PricewaterhouseCoopers’ (PwC) 19th Annual Global CEO Survey has shown that business leaders are finally beginning to acknowledge the importance of key issues that go beyond profit, and are willing to adjust their strategies accordingly. The world’s largest professional services firm surveyed 1,409 CEOs from 83 countries and found that exactly half of respondents believe that climate change is a threat to their growth prospects.
The findings represent something of a departure from last year, when the issue of climate change failed to make it into the 19 leading risks identified by chief executives. This year the issue made it to number 11, triggered mostly by COP21 and a string of extreme weather events. A recent World Economic Forum (WEF) survey of 750 experts, however, placed the issue at number one. Writing in the WEF report, Cecilia Reyes, Chief Risk Officer at Zurich Insurance Group, said, “Climate change is exacerbating more risks than ever before in terms of water crises, food shortages, constrained economic growth, weaker societal cohesion and increased security risks”.
More than a quarter of respondents said that their customers were looking for a relationship with companies that address wider societal issues, while 59 percent believed that their employees were more inclined to work for companies that shared their social values. “In the future it seems clear that CEOs believe customers will put a premium on the way companies conduct themselves in global society”, according to the PwC report. “It’s long been assumed that only a small percentage of consumers seek out ethical and sustainable products and services. There’s growing evidence, however, that this is changing.”
The PwC report also found that 66 percent of CEOs see more threats today than in the previous year, and 76 percent believe that business success is about more than financial profit. Irrespective of the focus on climate change, particularly at COP21 and at Davos, over-regulation and geopolitical instability are seen as the biggest threats, which goes to show that short-term concerns still take priority over the longer term.
To read more about corporations’ relationship with climate change, stay tuned for a special report in the next issue of World Finance.