Professional Documents
Culture Documents
Accenture UNGC CEO Study Sustainability 2021
Accenture UNGC CEO Study Sustainability 2021
CLIMATE
LEADERSHIP IN THE
ELEVENTH HOUR
The 2021 United Nations Global Compact–Accenture
CEO Study on Sustainability
CONTENTS
CEO STUDY ON SUSTAINABILITY
CLIMATE LEADERSHIP
IN THE ELEVENTH HOUR Introduction 4
One-to-One Interviews 6
Special Edition
Breaking Point: Climate Change Is Here and Now 10
In this Special Edition of the CEO Study, the
world’s largest program of CEO research
on sustainability, 1,232 CEOs across 113 COP26: A Wake-Up Call for Global Climate Action 24
countries and 21 industries deliver their
authentic, unfiltered perspectives on the
private sector’s contribution to climate action. Blueprint for Business: Turning the Dials on Climate
Adaptation and Resilience 30
CEOs call for urgent action from
Governments and policymakers as the
impacts of climate change increasingly Technology Will Deliver the Next Frontier of Climate Action 42
disrupt the global economy and livelihoods
of the most vulnerable communities; expand
collaboration on adaptation and resilience Special Focus: Creating a New Climate Economy with
solutions; accelerated progress on technology the Global South 48
and innovation; the need to ensure a just and
equitable transition; and critical steps needed
at COP26 in Glasgow to unlock the potential New Measures of Competitive Advantage:
of the private sector. Leadership for the Eleventh Hour 54
November 2021
The Road to 2030: Business Asks of Policymakers 62
The inclusion of company names and/or examples in this publication is intended strictly for learning purposes and does not constitute an
endorsement of the individual companies by the UN Global Compact or Accenture.
INTRODUCTION
This year marks the third United Nations Global opportunities of the COVID-19 pandemic to
Compact-Accenture CEO Study Special Edition. As adaptation and resilience-building actions to
the latest milestone in over a decade of research, climate finance priorities — for business.
the 2021 CEO Study Special Edition draws on
insights from over 1,232 CEOs across What gives us hope is that some leading CEOs
21 industries and 113 countries, including over are showing the way forward and making real
110 in-depth interviews. progress. They are developing innovative business
models enabled by technology, aligning their
As we approach 2030 with roughly 2,000 working climate targets to science-based pathways, and
days to achieve the Global Goals, we are on the driving partnerships with their communities, value
precipice of catastrophe. Our 2019 CEO Study chain partners, and the public sector.
found that business leaders were severely off
track to deliver on their climate goals. Today, the Yet, this is not nearly enough.
picture is even bleaker. Business leaders are facing
an intense landscape, as climate-related disasters In compiling this CEO Study, we are once again
occur with startlingly high frequency and intensity. indebted to the UN Global Compact teams led by
The pressure to act on sustainability from all Heidi Huusko, Anna Kruip and Sean Cruse. We also
stakeholders is greater than it has ever been. recognize the leadership of the Accenture team,
Global supply chains are fracturing, and inequality in particular: UN programs lead Michael Hughes;
continues to rise. Couple this with the fallout from study lead Apurv Gupta; and authors Grant Lurie,
the COVID-19 pandemic, and many businesses are Noah Spector, Daisy Vanags and Fergal Keaney.
ill-prepared for the coming reality. We also thank Matthew Robinson, Justin Keeble,
Mauricio Bermudez, Barbara Wynne and Sundeep
In the largest and most powerful global Singh for their insights, as well as the many other
self-assessment ever voiced from CEOs on UNGC and Accenture colleagues who are too
sustainability, this year’s study finds that CEOs numerous to mention, but who contributed to
widely believe that business is unprepared to this report.
navigate the challenges of climate change. These
same CEOs give an equally stark call to action On behalf of the United Nations Global Compact
for their industries to step up, align themselves and Accenture, we would like to express our
with the Paris Agreement, and respond with sincere thanks to the CEOs and chairpersons,
decisive action to avert global catastrophe. In this business leaders and other stakeholders who
report, we share the feedback from CEOs on both participated in the study. The project team has
their assessment of the challenge, but also their endeavored to understand and interpret their
suggestions for what needs to be done at all levels many ideas, reflections and case study examples
to meet the goals of the Paris Agreement. in conducting the study and delivering this report.
Maurici Lucena, Michael Rousseau, Henri Poupart-Lafarge, Luis Maroto, Jean Jereissati, Carsten Egeriis, Francesca Fondse, Christian Sewing, Satyo Fatwan, Toni Hambali,
Chairman and CEO, President and CEO, CEO and Chairman of the Board, President & CEO, CEO, Chief Executive Officer, CEO, De Angelus Estates and CEO, Managing Partner, Chief Executive Officer,
Aena Air Canada Alstom Amadeus IT Group S.A. Ambev Danske Bank Angelus Africa SD Projects Deutsche Bank AG Dunamis Organization Services Dynapack Asia
Peter Zaffino, Mark Cutifani, Praveen Singhavi, Peter Oosterveer, Clara Arpa, Miguel Stilwell d’Andrade, Francesco Starace, Claudio Descalzi, Börje Ekholm, Marjorie Yang,
President and Chief Executive Officer, Chief Executive, President, Chief Executive Officer, CEO, CEO, Chief Executive Officer and General Chief Executive Officer, President and CEO, Chairman & CEO,
American International Group Anglo American Plc APRIL Group Arcadis N.V. ARPA EDP and EDP Renewables Manager, Enel Group Eni Ericsson Esquel Group
Atsushi Katsuki, Bernard Tan, Kenji Yasukawa, Thomas Buberl, Lorenzo Simonelli, Chairman, President, Mairead Lavery, Margaret Michaels, M V Iyer, Héctor Hernández-Pons Torres, Andreas Shiamishis,
President & CEO, Representative Managing Director, Asia Pulp & Paper Ph.D., President & CEO, Chief Executive Officer (CEO), and Chief Executive Officer, Baker President and Chief Executive Officer, Founder, Board Member and Director of Business Chairman of the Board and Chief Chief Executive Officer,
Director, Asahi Group Holdings, Ltd. (APP) Sinar Mas Astellas Pharma Inc. AXA Group Hughes Export Development Canada Ezra Joel Group Corporation Development, Executive Officer, Grupo Herdez Hellenic Petroleum SA
GAIL (India) Limited
Fausto Ribeiro, Carlos Torres Vila, Mirko Bibic, Bertrand Schmitt, Michel Vounatsos, Philipp Gmür, Toshiaki Higashihara, Ignacio S. Galán, Aloke Lohia, Alex Gorsky,
CEO, Chairman, President and CEO, CEO, Chief Executive Officer, CEO, Executive Chairman & CEO, Chairman & CEO, Group Chief Executive Officer, Chairman and CEO,
Banco do Brasil BBVA BCE & Bell Canada BDR Thermea Group Biogen Inc. Helvetia Group Hitachi, Ltd. Iberdrola Indorama Ventures Public Company Ltd. Johnson & Johnson
Roberto Simões, T. Taubie Motlhabane, Cyrille Vigneron, Chuck Robbins, Sherman Kwek,
George Oliver, Jeremy Cohen, Mohammed Kodrey, Shoei Yamana, Antoine Arnault,
CEO, Chief Executive Officer, President and CEO, Chair and CEO, Group CEO, President and CEO, Image & Environment, LVMH,
Chairman & CEO, President and CEO, CEO,
Braskem Cape Town International Cartier International Cisco City Developments Ltd. Konica Minolta Member of the LVMH Board, CEO
Johnson Controls Knoll Printing & Packaging, Inc. Kodrey Overseas Agents
Convention Centre of Berluti,
LVMH
6 7
Derek Hydon, Anish Shah, Dr. (HC) Martha Tilaar, Surya Paloh, Florent Menegaux, Douglas L. Peterson, Christian Klein, Ryuichi Isaka, President & Eric Rondolat, Denis Machuel,
President, Managing Director and CEO, Founder and Chairwoman, Martha Chairman and Founder, CEO, President and CEO, CEO and Member of the Representative Director, CEO, Ex-CEO,
Ma Cher (USA) Inc. Mahindra & Mahindra Ltd. Tilaar Group Media Group Michelin S&P Global Executive Board, SAP SE Seven & i Holdings Co., Ltd. Signify Sodexo
Susan Lloyd-Hurwitz, Hironori Kamezawa, Rob Fauber, John Pettigrew, Roberto Marques, Ken Miyauchi, Representative Alistair Phillips-Davies, James M. Loree, Annica Bresky, Keiichi Iwata,
CEO & Managing Director, President & Group CEO, Mitsubishi President and Chief Executive Officer, CEO, Executive Chairman and Group CEO, Director and Chairman, Chief Executive, Chief Executive Officer, President and CEO, Representative Director & President,
Mirvac UFJ Financial Group, Inc. Moody’s National Grid Natura &Co SoftBank Corporation SSE Stanley Black & Decker Stora Enso Sumitomo Chemical Company, Ltd.
