Australia stands to lose $3.4 trillion by 2070 if we don’t act fast, Deloitte says. Pic: Mark Garlick via Getty Images
Green Energy: 3 in 4 Australian execs believe the world is at ‘tipping point’
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Australian executives are “very concerned” about climate change and believe the world is at tipping point to act, with a new survey highlighting a major shift in opinion across the corporate landscape in only eight months.
The 2022 Deloitte CxO Sustainability report, which surveyed 102 Australia business leaders, finds 74% see the world is at tipping point, compared to the 52% recorded in early 2021.
Almost all respondents – 95% – indicated their companies had been negatively impacted by climate change, and about half said their operations have been affected with either a disruption to business models, supply networks worldwide, mitigation costs or pressure from society.
Despite this, a prevailing sense of optimism remains with 89% agreeing that with immediate action, the world can limit the worst impacts of climate change.
Climate agenda: ‘Something we (almost) all agree upon’
Deloitte climate and sustainability leader for Asia Pacific Will Symons said the survey demonstrates what many of us have been hearing – corporate Australia is leading the climate change response.
“The climate agenda has gone from being Australia’s most divisive issue to being something that we (almost) all agree upon,” he said.
“However, there’s a disconnect between the recognition of the need to act and the actions that must follow.
“CxOs are not yet convinced on the link between climate action and the core drivers of value creation – long-term revenue, margin, and asset values.
“Demonstrating this link requires the integration of climate change response into corporate strategy, with all but three of the over 100 CxOs surveyed saying their organisation plans to do this within the next three years.”
The business case for change is compelling, Deloitte says, as Australia stands to lose $3.4 trillion by 2070 if we don’t act fast.
We could also gain $680 billion with rapid, focused action.
More can be done
But while Australian companies are more advanced than the global average and are much more likely to be implementing the tougher, “needle-moving” actions defined by Deloitte’s analysis, it is clear there is more that could be done.
The report found companies are less likely to have implemented actions that demonstrate they have embedded climate consideration into their cultures and have the senior leader buy-in to effect meaningful transformation.
This includes actions like “requiring suppliers and business partners to meet specific criteria” and “tying senior leaders’ compensation to sustainability performance”.
Additionally, CxOs continue to struggle with the short-term costs of transitioning to a low carbon future.
The lowest-ranked benefits of climate strategies cited by CxOs were revenue from both longstanding and new business, and the cost of investment.
Stakeholder pressure to act
Not surprisingly, a moderate-to-large degree of pressure to act on climate change has also been felt by Australian companies from different stakeholder groups.
Most of the CxOs surveyed believe it is important for the Australian Government to mitigate climate impacts, noting it would impact their voting choices in elections.
