Nearly one-third of CEOs believe the climate crisis will force major changes to their company operations in the near future.
While almost half don’t see their business as viable in a decade, again partly due to climate pressures.
However, many see the climate transition providing distinct opportunities as well as risks.
These are the findings of PwC’s Annual Global CEO Survey, which interviewed 4,702 CEOs across 105 countries and territories.
The good news is that 38% of CEOs are optimistic about economic growth over the next year, up from 18% in 2023.
However, confidence remain fragile as megatrends – including technological disruption and the climate change – persist.
Nearly one-third expect climate change to shift the way they create, deliver and capture value over the next three years – up from less than a quarter who said as much about the past five years.
The report also confirms that CEOs are making progress in turning their commitments into action.
76% have either begun or completed steps to improve energy efficiency, while 58% have introduced more ‘climate-friendly’ products, services or technologies.
On the other hand, only 45% note having made progress on or completed incorporating climate risk into financial planning (with 31% noting no plans to do so).
Action on adaptation to physical climate risks is also lagging at 47% (with 29% noting no plans to act).
Alarmingly, these findings suggest that many business leaders don’t yet fully understand the implications of climate-related risk or include them in strategy planning.
The survey also suggests significant support for decarbonisation, with only 26% saying that a lack of board or management buy-in is at least a moderate barrier to decarbonisation.
CEOs cite regulatory complexity (54%) and lower economic returns for climate friendly investments (51%) as the biggest barriers to be overcome. CEOs are beginning to take on the economic barrier, with four in ten reporting that they have accepted lower hurdle rates for climate-friendly investments than for other investments—in most cases between one and four percentage points lower.
The regulatory environment is cited as particularly challenging, holding companies back from reinventing their business model to at least a ‘moderate’ extent.
The full findings can be accessed on pwc.com/ceosurvey, and interviews can be found at strategy-business.com/inside-the-mind-of-the-ceo.