Mark Schneider, Shinichi Odo, Representative Hiroaki Shinya, Pekka Lundmark, Hilde Merete Aasheim, Takeshi Niinami, T.V. Narendran, Sigve Brekke, Manon van Beek, Alain Dehaze,
CEO, Director Chairman of the Board, Representative Director and President, President and CEO, President & CEO, Chief Executive Officer, CEO & Managing Director, President & Chief Executive Officer CEO, Chief Executive Officer,
Nestlé SA NGK SPARK PLUG CO., Ltd. Nippon Koei Co., Ltd. Nokia Norsk Hydro ASA Suntory Holdings Ltd. Tata Steel Ltd. Telenor Group TenneT TSO B.V. The Adecco Group
Sawsan Wazzan Jabri MSc., Subhash Kumar, Chairman, Alexandre Ricard, Gimena Peña Malcampo, Christos Megalou, David Briggs, Dimitri Papalexopoulos, Chairman Toshiki Kawai, Debbie Crosbie, Suni P. Harford,
LD., Co-Owner, General Manager, ONGC Group of Companies, Chairman and CEO, CEO, Chief Executive Officer, CEO, of the Group Executive Committee, Representative Director, President CEO, Group Executive Board Sponsor
Chief Dietitian, President of UNGC Network India Pernod Ricard Pier2 Marketing Piraeus Bank Group The VELUX Group TITAN Cement Company & CEO, Tokyo Electron Ltd. TSB Bank for Sustainability and Impact,
Nutrition and Diet Center Lebanon UBS
Marco Tronchetti Provera, Ken Crichton, Vidjongtius, Noke Kiroyan, Kongkrapan Intarajang, Dr. GD Singh, Alan Jope, Aayush Tekriwal, Roy Bagattini,
Anna Borg,
Executive Vice Chairman and CEO, President Director, President Director, Executive Chairman, CEO, Founder & President, CEO, Managing Director, Group Chief Executive Officer,
President and CEO,
Pirelli & C. SpA PT Archi Indonesia Tbk PT Kalbe Farma Tbk PT Komunikasi Kinerja PTT Global Chemical Plc. Unified Brainz Virtuoso Ltd. Unilever Van Aroma Woolworths Holdings Ltd.
Vattenfall
(Kiroyan Partners)
Soraya Narfeldt, Ben van Beurden, Joost Farwerck, Frans van Houten, Masaaki KANAI
CEO, CEO, CEO & Chairman of the Board of CEO, Chairman & Representative Director,
RA International Royal Dutch Shell plc Management, Royal Philips Ryohin Keikaku Co., Ltd.
Royal KPN N.V.
8 9
BREAKING POINT
CLIMATE CHANGE
IS HERE AND NOW
1. Based on the definition provided by the OECD, small and medium-sized enterprises (SMEs) are non-subsidiary, independent firms that
employ fewer than 250 employees (OECD). 2. Munich RE (2021) Record Hurricane Season and Major Wildfires – The Natural Disaster Figures
12 for 2020. 13
Which of the following do you see as major risks to your business or industry due to the How mature do you believe your company is across the following climate resilience and
physical impacts of climate change? adaptation actions?
TOP 3 RISKS BY REGION EARLY WARNING SYSTEMS FOR PREPAREDNESS TO CLIMATE-RISK EVENTS
1 2 3
Overall
Africa
Asia
Latin America
Europe
North America
KEY
Operating challenges due to physical impacts on assets (e.g., heat waves, storm surges)
Widening social inequalities across the workforce Advanced Intermediate Basic Not started Other
14 “Other” indicates respondents who answered ‘“do not know” or “not applicable.” Percentages may not add to 100% due to rounding. 15
Case Study
THE COVID-19 PANDEMIC HAS says, “through the development of COVID-19 With unprecedented levels of economic PTT GLOBAL CHEMICAL (PTTGC)
UNDERSCORED THE IMPORTANCE vaccines, we have seen how fast we can work recovery spending, the opportunity for
OF SUSTAINABILITY, BUT ADDED when needed. We can use that as inspiration greater collaboration and investment Sustainable Production and
COMPLEXITY TO A CONCERTED for climate action.” allocation has never been greater. In 2020, Consumption to Tackle the
CLIMATE RESPONSE, SAY CEOS Governments and central banks used fiscal Coronavirus Pandemic
For half of CEOs globally (50%), the and monetary policies to provide more than
Nearly, three in four CEOs globally (72%) COVID-19 pandemic has increased their USD 19 trillion of funding.4 To recover better PTT Global Chemical Plc. or GC, a Thai
agree that sustainability remains an reliance on strategic, multi-sectoral from the pandemic, CEOs are calling upon petrochemical company, has developed
immediate priority as they deal with the partnerships — a shift most notably observed Governments to speed the distribution of YOUturn Platform to manage post-consumer
among CEOs of companies with more than money to enable the private sector to invest plastics and create upcycled products. Its
fallout of the COVID-19 pandemic. Francesca
USD 250 million in annual revenues (58%). in recovery and resilience for systemic socio- goal is to reduce discarded single-use plastics
Fondse, CEO of De Angelus Estates and
In the words of Francesco Starace, Chief economic transformation and scale that goes into landfills and provide low-carbon
Angelus Africa SD Projects, remarks, “the
production materials.
pandemic has accelerated our sustainability Executive Officer and General Manager of a just transition aligned with a 1.5°C
progress by giving us the space to learn the Enel Group, “the pandemic reinforced warming trajectory.
In collaboration with cross-sector
how to work digitally and to explore new that change is possible when governance is
organizations, the end-to-end waste
sustainable innovations.” coordinated and reinforced at a global level. Getting business and Government on the management initiative enables users to find
Strong multilateralism is critical during a same page is critical to capitalizing on local YOUturn drop points to recycle plastic
Moreover, nearly four in five CEOs (79%) say global crisis, and these lessons must be this moment of renewed conviction and to waste. A digital system is being deployed to
that the pandemic has highlighted the need applied to climate action.” address climate action. As Sue Y. Nabi, Chief process collection data, offering material
to transition to more sustainable business Executive Officer of Coty, explains, “given the traceability for recycled plastic resins for
models. George Oliver, Chairman & CEO Over half (57%) of CEOs are prioritizing intricacies of the green transition, it is now brand owners.
of Johnson Controls, notes, “I would have climate action in their recovery from the critical that actors take a collective approach
predicted that a crisis like COVID would COVID-19 pandemic, but only 18% of CEOs in setting common climate goals, and share Since 2017, GC has recycled 880,000
have slammed the brakes on anything other feel Governments and policymakers have the knowledge needed to deliver against kilograms of post-consumer plastics,
than conventional bottom-line thinking — given them the clarity needed to them. We need to foster an environment equivalent to 2.15 million kilograms of CO2
and the fact that it did the exact opposite recover from the pandemic in line with where national actors and businesses emissions reduction, saving over 238,500
is extraordinary. It has accelerated the a 1.5°C Pathway. collaborate to tackle this great challenge.” big trees. Recently, the ongoing coronavirus
trajectory of sustainability.” pandemic has increased the consumption of
single-use personal protective equipment
In addition, the pandemic has highlighted the (PPE) dramatically, with nearly 3.4 billion face
importance of multi-sectoral partnerships, masks and face shields discarded daily.3 This
rapid R&D, and coordinated deployment waste does not biodegrade and the debris
from landfills pollutes natural habitats.
of critical solutions to address global
In response to this, YOUturn Platform
challenges. Kim Fausing, CEO of Danfoss,
and partners have launched a PET bottle
collecting campaign and upcycled
4,000 sets of reusable PPE to distribute
“The experiences of the pandemic are “As the pressure to act on climate change
promising a brighter future for climate action became critical, the coronavirus pandemic in Thailand.
and sustainability as the conviction to tackle occurred and further drove commitment
global issues has strengthened.” from those who had been reluctant to act on GC’s YOUturn Platform is proving core to
sustainability. This produced a consensus its business model with greater reliance
Maurici Lucena, among nations that this needs to be a on recycled materials, reusable PPE and
Chairman and CEO, Aena collaborative effort.” decoupling growth from virgin plastics.
