Deloitte: Why CxOs see Sustainability as Growth Opportunity

Businesses can make a huge impact in addressing climate change through reducing emissions.

A report from Deloitte, based on a survey of 2,103 C-level executives across 27 countries, shows that business leaders increasingly see climate action as a growth opportunity, not a constraint.

Deloitte’s 2024 CxO Sustainability Report shows a growing belief that corporate sustainability is a core business strategy.

Rising investments

According to Deloitte’s report, a growing number of businesses are ramping up climate efforts with 85% of organisations having increased sustainability investments in the past year –  a jump from 75% in 2023. 

Climate change is now seen as a top-three business issue, overtaking political uncertainty, regulatory pressures and talent competition.

"Executives are beginning to see more tangible benefits from taking climate action for their organisations… pointing to sustainability as a driver of new products, business models and value creation overall,” says Jennifer Steinmann, Global Sustainability Business Leader at Deloitte.

The report states that 70% of CxOs expect climate change to have a high or very high impact on their strategy and operations over the next three years.

Further, 45% of CxOs say they are already transforming their business model to place climate and sustainability at the heart of their organisation’s strategy.

Powering climate solutions

Technology is playing a vital role in helping organisations meet their climate goals. 

Half of all CxOs surveyed have already implemented technology solutions to support environmental targets and another 42% plan to do so within two years. 

More than half of these organisations are using tech to develop or help develop sustainable products and services.

It’s recognised that innovation is both the biggest challenge and the greatest opportunity.

Innovation, including AI, is ranked in the report as the most pressing issue for CxOs over the next year.

Notably, 38% of executives expect innovation around offerings and operations to be the top benefit of their sustainability efforts in the next five years.

Business benefits

Sustainability is now recognised as a lever for business performance. 

92% of CxOs believe their company can grow while reducing emissions, with 90% believing the world can achieve economic growth while tackling climate change.

Financial and environmental benefits are increasingly visible. 

Supply chain efficiency and operating margins (both 37%) have entered the top five reported advantages of taking climate action, overtaking more intangible factors like brand reputation.

Customer loyalty (38%) and employee well-being (37%) also featured prominently.

Talent attraction is another area seeing a positive shift with CxOs ranking the ability to recruit and retain talent as a top-three benefit of improved sustainability. 

This continues on from Deloitte’s 2024 Gen Z and Millennial Survey, which showed that more than  four out of10 younger workers have changed or plan to change jobs over environmental concerns.

Driving real impact

Despite strong momentum, only 17% of organisations are leading with four or more “needle-moving” climate actions. 

In contrast, 56% sit in a “moderate middle”, implementing two to three impactful actions such as reconfiguring operations or setting supplier standards.

This group, Deloitte says, holds the key to accelerated progress. 

“The companies in the moderate middle group in our analysis are primed to take advantage of the broader market momentum by building on their existing experience to take additional deeper, transformational actions,” says Jennifer Steinmann.

“Ultimately, this increased action will help accelerate progress toward our collective global climate goals.”

In China, the shift is equally pronounced. 

“Climate change continues to rank among the most pressing issues facing CxOs in China,” explains Lily Li, Deloitte China Sustainability National Leader. 

“Compared to their global counterparts, Chinese CxOs appear to be more challenged by a lack of sustainable solutions, highlighting the importance of investing in research and development to innovate and adopting new sustainability products and services through collaboration with ecosystem stakeholders to drive the sustainability agenda forward.”

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