The 2023 Sustainable Value Study conducted by EY presents a concerning scenario in corporate sustainability efforts, particularly in climate action.
According to ESG Today, the survey, encompassing 520 Chief Sustainability Officers (CSOs) from various industries and countries, signals a notable deceleration in climate achievements.
Key findings include:
- A decrease in the average reduction of greenhouse gas (GHG) emissions to 20%, a drop from 30% reported last year.
- Organizations are undertaking fewer climate change actions, averaging at 4 compared to the previous 10.
- An extension of deadlines to reach climate goals, now set around 2050, as opposed to the earlier target of 2036.
These trends correlate with another recent EY survey of senior corporate finance leaders, which suggests sustainability, though a top investment priority, is prone to budget cuts due to current economic and geopolitical pressures
The report also sheds light on the widening disparity between companies excelling in climate action (“pacesetters”) and those lagging (“observers”). Only 34% of respondents anticipate increased spending on climate initiatives this year, a significant decrease from 61% in the previous year. However, despite the slowdown, over half of the companies reported financial and brand value benefits exceeding expectations from their climate initiatives.
EY Global Vice Chair of Sustainability, Amy Brachio, emphasizes the high stakes involved and the necessity to maintain momentum in sustainability efforts despite resource allocation challenges.
Brachio commented, “Amidst the backdrop of unprecedented geopolitical tensions, sustainability leaders are facing clear challenges with resource allocation, but we cannot afford collective efforts to slow when the stakes are so high.”
Matt Bell, EY Global Climate Change and Sustainability Services Leader, stated, “CSOs are facing an inflection point. Most have made climate commitments and are now under pressure to meet them. So, it’s unsurprising that focus has moved from public declarations to implementation and delivery. We are entering a period where deep decarbonization gains are linked to large scale, cross sector, investment, data and transformation.”
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