Takeshi Niinami,
CEO, Suntory Holdings Ltd. 3. Benson et al (2021) COVID pollution: impact of COVID-19
pandemic on global plastic waste footprint. 4. Accenture (2021)
16 Fueling Recovery. 17
17
THE STABILITY OF INTERNATIONAL are particularly concerned about the rising FIGURE 4: GLOBAL INSTABILITY IS IMPEDING SUSTAINABILITY
COOPERATION WILL BE CRITICAL TO number of populist movements across
MANAGE THE ESCALATING CLIMATE To what extent do you agree the following issues are barriers to sustainability in your industry?
countries, while 48% of CEOs in Africa
CRISIS, SAY CEOS and 49% of CEOs in Asia cite threats to
globalization as a barrier to sustainability for
their industries. Margaret Michaels, Founder
Nearly half of CEOs globally (46%) are of Ezra Joel Group Corporation, explains,
confronting uncertainty in their industry “unlocking sustainable development in Africa
stemming from national trade wars; 37% requires collaboration between the public NATIONAL TRADE WARS AND ENSUING BUSINESS UNCERTAINTY
are facing uncertainty from an increasing and private sectors to address regional
number of populist movements; and 40% instability and insecurity.” Europe
say they are facing uncertainty from threats
to globalization and the movement of goods CEOs are concerned about the readiness of a 22%
29% MENA Asia
North America
and services. According to Hilde Merete truly global climate response, which even in 17% 12%
Aasheim, President & CEO of Norsk Hydro this eleventh hour of crisis remains disjointed, 28% 14%
ASA, “regionalism, protectionism, and trade and at times contradictory, across industries 42%
29% 33%
barriers put the decarbonization agenda and sectors. In the words of Carlos Torres
at risk.” Vila, Chairman of BBVA, “global collective 49% Africa 47%
53%
feeling geopolitical instability the most. weakened confidence in the state of Oceania
14%
Nearly half of CEOs in Latin America (47%) international cooperation.” 22% 32%
27%
52%
46%
FIGURE 3: CEOS FROM AROUND THE WORLD DO NOT BELIEVE GOVERNMENTS HAVE GIVEN THEM
46%
THE CLARITY TO RECOVER IN LINE WITH A 1.5°C WARMING TRAJECTORY
As CEO, to what extent do you agree Governments and policymakers have given business the
clarity needed to recover better in line with a 1.5°C warming trajectory?
future sustainability efforts. This is up 46% of CEOs in the oil and gas industry and
from nearly one in five CEOs (18%) in 2016, 42% in the basic resources industry cite Employees
ranking them from eighth in 2016 up to third investors as a key influence on sustainability 43% 2 2 35%
change operational models overnight, why models is the only way forward.”
Food & Beverage 11% 28% 42% 15% 4%
can’t we do the same for sustainability?
The truth is we can, we just need greater Banks 30% 40% 10% 20%
urgency,” says Gimena Peña Malcampo, Technology 32% 23% 23% 9% 14%
CEO of Pier2 Marketing.
Diversified 31% 29% 17% 10% 13%
Globally, 81% of CEOs are already developing Automobiles & Parts 24% 29% 24% 10%
new products and services leveraging
Race To Zero Campaign Telecommunications 24% 35% 18% 18% 6%
electrification, sustainable materials and
circular design. One in four CEOs globally Basic Resources 19% 42% 14% 8% 17%
Race To Zero is a global campaign to rally
(24%) are prioritizing short-term investments
leadership and support from businesses, Utilities 30% 35% 9% 22% 4%
in new sustainable product development. In
cities, regions and investors for a healthy,
addition, 69% of CEOs globally are investing resilient, zero-carbon recovery that
Travel & Leisure 20% 30% 23% 13% 13%
in resilient and sustainable manufacturing prevents future threats, creates decent Retail 24% 24% 24% 19% 10%
and design. Notably, 86% of CEOs in the jobs and unlocks inclusive, sustainable Financial Services 22% 20% 28% 13% 17%
automobiles and parts industry — one of the growth.6 Globally, 39% of CEOs say they
largest manufacturing industries globally — have committed to the Race To Zero or Industrial Goods & Services 20% 25% 25% 12% 17%
are investing in sustainable manufacturing. will commit by COP26. Moreover, 48% of 22% 17% 30% 13% 17%
Oil & Gas
Marco Tronchetti Provera, Executive Vice CEOs from the largest companies (greater
Chairman and CEO of Pirelli & C. SpA, says, than USD 1 billion in annual revenue) say Construction & Materials 23% 23% 23% 19% 13%
“we have to operate in line not only with the same. Health Care 21% 21% 24% 18% 15%
the requirements of today, but with the
Media 40% 15% 10% 15% 20%
requirements of tomorrow — all our new
products have to be sustainable for the Real Estate 17% 25% 21% 25% 13%
next decades.”
Insurance 30% 20% 20% 30%
22 6. Race To Zero (2021) Race To Zero Campaign. “Other” indicates respondents who answered “do not know” or “not applicable.” Percentages may not add to 100% due to rounding. 23
COP26
A WAKE-UP CALL
FOR GLOBAL
CLIMATE ACTION
arena. With these, everyone can be measured “climate change and harmful effects on 28% Target not
recognized
MOST COMPANIES ARE YET TO SET SCIENCE
not only against themselves, but against biodiversity are existential threats to the BASED TARGETS
by SBTi
OR
others.” whole world and the future of mankind.” 11% no target
efforts to restrict global temperature rise to
1.5o C, only nine (2%) have an approved target
Ecosystem preservation is a critical
Disagree Neither agree nor disagree Agree
component of climate mitigation and
business protection. Yet, globally, CEOs
Sufficient efforts are being made in my company to restrict global Percentages may not add to 100%, as charts do not reflect
temperature rise to less than 1.5°C. respondents who selected “do not know.”
7. Science-Based Target Initiative (2020): Annual Progress Report. 8. Ibid. 9. Science Based Target Initiative (2020) Annual Progress 11. World Wildlife (2021) A Warning Sign: Where Biodiversity Loss is Happening Around the World. 12. The Science Based Targets
26 Report. 10. IUCN (2017) Tomorrow’s Production Systems Will Be Closer to Nature. Network (2021). 27
Case Study
31
Agricultural scientist working in farm. Photo: Accenture
THE CLIMATE CRISIS IS OUTPACING advancing net-zero business models and CEOS STRUGGLE TO MANAGE SCOPE Case Study
THE SPEED AT WHICH BUSINESS solutions, compared to 61% of CEOs of the 3 GHG EMISSIONS DUE TO OPAQUE
LEADERS ARE SHIFTING TO smallest companies (less than USD 25 VALUE CHAINS AND TRACEABILITY CISCO
NET-ZERO MODELS million in annual revenue). CHALLENGES
Reducing Scope 3 GHG Emissions
The shift to net-zero business models also Globally, CEOs are struggling to manage
with Partners Across the
The message from leading executives is
clear. CEOs who are not shifting to net-zero remains largely basic for companies in the their scope 3 GHG emissions: while 55% of Supply Chain
business models are putting their companies highest-emitting sectors. That is, 73% of CEOs have begun measuring and reporting
at risk. While 65% of CEOs globally say they these CEOs say they are advancing net-zero their scope 3 GHG emissions, only 16% of Cisco, the American networking company,
have already started advancing net-zero business models and solutions, yet 46% all CEOs do so at an advanced level. Debbie is working across its global supply chain to
of these companies are at a basic level of Crosbie, CEO of TSB Bank, says, “our biggest reduce its scope 3 GHG emissions — indirect
business models and solutions, almost half
maturity. Miguel Stilwell d’Andrade, CEO of emissions that are produced by a company’s
of these CEOs (45%) describe their efforts in challenge in transitioning to a zero-carbon
value chain — by 30% by 2030 (FY19 base
this area as only “basic.” EDP and EDP Renewables, underscores the economy is that the majority of our scope
year). It will continue to build on strategies
importance of ensuring all CEOs target net- 3 emissions come from the houses we lend
such as: utilizing more ocean shipments that
Companies with annual revenues in excess zero in their businesses. “When we talk about mortgages against.” are cheaper and produce less GHG emissions
of USD 1 billion are further along the net-zero, it’s global net-zero. All the different than air freight; redesigning product
journey. That is, 78% of CEOs of the largest regions and countries of the world need to CEOs say limited ESG data across the packaging to use more sustainable materials;
companies in the world say they have begun move to net-zero together.” value chain is a key barrier to progressing and implementing energy management
emissions management. Over half of CEOs techniques with manufacturing partners.
globally (63%) say that difficulty in measuring
ESG data across the value chain is a barrier Supply chain emissions often account for
to sustainability in their industry. As Derek a significant majority of scope 3 emissions.
Hydon, President of Ma Cher (USA) Inc., For example, electronics companies can
FIGURE 8: MAJORITY BUSINESS LEADERS HAVE BASIC MATURITY IN TRANSITIONING TO NET-ZERO relates, “transparency is the single biggest expect scope 3 emissions to account for
BUSINESS MODELS
challenge in supply chain development.” 77% of overall emissions and for fast-moving
How mature is your company on advancing net-zero business models and solutions? consumer goods (FMCG) companies this
This challenge is more pronounced for figure is 90%.16 To track supply chain-related
CEOs of companies with greater than USD 1 emissions, Cisco incentivizes suppliers to
billion in annual revenue: 48% of whom say report GHG data through the CDP Supply
that extending their broader sustainability Chain Program on an annual basis and has
strategy throughout the supply chain is a top for over 10 years. It drives accountability
11% barrier, compared to only 33% of CEOs of through supplier scorecards and other
Advanced 25%
companies with less than USD 25 million in sourcing processes.
