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As climate change continues to be a pressing global issue, businesses are recognizing the need to prioritize managing climate risks. This involves identifying and assessing the potential impacts of climate change on their operations and supply chains, as well as implementing strategies to mitigate these risks. Companies that proactively address climate risks can not only avoid potential financial losses but also gain a competitive advantage by demonstrating their commitment to sustainability and climate action. With climate change affecting all aspects of society and the economy, managing climate risk has become a crucial priority for businesses of all sizes and industries.
According to PwC’s 26th Annual Global CEO Survey, climate risk did not feature as prominently as a short-term risk over the next 12-months, relative to other global risks. CEOs still see climate risk impacting their cost profiles, supply chains and physical assets from a moderate to very large extent. CEOs in China feel particularly exposed, with 65% seeing the potential for impacting their cost profiles, 71% to supply chains, and 56% to physical assets. Recognising the impact climate change will have on business and society over the long-term, most CEOs have already implemented, or they are in the process of implementing initiatives to reduce their companies’ emissions, in addition to innovating new, climate-friendly products and processes, or developing data-driven, enterprise-level strategy for reducing emissions and mitigating climate risks. Despite an increasing number of countries now having some form of carbon pricing, most respondents of the 26th Annual Global CEO Survey still do not plan to apply an internal price on carbon in decision-making, and 36% of them don’t plan to implement initiatives to protect their company’s physical assets or workforce from the impact of climate risk.
The 2022 PwC Asia Pacific CEO Survey reveals that CEOs in the APAC region are increasingly partnering with non-business entities to tackle key sustainability issues such as sustainable development, diversity, equity, and inclusion (DE&I), and climate change. According to the survey, 92% of Asia Pacific CEOs believe that addressing environmental, social, and governance (ESG) issues is essential to achieving long-term success. To achieve their ESG goals, CEOs are partnering with a diverse range of stakeholders including governments, NGOs, academia, and other businesses. 52% of surveyed CEOs are collaborating with NGOs to address environmental issues, while 46% are partnering with governments to drive sustainability initiatives. Additionally, 38% of CEOs are working with academia to support research and development in sustainable technologies.
Nishan Mendis the Chief Information Officer, Technology Consulting Leader and NetZero Leader for PwC Sri Lanka and Maldives stated “We, at PwC Sri Lanka are encouraged to see the results of the PwC Asia Pacific CEO Survey and the recognition from CEOs that addressing ESG issues is essential for long-term success. These partnerships can be a catalyst for innovative solutions that drive sustainable growth and contribute to positive social and environmental impact. At PwC, we remain steadfast in our dedication to taking decisive action towards addressing Environmental, Social, and Governance (ESG) concerns. We strongly believe in fostering collaboration with our stakeholders as we work towards our shared objective of achieving a Net Zero future. In doing so, we aim to support our clients in their efforts to achieve their sustainability goals, and ultimately create a better future for all.
The survey also highlights the importance of DE&I, with 80% of Asia Pacific CEOs saying that they have taken action to improve diversity and inclusion within their organizations. To support these efforts, 48% of CEOs are partnering with NGOs and 44% are collaborating with governments to drive DE&I initiatives. Overall, the survey demonstrates that Asia Pacific CEOs recognize the importance of addressing ESG issues and are acting through partnerships with a wide range of stakeholders. By working together, businesses and non-business entities can create sustainable solutions that benefit society, the economy, and the environment.
Oracle Consulting Leader, PwC Sri Lanka
Tel: +94 11 7719838 ext.4001