A new survey reveals how a sizeable minority of CEOs are continuing to ignore climate issues - their misjudgement amounts to a shocking dereliction of duty
PwC today provided an update on its annual global CEO Survey, which revealed a number of trends that are either massively encouraging or deeply disturbing, depending on which way you look at them.
Take the news 70 per cent of UK CEOs are concerned about climate change, including 31 per cent who are 'extremely concerned' about the issue, up from 24 per cent last year. It sounds great, until you ask yourself what on Earth are the other 30 per cent possibly thinking?
The picture is similar globally with the survey of over 1,700 CEOs globally revealing only 30 per cent are 'extremely concerned' about climate change, while 27 per cent say they are 'not concerned at all' or 'not very concerned'. Meanwhile, 60 per cent have not yet factored climate change into their strategic risk management activities.
It is hard to view such statistics as anything other than evidence of a vast dereliction of duty from the boss class. How - five years on from the Paris Agreement, amidst an avalanche of net zero goals and legislation, and in the face of ever worsening extreme weather impacts - can you lead an organisation while being so myopic as to not recognise climate change as a cause for concern? The very real fear is that this sizeable rump of corporate climate laggards is going to condemn the rest of us to runaway warming and all the catastrophes that come with it.
However, the survey also points to how a net zero economy might be built around those who remain strangely sanguine at the very real threats to the universe's only known biosphere. Around 60 per cent of UK CEOs said they expected to increase investment in improving their sustainability and ESG performance over the next three years, despite the obvious and considerable economic headwinds. Again, you could ask what are the remaining 40 per cent thinking? But the harsh reality of industrial transformation is that 100 per cent uptake is not necessary to change the world. There will be Netflixs and there will be Blockbusters.
As COP26 climate action champion Nigel Topping stressed to the audience at this month's Net Zero Finance event we are either at or very close to the inflection point in a 'S curve' across multiple clean technologies and green business models.
The CEOs who recognise this are the ones now upping their investments in sustainability, partly because they are concerned about climate risks, but also because they recognise the competitive opportunities. They can see a giant offshore wind industry being built in the North Sea, they have watched the rush by top brands to develop net zero strategies, they are no doubt impressed by Arrival's $13bn electric vehicle IPO, they will have clocked Octopus Energy's transformative expansion plans.
Yesterday, former ClientEarth lawyer Alice Garton reflected on the news Chancellor Rishi Sunak has ordered all financial regulators to adopt a net zero mandate and the way in which so many financial sector insiders used to scoff at the idea.
I realise I shouldn't gloat but I remember so many meetings with financial regulators on climate in my early days at @ClientEarth where they were patronising and dismissive when we said it mattered to their core mandates. It did then and it does now. Good to make it explicit. https://t.co/DQlixb9f6s— Alice Garton (@AliceGartonCE) March 25, 2021
As the pioneering corporates switch to electric fleets, launch new green products, and slash their energy costs, the 30 to 40 per cent of CEOs who have failed to engage with this mega-trend will look ever more adrift of both the zeitgeist and the new regulatory and market reality. They are falling behind the S curve - a curve that becomes so steep it can quickly prove impossible to catch up.
Their current judgements are badly, demonstrably, recklessly flawed. Their investors, employees, customers, and other stakeholders should be asking questions, starting with what on Earth are you possibly thinking?
A version of this article originally appeared in the BusinessGreen Overnight Briefing newsletter, which is available to all BusinessGreen subscribers.