Intermediate 30%
annual revenue. Ignacio S. Galán, Chairman
23% & CEO of Iberdrola, explains, “utilities, and
45%
companies overall, need to expand their “There is a lot we can do to reduce our scope
65% Basic
sustainability practices to their supply chain 3 emissions, and we have committed to
and providers, and we already are making this across our value chain. This includes
great progress on that front. It’s not that increasing product take-back and reuse,
reducing the need for emissions associated
easy to have full traceability of the carbon with new manufacturing, and continuously
footprint of our providers, but ultimately looking to lower power consumption across
we’re responsible for it.” our ecosystem.”
Chuck Robbins,
Chair and CEO of Cisco
16. BCG, WEF (2021) Net Zero Challenge: The Supply
32 Chain Opportunity. 33
FIGURE 9: BUSINESS MATURITY ON MEASURING AND REPORTING SCOPE 3 GHG EMISSIONS, CEOS ARE REIMAGINING THEIR Kim Fausing, CEO of Danfoss, outlines how
BY INDUSTRY OPERATIONS AND WORKFORCE this strategy generates both sustainability
How mature do you believe your company is across the following climate mitigation actions? TO BUILD RESILIENCE AGAINST and business value: “Localized sourcing and
Measuring and reporting scope 3 GHG emissions CLIMATE-RELATED EVENTS manufacturing enable a more sustainable
future by reducing transportation costs,
CEOs are diversifying their product and creating jobs, and preserving flexibility
workforce footprints to improve resilience throughout the
Basic Resources 32% 38% 9% 12% 9% and minimize the risk of climate-related supply chain.”
Utilities 36% 18% 18% 18% 9% events. Sixty-four percent of CEOs globally
are diversifying their material inputs in CEOs are also embracing circular product
Chemicals 16% 32% 22% 19% 11% products and operations and 63% have begun development to further diversify their material
Personal & Household Goods 19% 19% 31% 19% 12% geographically diversifying their workforce inputs and build resilience. Royal KPN N.V., for
and operations. However, companies have instance, found that its circularity program
Banks 37% 11% 21% 5% 26%
more room to develop, as only 12% and 22% advanced both its sustainability agenda and
Real Estate 18% 14% 36% 23% 9% have achieved advanced levels of maturity on allowed the company to protect its business
both fronts, respectively. from supply shocks. Joost Farwerck, CEO &
Telecommunications 35% 18% 12% 18% 18%
Chairman of the Board of Management, says,
Oil & Gas 22% 26% 13% 26% 13% Geographic diversification, in many instances, “our circularity programme is partially a hedge
Travel & Leisure 27% 17% 17% 40% means shifting to more local models of against material scarcity and geopolitical risks
production and consumption. to our supply chain. By collecting old equipment
Retail 10% 35% 10% 35% 10% from our customers, we can reduce our
Construction & Materials 9% 17% 28% 32% 15% dependency on foreign raw materials.”
Food & Beverage 10% 27% 16% 43% 4%
FIGURE 10: EXTENDING SUSTAINABILITY STRATEGY ACROSS THE SUPPLY CHAIN IS THE TOP
Automobiles & Parts 14% 14% 24% 38% 10%
BARRIER FOR COMPANIES AFTER CROSSING USD 25 MILLION IN ANNUAL REVENUE
Diversified 11% 13% 25% 28% 23% % Y-o-Y change 2021 2019
Priority < USD 25 MILLION USD 25 - 250 MILLION USD 250 MILLION – 1BILLION > USD 1BILLION
Alternative Energy 15% 22% 11% 30% 22%
Health Care 16% 19% 13% 38% 16% Extending strategy Extending strategy Extending strategy
Lack of financial
#1 -7% 55%
resources
+2% 39% throughout supply -7% 42% throughout supply +9% 48% throughout supply
chain chain chain
Media 18% 12% 41% 29%
34 “Other” indicates respondents who answered “do not know” or “not applicable.” Percentages may not add to 100% due to rounding. 35
CEOS FEEL THEY HAVE ONLY JUST FIGURE 11: GLOBAL MATURITY OF ADAPTATION AND RESILIENCE ACTIONS
BEGUN ADVANCING NATURE-
BASED SOLUTIONS TO BUILD MORE How mature do you believe your company is across the following climate adaptation
Climate Resilience and and resilience actions?
RESILIENT COMPANIES
Human Health
Extreme weather events not only imperil The United Nations Environment Programme
the flow of supply chains in vulnerable (UNEP) reports that nature-based solutions Earlywarning
Early warningsystems
systemsfor
forpreparedness
preparedness to
to climate-risk events 7% 19% 25% 27%
regions, but also pose a direct threat to are low-cost options that reduce climate
the safety as well as the physical and risks, restore and protect biodiversity, Forecast-based
Forecast-basedinvestment
investment planning
planning for climate-related risks 8% 18% 24% 29%
mental health of the workforce. “We and bring benefits for communities and
Nature based solutions
Nature-based solutions for
for disaster risk reduction 7% 18% 21% 27%
firmly believe that the health of the economies.19 While 46% of CEOs globally
planet is interconnected with the health have begun exploring nature-based solutions, Scenario
Scenarioanalysis
analysisto
to identify
identify physical
physical and transition risks 8% 20% 25% 28%
of people, businesses and the economy,” only 7% are utilizing them at an advanced
says Sherman Kwek, Group CEO of City level. The dual impact of nature-based Insurance
Insurance for climate-related risks
risks 9% 20% 23% 27%
Developments Limited. solutions as a mitigation tactic and as a lever
to build resilience against climate change Social
Social security
securitynets
nets to
to protect workforce from climate-induced
climate induced risks 10% 18% 23% 28%
Our research finds that CEOs are poses an invaluable investment opportunity,
R&Dinvestment
R&D investment dedicated
dedicated for climate
climate-resilient
resilient solutions
particularly concerned. 42% of CEOs say CEOs. As Alan Jope, CEO of Unilever, 12% 18% 21% 26%
globally see negative health impacts acknowledges, “we cannot solve the climate Diversification
Diversificationofofmaterial
materialinputs
inputs in
in products
products and operations 12% 25% 27% 12%
across the workforce as a major climate- issue or global inequality without nature-
related risk to their business and industry, based solutions.” Onsite energy generation capabilities
energy-generation 13% 19% 23% 23%
making it the second most selected risk
in our survey. Alex Gorsky, Chairman Few leading companies are maximizing Advocacy
Advocacyfor
forclimate
climateresilience
resilience and
and adaptation policies 15% 23% 27% 20%
and CEO of Johnson & Johnson, notes, the potential of biodiversity protection to
“the COVID-19 pandemic laid bare some Investing
Investingininworker
workerand
and union
union skills
skills development 16% 26% 26% 18%
advance net-zero business models. For
of the most significant issues faced not
instance, the Brazilian cosmetics company,
only by our business, but by the entire Designing
Designing resilience infrastructure 15% 22% 25% 18%
Natura — one of the four brands within the
world: health inequities, weaknesses in
global health security, and the need for
global beauty group Natura &Co — operates Redesigning
Redesigning product offerings 16% 23% 24% 15%
greater resilience in global supply chains.” an “Ekos” range with formulas made with
Notably, negative health impacts are pure bioactive compounds from the Amazon Geographically
Geographically diversified
diversified workforce
workforce and operations 22% 20% 21% 17%
the most selected climate-related risk rainforest. The model currently preserves Advanced Intermediate
among CEOs in the Middle East and North two million hectares of land in the Amazon, Basic
Advanced
Not started
Intermediate Basic Not started Other
Africa (54%). This is a region that climate an area equivalent to half of the Netherlands,
models predict will become drier in the and aims to preserve three million hectares
future, with a 20% decrease in freshwater by 2030. The company intends to expand its
availability by 2100.17 reach from 33 to 40 supplier communities
and increase revenue streams with the use of
Companies can protect their workforces 55 bioingredients, up from 38 today.
by providing health coverage to workers
throughout the value chain. Additionally,
businesses can create contingency plans
for climate-related shocks and identify
product opportunities and priorities to pair
environmental and health benefits.18
17. UNHCR (2021) Climate Change and Displacement in MENA.
18. United Nations Global Compact (2021) Business Narrative
and Call for Health Resilient Climate Action. 19. UNEP (2021):
36 Adaptation Gap Report 2020. Percentages may not add to 100%, as charts do not reflect those respondents who selected “do not know.” 37
According to Roberto Marques, Executive FIGURE 12: BUSINESS MATURITY ON ADVANCING NATURE-BASED SOLUTIONS, BY INDUSTRY
Chairman of the Board of Directors and
Group CEO of Natura &Co, “biodiversity and How mature do you believe your company is across the following climate resilience
forest regeneration are interconnected with and adaptation actions? Nature-based solutions for disaster risk reduction
the climate crisis. They deserve greater
attention, and we need the private sector,
Government, and civil society to align on an
Basic Resources 12% 53% 12% 15% 9%
intentional set of goals.”
