It’s changing into more and more obvious {that a} warming planet and excessive climate occasions are having a direct affect on practically each financial sector worldwide—but company leaders imagine sustainability and local weather change are low on the checklist of the largest crises they presently face, in response to a brand new analysis report carried out by South Korea-based world enterprise community SK Group. What they actually care about is retaining the lights on amidst rising inflation, provide chain disruptions and the continuing impacts of the COVID pandemic.
This report got down to determine the present viewpoints of sustainability as a disaster, perceive how organizations have responded to emergencies previously, and the way they will greatest leverage their experiences with previous crises to design and implement ESG packages and initiatives shifting ahead.
Local weather performs second fiddle
“Backside-line enterprise points nonetheless take priority over broader world points, equivalent to ESG initiatives and sustainability,” mentioned Hyunghee Lee, president, Social Worth Committee, SK SUPEX Council, in a information launch. “That is regarding provided that local weather change poses a risk to each particular person, group and firm. The silver lining is that companies have change into adept at adjusting to crises. If we will get extra company leaders to grasp the implications of local weather inaction, we’ve got an opportunity to rework industries and considerably scale back greenhouse gasoline emissions.”
Bouncing again from disaster
Crises affect organizations in a different way. About one in 10 survey respondents mentioned a disaster over the previous 5 years threatened the existence of their group. Moreover, 41 % mentioned the occasion considerably impacted the corporate’s capability to function or develop.
Different crises have been much less extreme, with 46% of respondents saying the issue solely considerably restricted the corporate’s capability to function or develop. The fact is that any disaster can have a major affect, dramatically altering the way in which most organizations and groups work. Among the largest modifications occurred when it comes to budgets and each human and technological sources.
However crises can even depart a long-lasting optimistic affect. When companies survive a serious disaster, they will emerge stronger and extra environment friendly than ever earlier than. In reality, 84 % of respondents agree {that a} disaster has helped rally their individuals collectively in the direction of a shared objective. Moreover, 70 % mentioned their group’s technique implementation capabilities grew stronger on account of the disaster and 61 % mentioned their firm is now higher off than it might have been if it had by no means confronted the disaster.
Limitations to motion
ESG and enterprise sustainability have had an issue with turning guarantees into actions as a result of sustainability isn’t considered as a disaster. So what could be completed to make corporations higher perceive the connection between local weather change and financial stability?
In some unspecified time in the future, each traders and corporations will come to the belief that being sustainable isn’t just good for the planet—it is usually good for the underside line. However, once more, why have so many corporations did not take decisive motion? Resistance to alter is the most typical problem skilled by organizations trying to implement sustainability initiatives, cited by 37% of respondents. Moreover, lack of workers sources together with worker mindset/conduct are high issues, cited by 31 % of respondents, respectively.
One other hanging discovering from the examine is that respondents really feel that their group is both typically or generally adaptable to adopting sustainability methods within the face of enterprise challenges, but solely 8 % really feel this manner constantly.
The excellent news is {that a} majority of respondents imagine that organizations bear essentially the most duty for financing sustainability packages or initiatives. One other 26 % mentioned this duty falls on the federal government, whereas 12 % mentioned shareholders; solely 6 % imagine this duty falls on the shopper. What’s extra, 75 % say their group’s sustainability technique is crucial to the general success of their enterprise. About half of organizations have an current clearly outlined sustainability technique and one-third don’t.
SK Group has dedicated to reducing 200 million tons of carbon emissions throughout its corporations by 2030. SK, which has companies within the semiconductor, power and life sciences sectors, amongst others, is investing $52 billion within the U.S. by 2030 with the vast majority of new investments targeted on clear power and applied sciences.
Obtain the entire report right here.
The survey was fielded on-line and reached a complete of 504 U.S. professionals with a job position of Supervisor or larger.
