PwC released results from its 24th Annual Global CEO Survey, revealing that many CEOs do not yet perceive climate change as a major threat to their businesses, and are also not incorporating climate risk into their strategic risk management activities.
PwC polled over 5,000 CEOs in 100 countries and territories over January and February 2021, from companies ranging in size from under $100 million in revenues to over $25 billion, covering a broad range of topics.
On the topic of factors that could potentially threaten their companies’ growth prospects, climate change barely cracked the top ten, with the top spots going to pandemics and health crises, cyber threats, and over-regulation. Overall, only 30% of CEOs listed climate change as a potential threat, marking a modest increase compared to 24% in the 2020 survey, and 27% of CEOs reported being ‘not concerned at all’ or ‘not very concerned’ about climate change.
The report also indicated a lack of action by CEOs on addressing climate risks, with 60% of CEOs reporting not yet factoring climate change into their strategic risk management activities. PwC noted a moderately negative correlation between exposure to natural hazards and companies’ preparedness for climate-related risk, with companies in countries with the most exposure being less likely to have embedded climate change into their overall risk management approach.
While CEOs in the survey appeared to downplay the risks from climate change, the need to measure and report on environmental sustainability issues does appear to be gaining traction. 39% of CEOs responded that their organisations need to do more to measure their environmental impact, and 43% believe their organisation needs to do more to report on it, a greater share than any other disclosure area.
Bob Moritz, Chairman of the PwC Network, said:
“To address the biggest challenges facing our world today, we need to change the incentives that drive decision-making. This requires the financial markets taking a broader view of value, beyond solely financial return and short-term value, so capital will flow to the right places. Better and comparable non-financial corporate reporting is crucial too, so stakeholders can see how companies are creating value for society and our planet, as well as meeting their financial objectives. Companies that get this right will enhance their brand and build trust with their stakeholders.”