Food & Beverage 6% 29% 35% 24% 6%
Similarly, LVMH, a French luxury group, is Utilities 5% 32% 32% 23% 9%
accelerating biodiversity preservation
and restoration across 75 brands under Telecommunications 12% 41% 6% 24% 18%
the Group. It is strengthening its impact Travel & Leisure 17% 13% 27% 37% 7%
measurement techniques on biodiversity,
Chemicals 14% 16% 27% 27% 16%
discontinuing the use of raw materials from
areas at high risk of deforestation, and Health Care 3% 28% 25% 28% 16%
using regenerative agriculture techniques
Construction & Materials 11% 19% 23% 26% 21%
to farm cotton, wool and grapes. According
to Antoine Arnault, Image & Environment, Oil & Gas 4% 26% 22% 39% 9%
LVMH, Member of the LVMH board, CEO of Personal & Household Goods 8% 27% 15% 19% 31%
Berluti, “all of our products depend on nature;
there is no champagne without grapes, or Real Estate 14% 14% 23% 18% 32%
perfumes without flowers. Protecting nature Retail 20% 25% 40% 15%
and becoming a circular business is a critical
Alternative Energy 11% 7% 26% 30% 26%
priority for us.” LVMH has also launched
a five-year partnership with UNESCO’s Automobiles & Parts 5% 24% 14% 38% 19%
Man and the Biosphere program, working
Industrial Goods & Services 4% 13% 26% 29% 28%
in the Amazon regions of Bolivia, Ecuador,
Brazil and Peru to fight deforestation and Diversified 6% 16% 17% 27% 34%
promote biodiversity through reforestation Technology 8% 11% 15% 25% 41%
and rehabilitation of degraded lands.
Through these measures, LVMH aims Financial Services 10% 10% 8% 20% 52%
38 “Other” indicates respondents who answered “do not know” or “not applicable.” 39
40 20. International Labor Organization (2021) UN Secretary-General Calls for Accelerated Action on Jobs and Social Protection. 41
Woman farming. Photo: World Bank
TECHNOLOGY
WILL DELIVER THE
NEXT FRONTIER OF
CLIMATE ACTION
Technology is fundamentally transforming Today, over three-fourth of CEOs globally Data is at the core of any effective climate
business models and it’s also introducing (77%) are promoting sustainability-focused response. As Deutsche Bank AG CEO,
entirely new industries to efforts to research and development — from product Christian Sewing, points out, “it is important
accelerate global decarbonization. As design to material selection. “The future that we get into impact measurement in the
Christian Klein, CEO and Member of the promises autonomous-driving, smart near future. Data is a game-changer in this
Executive Board of SAP SE, explains, houses and smart cities. To make this future context. To measure impact and manage
“technology can help address some of the possible, we will continue to proactively risk, we need to have access to good data.”
most profound environmental, economic, invest in innovation and the underlying CEOs say they are building ESG data-
and social challenges of our time at scale. It technology infrastructure,” says Toshiki management capabilities. Globally, 81% of
enables us to convert our biggest challenges Kawai, Representative Director, President CEOs globally are leveraging technology
into our greatest opportunities and make & CEO, Tokyo Electron Limited. to collect and manage organization-wide
sustainability profitable and profitability ESG data; yet only one-quarter of these
sustainable.” Advances in technologies from Leading businesses are also virtually CEOs (25%) are managing their data at an
artificial intelligence (AI) to internet-of-things representing assets using digital twin advanced level.
(IoT) to cloud management are collectively technology to reimagine opportunities to
forcing CEOs to raise the ceiling on their embed sustainability early in product design. CEOs also highlight the potential of real-
climate ambitions. Globally, 44% of CEOs say that digital twin time track-and-trace and blockchain
technology will make a significant impact on technologies to collect quality sustainability
Leaders acknowledge that while technology sustainability in their industry over the next data. Globally, 71% of CEOs say that
is not a silver bullet in isolation, it is a five years; notably, 65% of CEOs in the real real-time track-and-trace of materials or
powerful enabler of enhanced climate action. estate industry agree with that assessment. goods will have a significant impact on
Manon van Beek, CEO of TenneT TSO B.V., David Briggs, CEO of the VELUX Group, sustainability in their industry over the
says, “innovation is more than just developing observes how digital twins are already next five years. 60% of CEOs say the same
technology; it’s about combining the right supporting sustainability in his industry. about blockchain track-and-trace supply
technologies, at the right time, at the right “Digitalization is here, now it’s a question of chain solutions. As Annica Bresky, President
place.” Jean Jereissati, CEO of Ambev, adds, adoption. Every building should have a digital and CEO of Stora Enso, explains, “digital
“technology is a lever to solve problems, twin to help us understand how we replace, track and trace technology will be critical
not an outcome in of itself. To address reutilize, and recycle components throughout to overcoming transparency challenges
problems, we need to pair technology with the life cycle of a building.” throughout the value chain. Increasing
collaboration, proper business models, and access to carbon footprint data will enable
financial markets.” us to make fact-based choices on materials
and products.”
44 45
Data center interior server room. Photo: Adobe/Cybrain
Case Study TO FULFILL THE PROMISE OF FIGURE 13: TECHNOLOGY PROMISES TO SIGNIFICANTLY ACCELERATE THE FUTURE OF
TECHNOLOGY, CEOS SAY THEY MUST SUSTAINABLE VALUE CHAINS WITHIN THE NEXT 5 YEARS
OVERCOME AFFORDABILITY AND
JOHNSON CONTROLS KNOWLEDGE CONSTRAINTS Which technology solutions will have a significant impact on sustainability in your
industry within the next 5 years?
Digital Twin Technology for
Sustainable Buildings Capturing the full potential of technology to
solve the climate challenge requires lowering
Johnson Controls, a global leader in smart cost barriers. More than half of CEOs globally
and sustainable building technologies, is (54%) cite the affordability of available < USD
USD 25
25 MILLION
million USD
USD25 - 250MILLION
25-250 million USD
USD 25MILLION
250 million –
- 11 billion
BILLION >> USD
USD 1 billion
BILLION
applying digital twin technology — a virtual technologies as a critical barrier to their Analytics on processes,
model to determine a physical object’s sustainability efforts in their industry. equipment and products
77% 82% 78% 87%
performance – to improve energy efficiency As Dr. Anish Shah, Managing Director and
of the built environment. Customer sentiment analysis
CEO of Mahindra & Mahindra Ltd., notes, on sustainability preferences
77% 83% 82% 84%
Globally, about 40 percent of CO2 emissions are “two areas will define global sustainability Artificial Intelligence (AI)
generated by the building sector, so innovations progress for people, businesses, and the demand forecasting
74% 74% 79% 78%
that reduce this impact will play a vital role in planet: technology flow and capital flows.”
mitigating climate change.21 Through Johnson Electric vehicles for
73% 67% 77% 77%
transportation and distribution
Controls’ OpenBlue platform and solutions, These challenges are particularly
digital twin technology can drive 50% or more pronounced in the Global South, where Autonomous and remote
74% 67% 69% 76%
improvement in energy efficiency and carbon operations
nearly two-in-three CEOs (65%) are
emission reduction. For instance, Johnson
restricted by the price of sustainability- Predictive models to schedule
69% 79% 74% 75%
Controls has partnered with Dubai Electricity maintenance and repairs
and Water Authority and Microsoft on the enhancing technology, compared to 45% of
implementation of Al Shera’a, the smartest net CEOs in the Global North. Aloke Lohia, Group Real-time track-and-trace of
71% 67% 63% 77%
materials or goods
zero-energy government building in the world. Chief Executive Officer of Indorama Ventures
Through digital twin technologies, AI, and smart Public Company Limited, states, “few plastic Tracking systems to manage
65% 63% 51% 64%
product use after sale
building management solutions, Al-Shera’a is industry players are confident in recycling
expected to utilise up to 50% less water than investments because the technology is not Blockchain track-and-trace
59% 64% 55% 64%
comparable buildings and the total energy used supply chain solution
fully developed and it is unclear who will own
in the building annually is expected to be equal to
or less than the energy produced on-site. the cost.” Take-back and returns
60% 53% 52% 53%
management systems
Digital Twin uses artificial intelligence on the In addition, technology-knowledge gaps
digital model to optimize and predict efficiencies 3D printing for product design
built environment. Furthermore, digital twin gains. More than half of CEOs globally (53%) Virtual representation of
technology has the potential to unlock $1.3 report that they struggle to understand assets through digital twin
46% 38% 41% 46%
trillion in economic value and 7.5Gt carbon which technologies can enhance their
dioxide equivalent emissions reductions sustainability performance. CEOs of smaller
by 2030.22 companies are disproportionately held back
According to George Oliver, Chairman and by knowledge limitations: 58% of CEOs of
CEO of Johnson Controls, “We can reinvest companies with less than USD 25 million
and enhance sustainability while generating in annual revenue struggle to understand
economic returns. By upgrading equipment and which technologies to deploy to enhance their
deploying OpenBlue as a digital platform, we can sustainability efforts — compared to 43% of
utilize data to improve how a building operates,
CEOs of companies with greater than USD 1
improve health and safety protocols, and create
incredible efficiency.” billion in annual revenue.
