Deloitte study: sustainability remains a top three priority for companies globally. 85% of them have increased investments in the “green” transition over the last year, and 50% use technological solutions to achieve climate goals

Sustainability remains a top three priority for management teams globally, slightly behind innovation, including artificial intelligence (AI), and concerns related to the economic outlook, and surpassing topics such as political instability, regulatory pressure and competition for talent, according to the Deloitte CxO Sustainability Survey 2024. An important indicator in this regard is the fact that 85% of the executives surveyed in this year’s study - compared to 75% in 2023 - state that their organizations have increased investments in the “green” transition over the last 12 months, while half of respondents say they have started using technology to achieve climate goals, and 42% plan to do so in the next two years.

The impact of climate change on business strategies and operations is also increasing, with 70% of business leaders – up from 61% in 2023 – saying they expect major consequences in the next three years, and almost half (45%) stating that they are working to transform their business model in a sustainable way. The main actions already implemented are the use of more sustainable materials (51%), energy efficiency (49%) and the design of ecological products and services (48%). The areas in which surveyed companies have implemented or plan to implement technological solutions are monitoring the supply chain environmental, social and governance-related (ESG) performance, as mentioned by 57% of the participants, operational efficiency (54%), monitoring internal ESG performance (54%), developing sustainable products or services (52%) and reporting (52%).

Business leaders mention operating margins and supply chain resilience (37%) in the top five benefits of sustainability initiatives, along with meeting consumer (38%) and employee (37%) expectations.

“A notable trend identified by the study is the growing belief among management teams that climate change action can also be a driver for innovation, including through the use of technology, and it becomes obvious that they can work together and reinforce each other. Organizations are beginning to link tangible financial benefits to sustainability initiatives, which, in this year’s edition of the report, outrank benefits related to brand and reputation for the first time, which is a proof of a new stage of maturity in the transition,” stated Alexandru Reff, Country Managing Partner, Deloitte Romania and Moldova.

The study draws attention to the fact that sustainability investments and the actual progress of the transition are unevenly distributed. Most companies (56%) act moderately (“moderate middle”), aiming to make progress in key directions, with quick benefits, and only 17% can be classified as “change leaders”, which demonstrate a complex and in-depth approach on sustainability, with consistent investments and measures. At the opposite pole, over a quarter of businesses (27%) have taken minimal or no action to date, although over half of them (63%) admit that climate change already has an impact on strategy and their operations.

“According to the strategic objectives assumed by the Paris Agreement and the Green Deal, there is a need to accelerate the real commitment to sustainability, materialized in high-impact actions such as the sustainable transformation of the business model or the implementation of robust ESG criteria along the value chains. In Romania, the transposition of the Corporate Sustainability Reporting Directive (CSRD) marks a new phase of the compliance effort: thousands of companies operating in our country are subject to mandatory non-financial reporting, which has its first deadlines in 2025, therefore the efficient education of stakeholders and the development of data collection and reporting capabilities are essential for the business environment,” stated Ovidiu Popescu, Partner, Deloitte Romania, Leader of the energy and sustainability practices.

Among obstacles encountered by companies in their effort to sustainably transform the business, respondents mention the lack or insufficiency of sustainable materials to support their actions (21%), as well as the need to allocate resources rather to immediate challenges (18%), such as inflation, the market effects of the pandemic and geopolitical tensions, etc.

Deloitte CxO Sustainability Report 2024 was conducted among more than 2,100 top executives from 27 countries on all continents, with the aim of analyzing developments in the attitude and actions of organizations from various industries related to climate change and the sustainable transition.

Deloitte provides industry-leading audit and assurance, tax and legal, consulting, financial advisory, and risk advisory services to nearly 90% of the Fortune Global 500® and thousands of private companies. The firm’s professionals deliver measurable and lasting results that help reinforce public trust in capital markets, enable clients to transform and thrive, and lead the way toward a stronger economy, a more equitable society and a sustainable world. Building on its 175-plus year history, Deloitte spans more than 150 countries and territories. Its objective is to make an impact that matters through its approximately 460,000 people worldwide.

Deloitte Romania is one of the leading professional services organizations in the country providing, in cooperation with Reff & Associates | Deloitte Legal, services in audit, tax, legal, consulting, financial advisory, risk advisory, business processes as well as technology services and other related services, through 3,200 professionals.