KPMG "Corporate Decarbonization Strategies Need to Consider Human Resources"

[Asia Economy Reporter Ji-hwan Park] A survey has revealed that consideration of 'human resources' is crucial in corporate decarbonization strategies.

According to a report published on the 12th by accounting and consulting firm KPMG and law firm Eversheds Sutherland, based on a climate change-related survey of global executives, one in three global leaders anticipated that decarbonization would have some negative impact on organizational personnel.

The report surveyed 1,095 CEOs and board members from 11 countries including the United States, the United Kingdom, China, and Japan, regarding climate risks and sustainability. Leaders from 16 major industries such as finance, manufacturing, and energy participated in the survey, which was published for the second consecutive year.

When asked about the expected impact of decarbonization on employees, 34% of respondents predicted negative effects and indicated the need for retraining employees. Thirty percent of respondents expected some layoffs due to the transition to a low-carbon organization, and 13% believed that employees resisting change would leave to find new jobs.

Forty-six percent of respondents anticipated resistance from employees to business model changes resulting from decarbonization, viewing effective workforce change management as a critical factor for business growth. The report emphasized that successful decarbonization requires consideration of not only employees but all stakeholders, and cooperation with governments and others is necessary to secure the required skills.

While all global executives who responded to the survey stated they have strategies for identifying, verifying, and reporting climate risks, only half (49%) have established clear carbon neutrality plans.

Only 47% of respondents reported having climate change experts on their boards. Thirty-eight percent said their existing boards are responsible for climate risks but lack expertise, and 15% indicated plans to include climate change experts on their boards as none currently exist.

Additionally, 82% of respondents have introduced senior executive compensation and incentives tied to decarbonization goals, but fewer than one in three have set individual or team KPIs and incentives for a broader range of employees.

All respondents agreed that companies must change their business models to effectively respond to climate risks. Last year, only 74% agreed that such changes were necessary.

Seventy-four percent of global leaders reported currently possessing the expertise and personnel to develop and implement carbon neutrality plans. Last year, 47% of global leaders cited lack of technology as a barrier to decarbonization.

Ji-young Jeong, Executive Director of the Organization and HR Consulting Team at Samjong KPMG, emphasized, "While there has been significant awareness and recognition of the importance and necessity of preparing for climate change, there is still a need to make progress in establishing concrete business model changes and operational plans."

He added, "To achieve this, it is important to secure climate-related expertise among senior executives, clarify the capabilities of human resources to implement the changed business model, establish reskilling plans, and above all, promptly execute comprehensive workforce change management related to business operations associated with climate change."

This content was produced with the assistance of AI translation services.