Posted in GreenBiz
December 27, 2021

CEOs say they’re doing all they can — employees disagree

GreenBiz

Corporations were very visible during the recent COP negotiations, touting their green credentials and their drive to net zero. According to the U.N., to achieve the goal of keeping global warming to 1.5 degrees Celsius, “every company, every financial firm, every bank, insurer and investor will need to change.”

So are business leaders and companies up to the challenge? Yes — but not yet. Recent sustainability research shows that a majority of businesses lack integrated strategies for combating climate change; leaders lack sustainability experience, responsibilities and training; and employees lack a clear understanding of the organization’s actions and impact. 

The say/do divide

Despite the urgent need for businesses to help address escalating environmental crises, climate change has not become a top priority for a vast majority of those occupying the corner office. 

Only 25 percent of C-suite leaders globally say climate change, rising sea levels or extreme weather events are critical existential threats to their corporate strategy. 

Just 43 percent say their organizations have sustainability strategies in place that have been acted upon and clearly communicated. And only a nominal 19 percent say sustainability metrics are linked to external reporting frameworks.

The research reveals a significant “say-do” divide between what CEOs say they are doing on environmental issues and what employees see them do. 

  • While 79 percent of C-suite leaders say their organizations’ environmental practices are in line with industry best practices, just 54 percent of employees say the same. 
  • While 78 percent of C-suite leaders say their organizations are doing all they can on climate change, only 53 percent of employees agree. 
  • While 73 percent of C-suite leaders say that their organizations place the same importance on sustainability as they do on profits, only 48 percent of employees say the same. 

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Employees are not impressed

Notably, employees are more likely to see their organizations carry out “bolt-on” environmental initiatives. In our study, 64 percent of employees said their organizations were taking action to reduce waste (recycling, using less packaging, reusing materials), while 68 percent said their organizations were relying on digital technologies to reduce paper use. 

This indicates that most leaders are ticking boxes with tactical environmental-related actions, rather than viewing sustainability as a fundamental driver of business strategy. 

Few C-suite executives have received sustainability training

One barrier to holistically integrating sustainability across business strategy is that only a minority of C-suite leaders have carried out additional sustainability-related responsibilities in the past two years — whether that is changing internal processes to improve environmental or social outcomes (29 percent), identifying new approaches to make their products or workplace more sustainable (28 percent), changing supplier selection to improve environmental or social outcomes (25 percent) or completing an academic study or a qualification with an emphasis on environmental or social sustainability (23 percent). 

Furthermore, just 28 percent of C-suite leaders have received training on environmental or social sustainability issues. 

As the climate crisis takes center stage, businesses will have to get their acts together or risk losing customers and investors and the depreciation of equity and reputation. On the upside, leaders who bridge the divides that threaten our global societies will yield significant triple-line dividends. 

Anjali Bansal, founder of Avaana Capital, recently told us, “Climate change is impacting every single sphere of our life, every single society, every single country. Leaders have a big responsibility to act today to ensure that we leave a healthier planet for the next generation. And through different business models, through innovation-led business models, we have a real opportunity to do that.”

Significant regional variations in attitudes

Interestingly, our research indicated significant regional variations in how companies view sustainability priorities. The U.K. was the holder of the COP26 Presidency, and U.K. executives show more climate awareness than many of their international counterparts. When we asked survey respondents about the most important sustainability issues affecting the future of our society, 40 percent of U.K. C-suite leaders put climate change at the top of the list. The global average was 29 percent. Conversely, just 17 percent of C-suite leaders in Canada and 21 percent of C-suite leaders in Australia cited climate change as a top societal challenge. 

To determine how your market or industry fared, this interactive website produces customized reports by sector, country and cohort — including demographic breakdowns — with the extensive data generated by this unprecedented research. The report also enables leaders to address the challenges and grasp this opportunity by providing:

  • An understanding of the environmental, social and economic divides facing businesses, their implications and action items to address
  • Methodologies to strategically advance a sustainability agenda
  • A roadmap to delivering lasting value for people, planet and profit

As Alan Jope, CEO at Unilever, writes in the foreword to “Divides and Dividends,” “Sustainable business isn’t a strategic priority. It is our strategy. It is our priority.”

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