Bracing for climate change, passively

Jan 19, 2023 View in browser   By Jordan Wolman THE BIG PICTURE Courtesy of Deloitte The corporate world knows climate change is affecting its bottom line. But it's still grappling with how to turn that recognition into action. Ninety-seven percent of the 2,016 executives in a new survey by accounting firm Deloitte said they expected climate change to impact their companies' strategy and operations over the next three years. Forty-two percent ranked climate change as a top three most pressing issue. And 6 in 10 reported feeling concerned about climate change all or most of the time — with 82 percent saying they've been personally impacted (mostly by extreme heat, but also by water restrictions and more-intense storms). Execs are also feeling the heat to act, according to the Deloitte survey, which polled respondents from 24 countries from all major sectors last fall and was released at this week's World Economic Forum gathering in Davos, Switzerland. About two-thirds said they feel large or moderate pressure from board members, managers, shareholders, regulators, consumers and clients to act on climate. Seventy-five percent said their organizations had increased sustainability investments over the past year. But the report also found "disconnects between ambition, action and impact." Courtesy of Deloitte Only 29 percent of executives said the private sector is "very" serious about addressing climate change (one point higher than those who said governments are "very" serious). Less than half said that ensuring a just transition is "extremely important" — and only 31 percent of U.S. business leaders said as much. The vast majority of respondents said they have not taken more difficult steps like tying senior leaders' compensation to sustainability performance, and most said they don't feel their organizations' sustainability efforts have a positive impact on investor returns and revenue — although they do on brand recognition and reputation. Never mind that, though. Respondents are optimistic over the long term (where, Deloitte finds, the costs of climate inaction will far outstrip the costs of transitioning to net zero) . Seventy-eight percent are somewhat or extremely optimistic that the world will take sufficient steps to avoid the worst impacts of climate change. Even more think the world can both achieve global economic growth while also reaching climate goals. "Cost of inaction is often overlooked when talking about sustainability, but in reality, it is much greater than the cost of action from a risk, reputation, compliance and stakeholder perspective," Tjeerd Krumpelman, global head of reporting, regulations and stakeholder management at the Dutch ABN AMRO Bank, said in the survey.   STEP INSIDE THE WEST WING: What's really happening in West Wing offices? Find out who's up, who's down, and who really has the president's ear in our West Wing Playbook newsletter, the insider's guide to the Biden White House and Cabinet. For buzzy nuggets and details that you won't find anywhere else, subscribe today.     YOU TELL US GAME ON — Welcome to the Long Game, where we tell you about the latest on efforts to shape our future. We deliver data-driven storytelling, compelling interviews with industry and political leaders, and news Tuesday through Friday to keep you in the loop on sustainability. Team Sustainability is editor Greg Mott, deputy editor Debra Kahn and reporters Jordan Wolman and Allison Prang. Reach us all at gmott@politico.com, dkahn@politico.com, jwolman@politico.com and aprang@politico.com. Want more? Don't we all. Sign up for the Long Game. Four days a week and still free! WHAT WE'RE CLICKING — Shell is projecting a five-fold jump in voluntary carbon markets by 2030, Reuters reports. — Fear of political opposition is hampering mayors' abilities to fight climate change, according to Axios. — Uber is collaborating with automakers on the design of their electric vehicles, the Wall Street Journal reports.   LISTEN TO POLITICO'S ENERGY PODCAST: Check out our daily five-minute brief on the latest energy and environmental politics and policy news. Don't miss out on the must-know stories, candid insights, and analysis from POLITICO's energy team. Listen today.       Follow us on Twitter Debra Kahn @debra_kahn Greg Mott @gwmott Jordan Wolman @jordanwolman Allison Prang @AllisonPrang   Follow us

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