Interim results from PwC’s Annual CEO Survey show that CEOs at major international businesses are coming to terms with the implications of the transition to a low-carbon economy, reinforced by the new global agreement on climate change reached last weekend at the conclusion of COP21 in Paris.
Just under half of CEOs (45 percent) surveyed globally believe issues of resource scarcity and climate change will transform wider stakeholder expectations of their business. They also recognize they need to do more to measure and communicate their value and environmental impact (the interim survey results are based on the responses of 834 CEOs — the 19th Annual PwC CEO Survey typically surveys roughly 1,300 CEOs and will be released in Davos in January).
Business and financial services had a high profile at COP21, with commitments on finance and investment, deforestation, renewables, and carbon emission reductions launched throughout the talks.
PwC’s interim results show that of 834 CEOs globally:
79 percent are making changes to minimize the social and environmental impacts of their business operations
75 percent are making changes to minimize the social and environmental impacts of their supply chain.The Agreement in Paris seeks to limit global warming to well below two degrees.
While the goal may have substantial economic benefits in the long term, smart, targeted policies at a national level are needed to help achieve this ambition, to boost business confidence in tackling and investing in climate change and environmental risk strategies.
However, the interim results show that now, less than a quarter of CEOs (24 percent) believe governments are effective at reducing environmental impacts; 42 percent believe governments are ineffective.
In the closing days of the summit, business groups at the climate talks in Paris called for the role of business and private finance to be explicitly referenced in the text of the Agreement to recognize its role in action and finance raising.
“Business and industry is a part of the solution to a changing climate, not just on the receiving end of policy and regulation,” said Celine Herweijer, PwC's sustainability and climate change partner. “What's been agreed is a good result for longer-term confidence and so business investment and planning. But the real signal to business will come from how national climate plans are implemented and some of these are more ambitious than others.
“An explicit reference to the role of business and the private sector in the Agreement gives the license for companies, boards and decision makers to design and implement low-carbon economy solutions as part of their business strategically with a good understanding of the risks and opportunities for their specific business. Governments cannot do this alone, and it’s vital that at a national level policy frameworks are developed with business to deliver rational, affordable and progressive action on climate change."