CEOs Are Losing Interest in Sustainability - Survey
CEOs are losing interest in sustainability as the hard yards involved in actually meeting existing carbon reduction commitments sink in.
So says new research from Bain & Company, which reports that CEOs are more concerned about AI, growth, inflation and geopolitical uncertainty than rising global temperatures.
And this at a time when consumers are moving in the opposite direction.
In a separate Bain survey of nearly 19,000 consumers in 10 countries, 61% said that their concerns over climate change have increased over the past two years – often sparked by personal experience of extreme weather.
And while 76% of global consumers believe a sustainable lifestyle is important, that figure rises to 90% in Brazil and Indonesia and 84% in Italy, where they have been on the receiving end of extreme temperatures.
The message is the same if you are the CEO of a company that supplies enterprise businesses.
Another Bain survey of 500 B2B buyers and sellers shows sustainability is one of corporate buyers’ top three purchasing criteria, with 36% saying they would leave suppliers which don’t meet sustainability expectations.
Nearly 60% say they would be willing to do so three years from now.
Devastating consequences
And, in downplaying the importance of meeting sustainability targets, are CEOs cutting off their nose despite their face?
Bain estimates a temperature increase of 2 degrees celsius could cut US$6tn from the value of the S&P 500, in addition to the devastating environmental and social consequences.
Nearly one third of companies that actually disclose their carbon emission data are well behind on emissions they either produce themselves or are responsible for via bought-in energy. And almost half are behind on wider Scope 3 emissions.
Jean-Charles van den Branden, Bain’s global sustainability practice leader, said: “The transition to a sustainable world is following a familiar cycle. What began a few years ago as boundless excitement has given way to pragmatic realism.
“As the challenge of meeting bold commitments becomes clear, many companies are rethinking what is achievable and on what timeline.”
Supply chain worries
Meanwhile, CEOs are spending even more time worrying about their supply chains, with 86% of them fretting about an increasingly siloed world, carbon emissions and human rights issues.
Over two thirds of CEOs (70%) are concerned about the potential for human rights issues in their supply chain. Concern is highest among the utilities (78%), manufacturing (77%) and retail (75%) sectors.
And CEOs face complex barriers when it comes to decarbonising their supply chains, with no consensus as to what the biggest barriers are.
While the largest barrier is the complexity of decarbonisation (29%), the other responses carried nearly the same weight (cost, skills and access to data – the largest barrier in larger organisations).
Although there may be significant hype around AI, there is limited adoption in real terms.
Over 99% of CEOs eyeing it for supply chains and 82% planning new AI initiatives this year, only 22% expect it to have any impact in 2024.
Proxima, another Bain company, surveyed 3,000 CEOs in the UK, Europe and the US about their attitudes to supply chains.
Simon Geale, executive vice president and chief procurement officer at Proxima, said: “It’s fair to say that the complexities of global supply chains continue to have CEOs around the world scratching their heads.
“Business leaders are spending more and more time tackling supply chain challenges, reflecting the multiple challenges to address.”
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