In a critical year for action to prevent runaway climate change, one would hope the issue would rank high on chief executives’ list of business risks to worry about.
So it comes as a shock to discover that climate change appears so low on their list of concerns that professional services group PricewaterhouseCoopers did not even bother to include it in its global survey of business leaders.
PwC’s 18th annual global CEO survey, released Tuesday to coincide with the opening of the World Economic Forum in Davos, failed to even ask 1,322 business leaders about their global warming concerns after only 10% registered concern the previous year.
A spokeswoman for PwC said that climate change did not make it into the top 19 risks CEOs were questioned about because of their lack of interest in the subject.
At a time when sustainability experts are calling for tougher regulation to drive climate action, the PwC survey shows that overregulation leads the list of CEOs’ perceived risks, with 78% saying it threatens their organisation’s growth prospects.
This level of concern is the highest ever seen in the survey and up six points from last year. Countries where concern about overregulation is highest include Argentina (98%), Venezuela (96%), the US (90%), Germany (90%), the UK (87%) and China (85%).
Other high-priority risks include the lack of key skills in the talent pool, government responses to fiscal deficit and debt burden, geopolitical uncertainty, cyber security and social instability.
More evidence that CEOs are not engaged on climate change comes from the responses to a question about their top priorities for government. Only 6% of respondents listed reducing the risk of climate change as a priority, putting it at the bottom of the list.
What CEOs most want from politicians is to maintain a competitive and efficient tax system, a priority cited by two-thirds of those surveyed, followed by access to a skilled workforce, physical infrastructure, affordable capital and digital infrastructure.
Unfortunately, the bad news does not end there. When CEOs were asked about the changes they are seeing in international policies and regulations, collaboration between governments and businesses to mitigating climate change risks more effectively again ended up on the very bottom of the list. Nearly half said collaboration was not improving, with less than a third seeing an improvement.
These survey results suggest that beyond the very few progressive companies that are taking the risks of climate change seriously, the majority are failing to register the magnitude of the problem. It seems that CEOs are so overwhelmed by short-term fears that they are failing to look further ahead.
What they care most about is meeting their short-term growth targets: according to the survey, CEOs are less optimistic about global growth prospects than a year ago, with just over a third expecting global economic growth to improve in 2015, down from 44% last year. Significantly, 17% of CEOs – more than twice as many as a year ago – believe global economic growth will decline.
The survey highlights just how little CEOs understand climate change and the impacts it will have for generations to come. Unless action is taken now, it will be impossible to keep within the global goal of a 2C temperature rise (pdf) to prevent irreversible climate change.
While optimism abounded during the climate change talks in New York last year, business hardly had any presence at the annual UN climate change conference in Lima, Peru, in December.
The meeting at Davos this week will include a number of sustainability-related events, and it would be wise for participants to reflect on whether they are making as much progress as they had hoped – and how to do more.
The truth is that politicians will fail to act decisively on climate issues unless they are confident that enough companies are prepared to support their stand.
Unless we see a sea change in the global business community’s involvement in fighting climate change, corporations will continue to be seen as part of the problem rather than the solution – and consumers’ trust that companies will do the right thing will fade even further.
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