21. UNEP (2020): 2020 Global Status Report for Buildings and
Construction. 22. Accenture (2021): Accelerating Sustainability
46 with Virtual Twins. 47
SPECIAL FOCUS
CREATING A NEW
CLIMATE ECONOMY
WITH THE GLOBAL SOUTH
23. Expert Group on Climate Finance (2020) Delivering on the $100 billion climate finance commitment and transforming climate finance.
24. Global North and South definitions are not geographical boundaries and are distinguished on the basis of Gross National Income per
capita. High-income economies with $12,535 or more are referred to be in the “Global North”. Upper-middle income, lower-middle income and,
low-income economies within the range of $1,035 and $12,535 GNI per capita are referred to be in the “Global South” (World Bank). 25. OECD
(2019) Statement from OECD Secretary-General Mathias Cormann on Climate Finance in 2019. 26. UNEP (2020) Adaptation Gap Report,
27. World Bank (2021) Small and Medium Enterprises (SMEs) Finance.
50 51
Case Study
FIGURE 15: THE COVID-19 PANDEMIC HAS CEOS SAY CAPITAL, KNOWLEDGE, DESPITE THESE CHALLENGES, CEOS DALMIA CEMENT
SET BACK SUSTAINABILITY BUDGETS IN THE AND TECHNOLOGY MUST FLOW TO IN THE GLOBAL SOUTH REMAIN
GLOBAL SOUTH
THE GLOBAL SOUTH TO LOWER THE COMMITTED TO PRIORITIZING CLIMATE Leading the Industry to
SUSTAINABILITY PREMIUM FOR ACTION AND REDUCING GHG EMISSIONS Cleaner Cement
To what extent do you feel the pandemic
LEAPFROG ACTIONS
has increased or decreased your budget
for sustainability? While financially constrained, CEOs in Dalmia Cement, the Indian cement
Current levels of public and private funding the Global South are signalling a steady manufacturer, is transforming cement
are not meeting the requisite capital commitment to climate action as they production through adoption of multiple levers
% of CEOs who say their company has changed
their budget for sustainability initiatives due to needed for a successful net-zero transition. including the use of alternative and biofuels in
navigate the COVID-19 pandemic. Over
the pandemic Investments in developing economies to cement kilns and increasing renewable energy
half of CEOs in the Global South (59%) are power generation to decrease fossil fuel
reduce emissions go further than in more prioritizing climate action in their recovery intensity on cement manufacturing processes.
23%
advanced economies. That’s because from the pandemic and 55% are adopting
24%
developing
Changes in budget for economies can generally adopt more ambitious sustainability targets. The company also uses industrial waste
% of CEOs who say cleaner, more efficient technologies faster
sustainability differ from steel, thermal power and aluminium
widely by company
becausesize they do not have to phase out or
their company has 38% across the Global South,
production materials, significantly reducing
changed their budget 54% refit as many existing, polluting energy limestone and energy consumption per ton of
for sustainability with the smallest
initiatives due to the companies projects
having to as do more advanced economies. “The pandemic may slow some initiatives due cement. As a result, Dalmia Cement’s carbon
+1 4% reduce budgets most
pandemic For business leaders, financial limitations to budget constraints in 2021, but that doesn’t footprint is 40% lower than its 1990 levels.
significantly
38% present challenges beyond capital allocation. stop us from brainstorming, researching, and
24% planning for new sustainability ventures.” The company has also announced to set up a
They restrict a company’s ability to access
Global North Global South sustainable goods and services, and CEOs pilot project to capture its emissions before
Soraya Narfeldt, they enter the atmosphere. In partnership with
Increased budget Reduced budget Little or no impact in the Global South are disproportionately CEO of RA International
UK-based technology company Carbon Clean
Increased budget Reduced budget Little or no impact feeling this pressure: 63% of CEOs in the Solutions, Dalmia Cement plans to set up the
Global South cite high costs associated with industry’s largest carbon-capture facility at
the sustainability premium as a pressing its Tamil Nadu plant in India. The initiative will
barrier to their sustainability agenda, capture 500,000 tons of carbon dioxide
compared to 53% of CEOs in the per year. The feasibility study of the project
Global North. has been completed this year with support
from ADB.
CEOs from around the world are acutely
attuned to both the gravity and urgency of The cement industry accounts for 8% of global
closing the financing gap. For many CEOs, CO2 emission, which makes it one of highest-
emitting industries.28 The development of a
COP26 presents the ideal forum for business
robust price on carbon across regions can
and Governments to rectify the growing significantly accelerate the research and
financing gap between what is needed and development needed in the cement industry.
what is currently provided.
Mahendra Singhi,
28. BBC (2018): Climate change: The massive CO2 emitter you may Managing Director and CEO, Dalmia Cement
52 Percentages may not add to 100% due to rounding. not know about. 53
NEW MEASURES OF
COMPETITIVE ADVANTAGE
LEADERSHIP FOR
THE ELEVENTH HOUR
Business leadership
survey, and it identifies behaviors that leaders financial case turning sustainability to business advantage
are taking. This approach generated insights
on attributes of transformational companies
and how they maintain leadership on both
business and sustainability performance. Notional Vulnerable
Underperforming industry peers on Externally recognized sustainability leader,
sustainability and on traditional metrics but efforts may not be rewarded through
of success superior business performance
29. The CAI scores 9,030 companies across 20 sectors and 127
discrete industries using more than 4 million data points from Sustainability leadership
publicly available data (historical and future projections) as well
as innovative sustainability and trust measures powered by
Arabesque S-Ray®. S-Ray combines over 200 environmental,
social and governance (ESG) metrics with news signals from over
50,000 sources across 15 languages. It also rates companies on the
normative principles of the United Nations Global Compact: Human
Rights, Labor Rights, the Environment, and Anti-Corruption
56 (GC Score). 57
Shipping containers. Photo: World Bank/Dominic Sansoni
TRANSFORMATIONAL LEADERS LEADERS ARE RAPIDLY ACCELERATING LEADING CEOS HARNESS THE POWER … AND THEY’RE MANAGING SOCIAL
HAVE REMAINED UNDETERRED BY R&D INVESTMENT IN CLIMATE- OF TECHNOLOGY ACROSS THEIR VALUE IMPACTS ON THEIR PEOPLE FROM THE
THE COVID-19 PANDEMIC AND HAVE RESILIENT SOLUTIONS TO FUTURE- CHAINS TO MANAGE THE EFFECTS OF TRANSITION, BETTER.
INCREASED THEIR BUDGETS FOR PROOF THEIR BUSINESSES FROM THE CLIMATE DISRUPTION
SUSTAINABILITY WORST IMPACTS OF CLIMATE CHANGE
22% of transformational-company CEOs are Transformational leaders are supporting their
Our research finds that not a single leader More CEOs of transformational companies prioritizing investment in digitizing their value people and their businesses by investing in
in the transformational category reduced are at an advanced level of maturity in chains with advanced technologies, while green jobs (62% vs. 52% all other categories).
their budget for sustainability due to boosting R&D investment dedicated for just 6% of notional-company CEOs and 0% of In addition, more transformational leaders
the COVID-19 pandemic. In fact, 41% of climate resilient solutions (31% vs. 12% transactional-company CEOs say the same. are at an advanced level of maturity in
transformational-company CEOs increased all other categories); designing resilience implementing social security nets to protect
their budgets for sustainability (by up to 25%, infrastructure (41% vs. 20% all other Leaders of transformational companies are the workforces from climate-induced risks
on average). In contrast, 14% of CEOs in the categories); and adopting nature-based at an advanced level of maturity in leveraging (24% vs. 11% all other categories) and investing
transactional category, 17% of CEOs in the solutions for disaster-risk reduction (22% technology to collect and manage ESG in worker skills and union development (26% vs.
vulnerable category, and 31% of CEOs in the vs. 6% all other categories). data (35% vs. 23% all other categories). 22% all other categories).
notional category reduced their budgets for Yet, more transactional companies are at
sustainability due to the pandemic. Despite their long-term benefits, such an advanced level of maturity on other
capital-intensive actions may not yield dimensions, like transitioning to green IT and
short-term financial gains, which are difficult cloud architecture (33% vs. 25% all other
LEADING CEOS HAVE ALREADY to quantify by the transactional leaders. categories).
