs surveyed said they expected greater public awareness of climate change to drive action.
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