While each sustainability action is important, the report identified five “needle-moving” actions that, when taken together, demonstrate a deeper understanding of the business benefits of sustainability.
Indian businesses acknowledge the risks of climate inaction, ranking fifth amongst the polled countries in their concern for climate change, finds Deloitte’s Global 2022 CxO Sustainability Survey report. Furthermore, Indian companies are more likely to be implementing the tougher ‘needle-moving’ climate actions compared with their global counterparts to effect substantial and meaningful change. However, they cite measurement and insufficient supply of low emission inputs as challenges in driving sustainability efforts.
Understanding the rising importance of sustainability and the widening threat of climate change, the survey built upon past research by engaging more than 2,000 CxOs across 21 countries. The report examines business leaders’ and companies’ concerns and actions related to climate change and sustainability. It also explores the disconnect between a company’s ambition and impact, as well as steps CxOs can take to bridge the gap.
“India must tackle the climate challenge swiftly to shape a sustainable future and the announcements made during the recent Union Budget 2022 are a step in the right direction. The survey results reassure us that Indian CxOs are taking cognizance and action towards climate change, and the new climate-centric regulations being introduced will help boost accountability. We believe it is the impact that matters and making the right climate actions to ‘move the needle’ now, will have a long-term impact. The report reveals that Indian companies are ahead of their global peers in identifying those bold actions and making them a part of their culture,” said Viral Thakker, Partner, Deloitte India.
Concern and optimism: Motivators for change
According to the report, 80 percent of Indian executives see the world at a tipping point for responding to climate change compared with just 53 percent eight months ago. The report also reveals that they are more focused on incorporating climate into their strategies and operations over the next three years.
Despite the gravity of the moment, there is a prevailing sense of optimism as 94 percent currently (compared with 61 percent eight months ago) agree that with immediate action, we can limit the worst impacts of climate change. The surge in concern, as well as optimism, demonstrates that more leaders are cognizant of the need to act now.
The data shows CxOs are feeling tangible pressure at the following levels:
- Almost all respondents (96 percent) indicated their companies have already been negatively affected by climate change.
- The top climate issue already affecting Indian organisations is employees’ health. Indian companies are slightly more likely to feel the operational effects of climate change and the need to modify industrial processes compared with their global counterparts.
- In addition, stakeholder groups, including regulators, shareholders, consumers, and employees, are adding to the pressure to act.
Indian businesses are taking the “needle-moving climate actions”
While each sustainability action is important, the report identified five “needle-moving” actions that, when taken together, demonstrate a deeper understanding of the business benefits of sustainability. These actions are mentioned below:
- Developing new, climate friendly products or services
- Requiring suppliers and business partners to meet specific sustainability criteria
- Updating or relocating facilities to make them more resistant to climate change
- Incorporating climate considerations into lobbying and political donations
- Tying senior leaders’ compensation to sustainability performance
At a global level, there are disconnects between CxOs’ ambitions and the actions their companies are taking, according to the polled CxOs. However, Indian companies are more advanced than global businesses and more likely to be implementing tougher actions.
Indian organisations are 5 percent more likely to have undertaken the development of new climate-friendly products or services. They are 4 percent more likely to have incorporated climate considerations into lobbying/political donations compared with the global average.
CxOs cite measurement and insufficient supply of low emission inputs as challenges to driving climate actions. However, they are less likely to be concerned about cost or focus on near-term business issues.
Indian CxOs also listed brand recognition and reputation, customer satisfaction, and addressing climate change as the top three benefits of their climate efforts (ranking them significantly higher than the global average). The bottom three benefits were asset values, employee recruitment and retention, and revenue from new businesses.
Lessons from sustainability leaders
Deloitte’s global survey revealed a group of leaders (19 percent of the sample) whose organisations serve as a model for tackling sustainability with efficiency and effectiveness, while reaping benefits in return. These leading organisations have implemented at least four of the five “needle-moving” sustainability actions. Compared with those organisations (35 percent of the total, nearly double the leader group) that have not implemented more than one action, these leaders are:
- More concerned about climate change (74 percent versus 52 percent)
- Expecting climate change to have a higher impact on their business strategies in the future (73 percent versus 50 percent)
- Planning to achieve net-zero emissions by 2030 (82 percent versus 50 percent)
- Less likely to see cost as an obstacle for sustainability efforts, indicating they may have a better understanding of the costs associated with inaction and greater senior leader buy-in
- More likely to understand the business opportunity of sustainability to their bottom lines, stakeholder satisfaction, and general broader performance