Jennifer Steinmann, Global Sustainability and Climate Practice Leader at Deloitte, discusses sustainability’s business advantages and how to unlock them.
Climate change is a top three priority for C-Suite executives – that’s what Deloitte’s CxO Sustainability Report says.
The report, containing insights from more than 2,100 executives across 27 countries on sustainability, says only innovation and economic outlook outrank climate change.
“The evolution for us has been going from being quite operationally focused and quite focused on energy as a big problem to solve, to expanding our strategy to also look at Google as an information and an innovation company and seeing the major opportunity we have to unlock the power of our technology to enable businesses, policymakers, individuals to achieve their sustainability goals and objectives,” Kate Brandt, Chief Sustainability Officer at Google told Deloitte.
Jennifer Steinmann is Global Sustainability and Climate Practice Leader at Deloitte and lead author of the 2024 CxO Sustainability Report.
She is the first to hold this role, providing cross-business leadership to make an impact for some of the most important challenges businesses face.
She believes that holding climate change as a priority for C-Suite leaders is not just a good thing, it makes for good business.
Jennifer shares her insights with us.
Why is sustainability important to business?
More leaders than ever are taking environmental sustainability seriously – so much so that many now see it as core to their long-term business goals. According to Deloitte’s 2024 CxO Sustainability Report: Signs of a shift in business climate action, nearly half of global C-level business leaders (CxOs) say they are transforming their business models to address sustainability issues and are doing so in a way that will be central to their organisation’s strategy going forward.
At a time of continued uncertainty and competing, varied priorities for CxOs, it’s remarkable to see how climate change remains a top-three issue for executives for the third year in a row, this year surpassing issues like geopolitics and competition for talent, with only innovation (including AI) and economic outlook ranking above climate change.
Many executives see sustainability as more than just a compliance exercise. Not only do they recognise the importance of making progress toward climate targets but they are also beginning to realise that taking climate action can be a tremendous growth opportunity.
When we think about this important shift, the survey results I find most relevant are that 85% of organisations have increased sustainability investments in the past year, up from 75% in 2023, with 70% of executives expecting climate change to have a high or very high impact on their company’s strategies and operations over the next three years.
What’s more, leaders are increasingly looking to technology to help them supercharge their progress, with 50% of CxOs reporting they are already implementing technology solutions to achieve climate or environmental goals, and an additional 42% expecting this work to begin within the next two years.
How can climate change perspectives work with business opportunities?
Our research shows that CxOs share a number of perspectives regarding climate change, their sustainability commitments and the business opportunity in the transition to sustainability.
The vast majority (76%) feel concerned about climate change all or most of the time, even as most (92%) remain optimistic about their organisations’ ability to grow while reducing greenhouse gas emissions.
And leaders are looking beyond the positive impact on climate and recognizing the competitive edge they could gain through their sustainability investments and initiatives.
First and foremost, they see it as a powerful innovation kick-starter, identifying innovative offerings or streamlined operations as the top benefits of their sustainability efforts over the next five years. And as organisations look to recruit the best and brightest Gen Z and millennial workers, taking climate action helps.
Gen Z and millennial workers want their employers to act responsibly on issues that matter to them. Deloitte’s 2024 Gen Z and Millennial Survey found that as many as four in 10 Gen Zs and millennials say they have already changed or plan to change their job or industry due to climate concerns.
Despite this forward momentum, we still see that many companies are only taking a few high-impact actions, such as developing new climate-friendly products or services or requiring suppliers to meet specific sustainability criteria.
Neither sustainability leaders nor laggards, this “moderate middle” group makes up more than half of the roughly 2,100 organisations in Deloitte’s survey and this is the group we believe has a critical opportunity to help drive progress toward our global sustainability goals. They are primed for action, with more than half (52%) expecting climate change to have a significant impact on their business in the next three years.
They represent a sleeping giant and if this group as a whole wakes to extend their high-impact actions, it could create a tipping point that will catalyse rapid progress toward collective climate action.
How can companies accelerate sustainable progress?
For companies in the “moderate middle” that have made some progress on sustainability but have the potential to do so much more, here are practical ways to accelerate efforts to create business value and advance climate action:
- Use technology to enable sustainability. Technologies like advanced data analytics, IoT and AI can streamline operations and decision-making processes, helping enhance the efficacy and scalability of sustainability initiatives.
- For example, one organisation Deloitte worked with is a Canadian food manufacturer that leveraged tech solutions to set its net-zero targets, create a personalised roadmap to get there, calculate emissions and assess potential decarbonization pathways and monitor their progress in real time—ultimately accelerating progress towards their sustainability targets.
- Consider the environmental impact across the entire value chain and beyond. Focusing solely on internal operations isn’t enough. By looking at the broader ecosystem, leaders can better address systemic issues and create more substantial, lasting change.
- Deloitte worked with a leading cocoa producer as they set up a digital platform to track cocoa beans back to the farms where they were grown, helping prevent beans from deforested areas entering the supply chain. The platform has the ability to aggregate the most crucial data available in the supply chain, enabling supply chain transparency and allowing their food and beverage manufacturer customers to make better informed environmental, social and business decisions.
- Collaborate. Customers, suppliers, regulators and, yes, even competitors can all help amplify the impact of a company’s sustainability efforts.
- Deloitte advised a global consumer products company that knew that in order to meet its sustainability goals, it needed to work closely with its suppliers to ensure they were progressively increasing their climate efforts in parallel. Leaders at this company decided to leverage one particularly strong supplier’s assessments and benchmarks to inspire both additional changes within its own organisation and spur net-new climate action in their other suppliers’ organisations.
- Focus on where you can have the most impact. Instead of spreading efforts too broadly, focus on a handful of areas where you can have the most substantial, positive impact and invest the necessary resources.
- Deloitte is assisting a large shipping, freight and courier network that is honing in on a comprehensive plan to decarbonize its nationwide fleet through converting to electric vehicles. The company is focusing on optimising operational efficiencies, leveraging infrastructure upgrades and tapping into government incentives to reduce costs to ultimately address the biggest source of its emissions.
Every organisation’s sustainability journey is unique and is oftentimes less than straightforward. But the business case for additional, substantive sustainability focus and action is only getting stronger—helping organisations boost innovation, compete for the best talent and make an impact not only for the environment but also for long-term resilience and growth.
Time is of the essence.
