by Park Soyeon
Published 15 Oct.2024 08:48(KST)
As climate change brings rapid transformations across the industrial ecosystem, a survey has revealed that many companies are taking an active stance on climate change and sustainability responses.
According to the "Deloitte Global CEO Sustainability Survey Report 2024," conducted by Deloitte Korea Group on more than 2,100 top executives (CEOs, CFOs, CTOs) across 27 countries on the 15th, the proportion of global top executives who said they increased sustainability investments this year rose from 75% last year to 85%. Additionally, the share who believe climate change will impact their companies over the next three years increased from 61% last year to 70%.
Forty-five percent of global top executives also responded that they are in the process of transforming their business models to make climate change and sustainability core elements of their corporate strategies. Notably, innovation and technology investment are key drivers of sustainability activities, with 50% of global top executives having adopted technological solutions for climate and environmental goals, and 42% planning to implement them within two years.
Jennifer Steinmann, Deloitte Global Sustainability Business Leader, stated, “Each company’s sustainability strategy is moving beyond regulatory compliance, risk management, and stakeholder engagement to a new phase,” adding, “This clearly demonstrates that a proactive and holistic approach to sustainability can translate into business value.”
Global top executives believe that business success and climate action are not mutually exclusive. Ninety-two percent responded that companies can grow while reducing greenhouse gas emissions, and that the world will take sufficient measures to prevent the worst impacts of climate change. Additionally, 90% believe that the world can achieve both climate change mitigation and economic growth simultaneously.
The role of moderate corporate groups also deserves attention. Currently, moderate corporate groups engaging in two to three sustainability activities such as energy efficiency and eco-friendly product development account for 56% of all respondents. Deloitte views these moderate corporate groups, which make up more than half of the surveyed companies, as having the potential to bring a turning point in climate action. These moderate groups are divided into two subgroups: one focuses on sustainability businesses providing products and services necessary for the green economy, while the other emphasizes becoming sustainable companies that impact their broad ecosystems, including supply chains and society. Both approaches are important, and leading companies pursuing four to five sustainability activities employ both approaches to establish comprehensive sustainability strategies without bias toward either.
Among Korean top executives, 36% identified “climate change” as the most urgent issue to focus on next year. This is the same percentage as those who chose “technological innovation” and higher than the 34% who cited supply chain issues. Eighty-three percent of Korean top executives reported slightly increasing sustainability investments last year, with 5% stating they increased them significantly. Furthermore, 66% of Korean top executives expect climate change to have a major impact on corporate strategy and operations within the next three years, and 55% said changes in consumer patterns and preferences due to climate change are already affecting their companies.
Among Korean top executives, 46% reported being affected by severe floods and sea-level rise, while 71% expressed that they are always or almost always concerned about the impacts of climate change, indicating a high level of awareness and concern. In response, 59% of Korean companies have adopted technology solutions, 56% are expanding sustainability-related hiring, and 54% are placing greater emphasis on including climate risk monitoring in corporate governance processes.
Nicola Weir, Deloitte Asia Pacific Sustainability and Climate Change Leader, said, “The emerging complex ESG regulatory environment is raising concerns among top executives, and many companies are beginning to realize that the costs of inaction on ESG issues exceed the costs of decarbonization investments.” She added, “In this chaotic situation where environmental damage causes supply chain disruptions and affects countless people, prompting companies to reconsider their strategies, we hope this report provides insights that help top executives address sustainability challenges.”
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