Climate change: the CFO’s perspective

This is why we have conducted an additional questionnaire alongside the annual Deloitte Central Europe CFO survey to ask participants about the measures their companies are planning or taking to address the challenges involved with tackling or adapting to climate change.

These are essential considerations. Politicians and legislators, regulators, customers, employees and other stakeholders all have a growing interest in holding companies to account as the growing weight of scientific evidence points to the increasingly visible and accelerating changes to weather patterns that are being driven by business activities.

As a result, the business landscape is shifting fast, exposing companies to the transition risks associated with fast-changing technologies, markets and regulations that are driving cost increases and, in some cases, causing business models to be re-evaluated.

Contrasting plans, diverse targets

Well over a third (41%) of the companies we engaged with have a specific plan for by how much to reduce their carbon emissions. However, half of the CFOs we surveyed (49%) report that their companies do not as yet have a detailed plan to reduce carbon emissions.
 

Timeframes: major variations between companies and industries

Only 31% of the companies with a plan to reduce their carbon emissions are aiming to achieve their goals by 2030. More than half of the CFOs we surveyed said their organisations have no specific time frame for their carbon-reduction efforts. A small minority of companies (3%) have achieved their targets already.
 

The main motivating factors behind climate action

More than 40% of the CFOs we surveyed told us that the greatest motivating factor is the opportunity to save costs by taking action on climate change. Many have a different motivation, including the need to comply with current and/or upcoming regulation (34%); and improving the reputation of their company and gaining trust from their customers and clients (31%).
 

The climate action companies are planning to take

There are numerous actions that businesses can take to reduce their carbon emissions. There is, however, no one-size-fits-all strategy as companies in different industries face different challenges. The majority of CFOs (58%) are reducing or planning to reduce in-house emissions through incremental change. In addition, 36% of participants in the survey aim to develop new climate-friendly products and services to meet their carbon-reduction goals and hence capitalise on growth opportunities due to the high demand for these products.