BEGUN DIVERSIFYING THEIR
OPERATIONS AND WORKFORCES TO Looking forward, transformational-company
MANAGE CLIMATE RISK CEOS OF TRANSFORMATIONAL
COMPANIES ARE HOLDING CEOs see the following technologies as
THEMSELVES TO HIGHER those most likely to make the greatest
Thirty-three percent of CEOs of leading STANDARDS OF ACCOUNTABILITY impact and drive the future of sustainability
companies within the transformational ON CLIMATE ACTION in their industries: analytics for processes,
category say they are at an advanced equipment, and products (89%); real-time
stage of maturity in diversifying material A greater number of transformational- track-and-trace of materials and goods
inputs required for products and operations company CEOs say they are at an advanced (85%); and artificial intelligence for demand
— compared to 12% of CEOs in all other level of maturity in developing net-zero forecasting (82%).
categories, and 9% of CEOs in the notional targets (49% vs. 32% all other categories);
category. linking executive renumeration to greenhouse TRANSFORMATIONAL COMPANIES
gas reduction targets (20% vs. 12% all other ARE SHIFTING FROM FOSSIL
Similarly, transformational-company CEOs categories); and assessing and disclosing FUELS, FASTER…
are strong in geographic diversification of climate-related financial risks (43% vs. 16%
their workforces across operations — 55% all other categories). 26% of CEOs of transformational companies
of these CEOs are advanced here, relative to say they are advanced in their journeys to
32% of CEOs in all other categories. divest from existing fossil fuel investments,
while 0% of transactional-company CEOs say
the same. Transformational-company CEOs
are also leading the charge toward preparing
their firms for a carbon-neutral future
by making sure their capital is allocated
accordingly.
58 59
Sacks of grain. Photo: World Bank/Curt Carnemark
FIGURE 17: KEY BEHAVIORS ENABLING STRONG SUSTAINABILITY AND MARKET PERFORMANCE FIGURE 18: RELATIVE SHIFT OF COMPANY LEADERSHIP ON SUSTAINABILITY
TRANSFORMATIONAL CLASSIFICATION FROM 2019 TO 2021 AND BUSINESS IN 2021
LEADERSHIP IS NOT ONLY
HARD TO ACHIEVE, BUT 2 019 2 02 1
% OF RESPONDENTS CHALLENGING TO SUSTAIN
BEHAVIOR QUOTE
Transformational Transactional Global
70% 70% retained both sustainability
“The pandemic poses an opportunity for CEOs to prioritize Transformational Transformational and business leadership in 2021
sustainability with more urgency.”
The pandemic has
increased your budget Peter Zaffino, 41% 29% 22%
for sustainability President and Chief Executive Officer,
American International Group
15% retained sustainability
“Integrating sustainability across your operations can Vulnerable
initially be challenging, but continued discipline will 15% leadership but suffered
uncover its benefits. For example, investment in our Vulnerable growth and profitability
Diversification of
material inputs in
logistics and manufacturing capabilities has increased our loss by 2021
products and
energy efficiency, which supports our long-term 34% 20% 15%
sustainability commitments.”
operations
Praveen Singhavi,
11% lost sustainability
11% leadership but managed to
President, APRIL Group Transactional
Transactional
retain business leadership
“Leading by example, we encourage and challenge our by 2021
competitors to make investments in building more
R&D investment resilience in our communities. One organization can only
dedicated for do so much, but organizing a collective effort takes
climate resilient advantage of the benefits of scale.” 33% 11% 15% 4% companies lost both
solutions 4% business and sustainability
Roy Bagattini,
Notional Notional
leadership by year 2021
Group Chief Executive Officer, Woolworths Holdings Ltd.
30% 50%
energy system without relying on fossil fuels and not to
Divesting from waste energy.”
existing fossil 26% 19% 11%
fuel investments Shinichi Odo,
Representative Director Chairman of the Board,
NGK SPARK PLUG CO., Ltd.
60 61
THE ROAD TO 2030
WHAT BUSINESS NEEDS
FROM POLICYMAKERS
Annica Bresky, President and CEO of Business leaders are also calling for “The sustainability challenge, and
Stora Enso
Governments and policymakers need to
comprehensive frameworks and reporting particularly climate change, is global by
engage the private sector more proactively definition and it needs to be addressed
standards on biodiversity to better evaluate on climate solutions, from the quick wins to as such. Different standards across
the impact of their operations. Globally, fewer the long-term engagements. Only 30% of countries only raise complexity.
“Successful negotiations will create an
agreement for nature to halt and reverse
than one in five CEOs (21%) recognize the CEOs globally say they believe Governments We need increased public-private
natural loss by 2030.”
loss of biodiversity and related ecosystem have a good understanding of business cooperation and Government support
services — such as ocean acidification, to achieve greater standardization and
opinion on climate policy. commonality.”
Roberto Marques, Executive Chairman of pollination collapse and marine species
the Board of Directors and Group CEO of redistribution — as a risk to their business Collaboration between Government and Luis Maroto, President & CEO, Amadeus IT
Natura &Co or industry. business in areas such as procurement Group, S.A.
systems and planning and developing green
Compared to emission-reduction frameworks infrastructure can deliver accelerated “The pandemic has highlighted the
“The link between climate and and performance standards, biodiversity- innovation and transition. For instance, importance of Governments creating
biodiversity is undisputable and we impact evaluation remains nascent. Yet, more in Europe, Government and business meaningful partnerships with
need a clear way of measuring the than USD 44 trillion of economic value — corporations to solve problems quickly.”
impact of our efforts. The private partnership in the North Sea could develop
sector has the means to tackle this
more than half of global GDP — is moderately renewable energy sharing capabilities across
problem, we just need guidance from or highly dependent on nature, underscoring multiple countries for the first time. James M. Loree, Chief Executive Officer of
the gravity of the challenge.36 Stanley Black & Decker
policy makers on what to do.”
CEOs want to share their expertise,
Antoine Arnault, Image & Environment, Investments in nature-based solutions are innovation and climate solutions at scale “There is a unique opportunity to
LVMH, Member of the LVMH board, CEO not feasible for the private sector alone.37 enhance public-private partnerships in
through policy to halve emissions by 2030 the global financial industry. Together,
of Berluti Governments must encourage innovative and achieve net-zero by 2050 in line with the we must work towards improving the
mechanisms to attract companies to scale Paris Agreement. quality and robustness of climate-
up nature-based solutions as multilateral related disclosures, better enhancing
“Impacts on biodiversity are fully development banks and countries increase the measurement and management of
dependent on the location and ecosystem climate-related financial risks, identifying
balance in areas of operations. It is
adaptation financing.
opportunities to invest in low-carbon
becoming urgent to design standardized and climate-resilient investments, and
methodologies to assess impacts and scaling up private financial flows into
mitigation measures.” sustainable infrastructure across
emerging economies.”
Ignacio S. Galán, Chairman & CEO of Iberdrola
Rob Fauber, President and Chief Executive
Officer of Moody’s
72 73
“Sustainability is a critical differentiator “Young people are very attentive to the “Sustainability is a priority for most “The only strategy we need is a
for us as a business. It will help us social and environmental aspects of businesses. For us, it is our business and sustainable business strategy,
recruit the top talent and attract what they buy and where they will work. has been a number one priority for over not separate sustainability and
capital from investors.” Business leaders know that if they do a year.” business strategies. That boundary
not respond, they put the future of their has been eliminated.”
Mirko Bibic, President and CEO, Andreas Shiamishis, Chief Executive Officer,
companies at risk.”
BCE & Bell Canada Hellenic Petroleum SA Ola Källenius, Chairman of the Board
Fausto Ribeiro, CEO, Banco do Brasil of Management, Daimler AG and
Mercedes-Benz AG
“The pandemic has sparked a “We have been working to integrate
sustainability revolution — a solutions to environmental and social
“Sustainability is absolutely a business issues into our business strategy — this
transformation that our company has “There is an early mover advantage
imperative. ESG is a once in an investor’s integration will only accelerate.”
pursued in the last years and that we lifetime opportunity and we are all in at for companies who adopt renewables
have even accelerated” every level of our business.” and link sustainability with their
Hironori Kamezawa, President & Group CEO,
business growth.”
Claudio Descalzi, Mitsubishi UFJ Financial Group, Inc.
Suni P. Harford, Group Executive Board Sponsor
CEO, Eni Subhash Kumar, Chairman, ONGC Group of
for Sustainability and Impact, UBS
Companies & President, UN Global Compact
“For any business to operate smoothly, it Network India
“The banking sector has to both support needs a sustainable platform.”
“Sustainability is at the heart of our
growth and development with strong
strategy. I’m spending at least 20% of Dr. GD Singh, Founder & President, Unified Brainz
capital and liquidity, while at the same “Sustainability isn’t limited to our
my time talking about sustainability Virtuoso Limited, and Founder & Chairman,
time, providing finance for the energy company. There is an entire supply chain
and making sure that it’s anchored in Asian African Chamber
transition. We cannot do one without to consider. For each item we produce,
every KPI and every departmental
the other.” there is a manufacturer, a materials
performance review.”
“I do see a lot more local brand owners supplier, a farmer and so on. We need to
Carsten Egeriis, Chief Executive Officer, look at every part of the supply chain.”
