Even as they navigate an escalating number of disruptive challenges, chief executive officers say they are not giving up on sustainable development goals.
Nearly half of them agree, however, that geopolitical instability has set back their sustainability efforts, and those at the helm of smaller enterprises and companies in developing countries especially want more help from governments and financial institutions, according to a new study.
The CEO study, jointly released by professional services firm Accenture and United Nationals Global Compact (UNGC) this month, had responses from more than 2600 chief executives across 128 countries and 18 industries, the largest sample size since the study started in 2007.
Climate change was ranked as a global challenge with the fourth-most serious impact on businesses, coming after inflation and price volatility, talent scarcity and threats to public health. However, the CEO study found that business leaders were “severely off track” to deliver on sustainability and climate goals.
The report stated that the seemingly contradictory response was due to the barrage of challenges that businesses have to handle, many of them unconventional. 93 per cent of CEOs said that they were dealing with more than 10 challenges that had global impact.
Besides the Covid-19 pandemic, one new challenge that businesses had to navigate was geopolitical instability and tensions. The study said that the fallout is changing the ways that businesses operate, as geopolitical shocks have strong influence on supply chains and have driven up the cost of raw materials.
About 87 per cent of CEOs said that this will limit the world’s ability to achieve the sustainable development goals (SDGs), while 43 per cent agreed that geopolitical instability already has a dampening effect on their sustainability efforts.
In particular, companies in the developing world, as well as small and medium-sized enterprises (SMEs) globally, are facing the strongest headwinds. Statistics from the study show 49 per cent of SME chief executives saying that their sustainability efforts have been impacted, compared to just 36 per cent from those at the helm of the largest companies.
The world is now nearly at the halfway mark to 2030, the deadline set to achieve the SDGs – a blueprint designed by the UN to achieve a better and more sustainable future for all. Valentin de Miguel, a senior managing director at Accenture and its lead for sustainability services told Eco-Business that with the volatile business environment, CEOs want to see that their sustainability investments will bring back returns. Projects that are costly or that which have hard-to-measure returns end up taking a backseat, he said.
It has also been difficult for chief executives to prioritise nature and biodiversity goals. “We heard from CEOs in Asia that nature and biodiversity are [their] priority areas for the future, but that it has been challenging for them to initiate ‘nature-positive’ projects due to a lack of standards and measurement tools,” De Miguel added.
A nature positive approach looks at how biodiversity can be enriched and how the resilience of our planet and societies can be enhanced. The report said that while CEOs have made commitments and are beginning to implement strategies to address their companies’ biodiversity goals, most still do not understand how to integrate and address these goals across the business landscape.
Other popular sustainability initiatives carried out by companies and CEOs to strengthen business resilience include workforce skill development (55 per cent), advancement of the digital transformation for sustainability (52 per cent), and launching sustainability products and/or service offerings (52 per cent).
