CEOs Unequivocally Call for Bold Government Action and Consistent Climate Policy at COP26
In the largest sustainability study conducted to date by the United Nations Global Compact and Accenture (NYSE: ACN), only 18% of CEOs said that governments and policymakers have given them the clarity needed to meet their sustainability and climate change targets. Released just ahead of COP26 in Glasgow, business leaders are also sounding the alarm on the early onset of climate-induced disruption and looking for government action — particularly in areas of clear carbon pricing, infrastructure investment and financial commitments to an equitable net-zero transition in the Global South — as the window to meet the 1.5°C target by 2030 has started to close.
According to Climate Leadership in the Eleventh Hour — which includes extensive 1:1 interviews with more than 100 leading chief executives and a survey of over 1,100 CEOs across 113 countries and 21 industries — private sector leaders are struggling to accelerate their climate ambitions, even though nearly three-quarters (73%) say they feel increasing pressure to act. More than half (57%) of surveyed executives say they are prioritizing climate action amid their recovery from the COVID-19 pandemic.
Forty-nine percent of CEOs point to supply chain interruptions due to extreme weather as a top risk, but only 7% said they are ‘advanced’ in setting up early warning systems to prepare for climate-risk events. Moreover, 71% say they are actively working to develop a net-zero emissions target for their company and 57% believe they are operating in line with the 1.5°C goal. Yet as an indicator, only 2% of these companies have a formal target validated by the Science Based Targets initiative.
“There are two possible roads ahead: a deeply flawed business as usual approach, or a global economy that protects people, the planet and the natural systems that sustain us,” said Sanda Ojiambo, CEO and Executive Director of the UN Global Compact. “Business as usual is no longer an option. It is clear from the CEOs we surveyed that the business community feels unprepared to deal with our climate emergency. The UN Global Compact has a critical role to play in helping companies develop practical tools and effective best practices to deal with the challenges ahead, while also ensuring they can engage with governments on policy and regulation.”
The landmark study also points to a key stakeholder shift when it comes to driving CEOs’ climate leadership and action. The biggest shift seen in 14 years of the study was investors and capital markets moving from eight in 2019 to top three in the minds of CEOs going into COP26. The trend reflects the largest jump in stakeholder influence since the study’s inception in 2007, as investors put ever greater pressure on businesses to map the risks and understand the opportunity presented by the transition to a 1.5°C net-zero world.
“The Sustainable Development Goals and the Paris Agreement commitments offer the clearest roadmap for how business should lead on climate and the innovation required to solve the world’s greatest challenges. But with only a narrow window of time left to meet these goals, and with the physical effects of climate change being felt sooner than most CEOs expected, leaders must stand up and be held accountable for measurable performance,” said Peter Lacy, Accenture’s global Sustainability Services lead, chief responsibility officer and member of the Global Management Committee. “The science, economics and data tell us that when leaders bridge business value with sustainability and technology impact, competitive advantage can thrive.”
The UN Global Compact-Accenture study highlights efforts from leading CEOs to increase their sustainability budgets, diversify their operations and workforces, and accelerate R&D in climate-resilient solutions, driving higher standards of accountability and showing what is possible when ambition meets action on climate. Though nearly two-thirds (65%) of leaders are already advancing new net-zero business models and solutions to meet their goals, only 16% of all CEOs said their maturity is at an advanced stage today.
“CEOs used to say that the relevant technologies were too nascent. Well, they’re now mature. Or they would say that investors and capital markets were not fully on board with ESG data. But they are now. What we simply don’t have more of now is time. Governments must act, and CEOs are ready to step up. This is not just the right thing to do — there is real business value at stake as well,” added Lacy.
The upcoming COP26 meeting presents a pivotal moment for change in sustainability. With business leaders cautiously optimistic on international cooperation to solve the climate crisis, they are highlighting five critical asks for negotiators to help them take bolder action and deliver on the goals of the Paris Agreement commitments. They are:
1. Align Nationally Determined Contributions (NDCs) to a 1.5°C warming trajectory
2. Enhance global cooperation on carbon pricing mechanisms aligned with the Paris Agreement
3. Meet and exceed the USD 100 billion commitment in climate financing for the Global South
4. Establish common standards for biodiversity protection and pathways for nature-based solutions
5. Increase business engagement in climate policy formation for collaborative climate action
“Confronting a triple planetary emergency — a climate crisis, a biodiversity crisis and a pollution crisis — everyone needs to scale up our ambitions and speed up our actions. The private sector has a special responsibility in our collective effort to build a sustainable, net zero, resilient and equitable world, and to act on pledges with credible timelines, targets, and plans. We have what it takes to realize the promise of the 2030 Agenda and the Paris Climate Agreement — but it will take the full commitment of every one of us,” concluded United Nations Deputy Secretary-General Amina J. Mohammed.