David Briggs, CEO, The VELUX Group that are starting to embrace the
Danske Bank
sustainability premium — I think they are
Ryuichi Isaka, President & Representative
starting to realize that it is a win-win for Director, Seven & i Holdings
“We are engaged in our R&D with an eye them as their customers become more
“We believe effective management of ESG
as a strategic business imperative will toward the next 10 to 15 years. It is for aware of sustainability.”
enable us to generate business value over delivering innovative treatment options
based on the cutting-edge science to the Toni Hambali, Chief Executive Officer,
the long term.”
diseases with high unmet medical needs Dynapack Asia
Alex Gorsky, Chairman and CEO, for which there is no adequate treatment
Johnson & Johnson option unless we develop them. Definitely,
sustainability is a core component of our “This is the right time to improve our
business strategy.” sustainability initiatives and strengthen
our responsibility to our society and all
“Given increased customer, investor,
Kenji Yasukawa, Ph.D., President & CEO, stakeholders through more responsible
regulator, media, and stakeholder
Astellas Pharma Inc. business practices.”
appetite for responsible business
practices, it has become important to Vidjongtius, President Director,
not only have ambitious ESG strategies, PT Kalbe Farma Tbk
but to ensure they are integrated with
business strategy.”
74 75
Debbie Crosbie, CEO, TSB Bank
ABOUT THE UNITED NATIONS GLOBAL COMPACT THE TEN PRINCIPLES OF THE UNITED NATIONS
As a special initiative of the UN Secretary-General, the United Nations Global Compact is a call GLOBAL COMPACT
to companies everywhere to align their operations and strategies with Ten Principles in the areas
of human rights, labour, environment and anti-corruption. Our ambition is to accelerate and
scale the global collective impact of business by upholding the Ten Principles and delivering the
HUMAN RIGHTS
Sustainable Development Goals through accountable companies and ecosystems that enable
change. With more than 13,000 companies and 3,000 non-business signatories based in over
1. Businesses should support and respect the protection of
160 countries, and 70 Local Networks, the UN Global Compact is the world’s largest corporate
internationally proclaimed human rights; and
sustainability initiative — one Global Compact uniting business for a better world.
2. make sure that they are not complicit in human rights abuses.
For more information, follow @globalcompact on social media and visit our website at
unglobalcompact.org.
LABOUR
ABOUT ACCENTURE
3. Businesses should uphold the freedom of association and the
effective recognition of the right to collective bargaining;
Accenture is a global professional services company with leading capabilities in digital, cloud
and security. Combining unmatched experience and specialized skills across more than 40
4. the elimination of all forms of forced and compulsory labour;
industries, we offer Strategy and Consulting, Interactive, Technology and Operations services —
all powered by the world’s largest network of Advanced Technology and Intelligent Operations
5. the effective abolition of child labour; and
centers. Our 624,000 people deliver on the promise of technology and human ingenuity every day,
serving clients in more than 120 countries. We embrace the power of change to create value and
shared success for our clients, people, shareholders, partners and communities. 6. the elimination of discrimination in respect of employment
and occupation.
Visit us at www.accenture.com.
ANTI-CORRUPTION
The inclusion of company names and/or examples in this publication is intended strictly for learning purposes and does not constitute an
endorsement of the individual companies by the UN Global Compact.
ACKNOWLEDGMENTS
ADDITIONAL ACKNOWLEDGMENTS Amit Sinha, Mahindra & Mahindra Ltd.
Brigitta Dewanti, Martha Tilaar Group
Lisa Luhur-Schad, Media Group
We would like to thank the following leaders for their Raphaël Rougier, Michelin
invaluable support Sarah Clarke, Mirvac
Yuki Sugiyama, Mitsubishi UFJ Financial Group, Inc.
EXECUTIVE SPONSORS Karin Reiter, The Adecco Group Ralph Traviati, Pirelli
Sanda Ojiambo Ana María Marín Farrona, Aena Andy Berenblum, Moody’s
Peter Lacy Valérie Durand, Air Canada Loren Cowling, National Grid
Julia Laplane, Alstom Keyvan Macedo, Natura &Co
Lucas Bobes, Amadeus IT Group, S.A. Rob Cameron, Nestlé SA
PROGRAM LEADS Carlos Pignatari, Ambev Kaori Osawa, NGK SPARK PLUG CO., Ltd.
Sean Cruse Dana Ripley, American International Group Mari Takahashi, Nippon Koei Co., Ltd.
Michael Hughes Hermien Botes, Anglo American plc Robert Coppin, Nokia
Sihol Aritonang, APRIL Group Kirsten Margrethe Hovi, Norsk Hydro ASA
Grant Sprick, Arcadis N.V. Deb Adhikari, ONGC Group of Companies
STUDY LEAD
Francisca Hernández, ARPA Gwyneth Weller, Pernod Ricard
Apurv Gupta
Takako Asayama, Asahi Group Holdings Dimitrios Dimopoulos, Piraeus Bank Group
Letchumi Achanah, Asia Pulp & Paper (APP) Sinar Mas Filippo Bettini, Pirelli & C. SpA
AUTHORS Moemi Takehisa, Astellas Pharma Inc. Melina Karamoy, PT Kalbe Farma, Tbk
Grant Lurie Céline Soubranne, AXA Group Savanit Boonyasuwat Srilerdfah, PTT Global Chemical Plc.
Noah Spector Nate Pepper, Baker Hughes Vera Karmeback, RA International
Daisy Vanags Gabriel Maceron Santamaria, Banco do Brasil Rob Colmer, Royal Dutch Shell plc
Toni Ballabriga Torreguitart, BBVA Brechtje Spoorenberg, Royal KPN N.V.
Marc Duchesne, BCE & Bell Canada Anette Hendrickx, Royal Philips
ANALYTICS Dennis Mikkelsen, BDR Thermea Group Aya Nishimura, Ryohin Keikaku Co., Ltd.
Sayyed Gulzaib Miyan Laura Keller, Biogen Inc. Jason Feuchtwanger, S&P Global
Fergal Keaney Jorge Soto, Braskem Vivek Bapat, SAP
Jerry Li Olivia Bruce, Cape Town International Convention Centre Akiko Nakamura, Seven & i Holdings Co., Ltd.
Matthew Pratt Aleksandar Pavlovic, Cartier International Harry Verhaar, Signify
Echo Wang Ashley Pearlman, Cisco Laure-Anne Warlin, Sodexo
Esther An, City Developments Limited Kenny Angove, SSE
Palmer Brown, Compass Group plc Carol Ballock, Stanley Black & Decker
UNGC CONTRIBUTORS Laura McMullen, Compass Group plc Annette Stube, Stora Enso
Dan Thomas Pippa Maloney, Coty Yoshihisa Takasaki, Sumitomo Chemical Company, Limited
Heidi Huusko Karsten Schroeder, Daimler AG and Mercedes-Benz AG Miyuki Suzuki, Suntory Holdings Limited
Anna Kruip Anupam Badola, Dalmia Cement Chaitanya Bhanu, Tata Steel Ltd.
Arjun Bhargava Kasper Elbjørn, Danfoss Giacomo Cosimo Befo, TIM Group
Lauren Snyder Kristina Sjøberg Øgaard, Danske Bank Anita Marie Gilje Househam, Telenor Group
Jörg Eigendorf, Deutsche Bank AG Rianne Trouerbach, TenneT TSO B.V.
Rafika Ghrawi, Nutrition and Diet Center Lebanon Stine Green Paulsen, The VELUX Group
Emmeline Hambali, Dynapack Asia Maria Alexiou, TITAN Cement Group
ACCENTURE CONTRIBUTORS Teresa Lobato, EDP and EDP Renewables Tomoko Koarai, Tokyo Electron Limited
Nigel Stacey Paola Lischio, The Enel Group Federika Coll, TSB Bank
Matthew Robinson Luigi Sampaolo, Eni Christian Leitz, UBS
Justin Keeble Heather Johnson, Ericsson Alok Mathur, Unified Brainz Virtuoso Limited
Mauricio Bermudez Neubauer Queenie Wang, Esquel Group Jonathan Gill, Unilever
Sundeep Singh Caroline Elie, Export Development Canada Annika Ramskold, Vattenfall
Anand Acharya, GAIL (India) Limited Richard Ellis, Walgreens Boots Alliance
Jimena Perez Underwood, Grupo Herdez Feroz Koor, Woolworths Holdings Ltd.
Silia Athanasopoulou, Hellenic Petroleum SA
Kristine Schulze, Helvetia Group
Yuri Itoh, Hitachi, Ltd.
Roberto Fernández Albendea, Iberdrola We would like to thank the following leaders
Miguel Muñoz Rodriguez, Iberdrola for their additional input and insights
Junsayam Somnaitham, Indorama Ventures Public
Company Limited Elizabeth Daggett, Helen Harrison, Rachael Bartels,
Kimberly Montagnino, Johnson & Johnson Julia Bierwirth, Trina Hanniman, Lauren Ing, Nina Jais, Jan-Willem
Michael Isaac, Johnson Controls Jannink, Wytse Kaastra, Rod Kay, Sarah Kinnaird, Kentaro Nakamura,
Hiroko Kirihara, Konica Minolta, Inc. Raghav Narsalay, Kathleen O’Reilly, Sandro Orneli, Vishvesh Prabhakar,
Aurore Borderie, LVMH Chris Roark, Aarohi Sen, Cedric Vatier, Barbara Wynne
Uniting business for a better world
The inclusion of company names and/or examples in this publication is intended strictly for learning purposes and does not constitute an
endorsement of the individual companies by the UN Global Compact.