Deloitte
- A new survey gauged leaders' feelings about corporate commitments to address climate change.
- Some 65% of executives said the pandemic has forced them so scale back their environmental efforts.
- Deloitte Deputy CEO Michele Parmelee said despite this, executives will continue to prioritize climate change.
- See more stories on Insider's business page.
The world's corporate leaders are worried about climate change, but the coronavirus pandemic has many cutting back on their efforts to tackle it.
According to a new Deloitte report that surveyed 750 executives from around the world, over 80% said their organizations are concerned about such climate change risks as increasingly limited, natural resources and weather events that disrupt their supply chains. And yet, 65% of executives said their companies will need to cut back on environmental sustainability initiatives in some way due to the pandemic.
"We think it's related to what we call 'short-term thinking,'" Michele Parmelee, Deloitte deputy CEO and chief people and purpose officer, told Insider.
Amid a pandemic that has tightened bottom lines, the new report highlights how companies remain under pressure to nurture their profitability and retain and support their employees. Such a focus on short-term financial health now seems to be at the expense of longer-term, purpose-driven efforts.
"I think this is a temporary, kind of, necessary slow down," Parmelee said.
Parmelee expects the effects of this slowdown to be limited and corporate action on climate change will likely increase over the next several months or years, based on findings from the report.
Over 60% of executives supported immediate action on climate change, and about 50% said adopting more environmental, social, and governance (ESG) measurements increased customer satisfaction and employee morale, per the Deloitte report.
More customers and workers are indeed demanding change from executives.
Nearly 70% of Americans want the US to take "aggressive" action to combat climate change, according to a 2019 Reuters/Ipsos poll. And an April 2020 survey of 1,000 consumers found that nearly half of respondents said the pandemic has made them more concerned about the environment, Food Dive reported.
Then there's pressure from investors.
In the US, for example, shareholders have already filed 79 climate-related resolutions so far this year, compared with 72 for all of 2020, per data compiled by the Sustainable Investments Institute and shared with Reuters. The total number of climate-related resolutions could reach 90 this year, Reuters reported.
"There's a whole ESG transparency reporting movement," the deputy CEO said, pointing out that companies will soon have more obligations to disclose ESG metrics and goals.
In March, the Securities and Exchange Commission (SEC) announced the creation of a Climate and ESG Task Force, which is tasked with increasing investor focus on ESG disclosures and investment and will also work to identify ESG-related misconduct.
"The pandemic has slowed down corporate climate change efforts," Parmelee said, "but we don't see anyone saying that this climate challenge is going to go away."