Our fifth annual survey on sustainability suggests that climate change has yet to become a very urgent issue for most companies — and that only a minority of companies are preparing for its effects.
Corporate adoption of sustainable business practices is essential to a strong market environment and an enduring society. What does it mean to become a sustainable business and what steps must leaders take to integrate sustainability into their organization?
Typhoon Saomai swirls in the Pacific Ocean east of Taiwan and the Philippines.
Within the scientific community, climate change is increasingly seen as one of the most important long-term issues facing humanity. The Intergovernmental Panel on Climate Change, an international scientific group recognized as an authority on climate change and its risks, wrote in a recent draft of a forthcoming report that human activity has almost certainly caused average global temperatures to increase during the second half of the twentieth century and that sea levels could rise by as much as three feet by the end of this century.1
In light of grave scientific concern with climate change — and its likely effects on the planet and on economic activity — how are managers thinking about this issue?
Few studies have explored how managers are thinking about the connection between climate change and their businesses. In the fifth annual global executive survey about sustainability and innovation conducted by MIT Sloan Management Review and the Boston Consulting Group in June 2013, more than 1,800 managers from a wide variety of industries and countries offered their views on how sustainability is influencing their corporate strategies, including approaches to climate change.
Some of the results, presented here, indicate that climate change has yet to become a very urgent issue for most companies and that only about one-third believe they are prepared for climate-change-related impacts. In an upcoming report (due out in the fourth quarter of 2013), we will discuss these results in greater detail, along with additional survey findings about how sustainability is influencing corporate strategies.
NOTE: Percentages may not add up to 100 due to rounding and, for some questions, not including those who responded “do not know.”
Few Companies View Climate Change as Very Urgent
When asked, fewer than 10% of managers responded that they believe climate change is very urgent, and only 15% said that it is quite urgent for their company. More than half considered it slightly or not at all urgent.
A Minority of Managers Believe Their Companies Are Prepared
When asked, only 9% of managers responded that they strongly believe — and 25% that they somewhat believe — that the company where they work is prepared for climate change risks. Thirty percent responded that they neither agreed nor disagreed that their company is prepared.
A Sense of Urgency Is Associated with Greater Preparation
A majority of the survey respondents who believe climate change is a very or quite urgent issue for their companies also believe their organizations are at least somewhat prepared for climate change. The less urgent climate change is for a company, the less prepared the organization is likely to be for its effects.
A Link Between Measurement and Climate Change Views
Companies that measure their effectiveness on environmental issues — such as waste management and energy efficiency — are more likely to consider climate change an urgent issue.
Business Model Change and Climate Change
The more that climate change is perceived as urgent by a company, the more likely survey respondents are to report that the company has changed its business model in response to sustainability issues.
Climate Change and the Sustainability Business Case
The more that climate change is perceived as urgent by a company, the more likely survey respondents are to report that the company has successfully developed a business case for sustainability.
About the Authors
David Kiron is executive editor of MIT Sloan Management Review’s Big Ideas initiatives, and Nina Kruschwitz is the managing editor and special projects manager at MIT Sloan Management Review. Knut Haanaes is senior partner and managing director at the Boston Consulting Group’s Geneva office and global leader of BCG’s strategy practice area. Sonja-Katrin Fuisz-Kehrbach is a project leader at BCG and core member of BCG’s sustainability team.
References
1. J. Gillis, “Climate Panel Cites Near Certainty on Warming,” New York Times, Aug. 19, 2013.
