Deloitte 2024 US public sector CxO sustainability report
Measuring public sector progress on climate resilience, sustainability, and clean energy goals across federal, state, and local government
Nes Parker
Josh Sawislak
Rana Sen
Bruce Chew
Tiffany Fishman
Akash Keyal
The United States stands at the precipice of its largest-ever climate investment. Over the next decade, state and federal agencies will allocate more than US$500 billion toward strengthening climate resilience and transitioning to a low-carbon future.1
To fully leverage this unprecedented funding opportunity and achieve ambitious sustainability, climate, resiliency, and clean-energy goals (henceforth referred to as sustainability goals or objectives) outlined in the Infrastructure Investment and Jobs Act (IIJA), the Inflation Reduction Act (IRA), and recent federal executive orders, government agencies at every level are establishing climate leadership roles within their organizations.2 Leaders in these positions are tasked with spearheading ambitious sustainability-related strategies of their organization—whether those are laid out in the federal “Executive order on catalyzing clean energy industries and jobs through federal sustainability,” or on the city of Miami’s website covering climate change in the city.3
These leaders go by various titles, including chief sustainability officer, chief resilience officer, director of sustainable operations, environment director, director of energy, director of sustainability, environmental, social, and governance (ESG) coordinator, and sustainability program coordinator, among many others. Their position may represent a newly created role or an expansion of an existing role, augmented with a new focus on sustainability.
Regardless of their title or whether they occupy a newly appointed or existing position, these public officials are tasked with leading a wide variety of sustainability objectives to advance their agency’s climate action agenda and maximize the impact of this historic investment. In this study, we will simply refer to these leaders as CxOs, given the absence of a universal title across federal, state, tribal, and local government agencies.
In December 2023, the Deloitte Center for Government Insights conducted a pioneering survey of 435 public sector CxOs from federal, state, and local government agencies across all regions of the United States (figure 1). Our objective was to assess agencies’ progress on their sustainability goals while also gleaning insights into the future of climate action in government.
Executive summary
- The United States is making a historic investment in bolstering climate resilience and transitioning to a low-carbon future, with over US$500 billion slated for allocation by federal and state agencies over the next decade.4
- To maximize the impact of this historic investment, government agencies at every level are establishing climate leadership roles within their organizations.5 There is no standard title for these roles—they go by various titles, including chief sustainability officer, environment director, and energy director. For simplicity, we refer to them as CxOs throughout this report.
- To assess the progress of government agencies in implementing the sustainability, climate, equity, and clean energy goals outlined in the Infrastructure Investment and Jobs Act (IIJA), the Inflation Reduction Act (IRA), and recent federal executive orders, Deloitte conducted a pioneering survey of 435 public sector CxOs from federal, state, and local government agencies.
- Our survey results show that CxOs have a broad mandate encompassing decarbonizing operations, bolstering the agency’s climate resiliency, inculcating climate literacy in the workforce, and embedding environmental justice. Most CxOs say their agencies are on track to decarbonize at least a few operational elements. However, progress toward other sustainability objectives has been sluggish.
- Climate-execution capacity and style vary significantly by the level of government. Forty percent of local respondents say their agencies have a decentralized approach to climate action, lack a dedicated climate team, and have different departments pursuing independent initiatives, compared to 25% at the state and federal levels. While 65% of state and federal agencies have adopted a centralized execution mode, 32% of federal and just 14% of state agencies have allocated a dedicated budget to empower their climate teams.
- Most CxOs report that their agencies have either already implemented or are implementing leading management practices, including scenario-planning, performance metrics, staffing and funding levels, and evaluation mechanisms. Surprisingly, 15% of our respondents reported that their agencies do not intend to conduct routine executive reviews of progress against sustainability goals.
- More than half of CxOs at every level of government say achieving sustainability goals will enhance mission resiliency. More than 50% of state and local CxOs also say sustainability efforts will lower the cost of operations, a view shared by just 30% of federal CxOs. Federal CxOs think public well-being is the foremost benefit of achieving climate goals.
- Administrative and cultural rigidity, unclear governance frameworks, lack of institutional capacity to deliver on multiple diverse and evolving sustainability objectives, and lack of climate literacy in the workforce have been cited by CxOs as the biggest barriers to achieving sustainability goals.
- Increased R&D funding is the top ask of state and local CxOs of their agency’s leaders, whereas, for federal CxOs, it’s enhanced stakeholder engagement. Additionally, CxOs at all levels of government want their agency’s leaders to enhance collaboration with the private sector.
CxOs have a broad mandate and must assume multiple roles to propel it forward
Public sector CxOs are tasked with addressing complex problems that involve entire systems, like transportation, or those that interact with other intricate systems, like electrical power generation and storage. As such, mitigating the adverse impacts of climate change necessitates a multifaceted approach, requiring agencies to pursue multiple objectives simultaneously. To accomplish these varied goals, CxOs must assume multiple roles, coordinating with a wide range of stakeholders both within and outside their agencies to orchestrate an integrated, whole-of-agency response to climate change.
CxOs—and their agencies by extension—are pursuing multiple and diverse sustainability objectives simultaneously
Based on our survey findings, CxOs have a wide-ranging mandate that includes an imperative to decarbonize operations, bolster the resilience of agency operations and infrastructure, inculcate climate literacy in the agency workforce, shield vulnerable communities from the adverse impacts of climate change, and ensure ethical and transparent ESG reporting (figure 2).
It comes as little surprise that governments are asking their CxOs to reduce their carbon footprint, with 97% of the surveyed CxOs indicating that they have the mandate to decarbonize at least one aspect of their agency’s operations. Just 50% of the CxOs are tasked with making operations and infrastructure resilient to climate impacts, and only 43% are focused on improving climate literacy among their workforce.
While progress has been made toward decarbonizing certain aspects of operations, agencies have made less progress on other climate-related objectives—such as equity and environmental justice. Climate change affects all, but it places a disproportionate burden on marginalized communities, who often have the fewest resources to cope with its adverse effects. Despite its criticality, less than half of survey respondents report that their agencies are on track to meet their equity and environmental justice goals.
While half of the CxOs are responsible for making their operations and infrastructure climate-resilient, just over a third report that their agencies are on track to achieve this objective. Given that climate change and extreme weather events are set to become more severe in the coming years,6 a lack of climate resilience can imperil mission success. This is not to imply a lack of effort or desire on the part of agencies. Introducing and acting on new objectives is not easy for long-established organizations. One federal CxO noted “putting in place tools to track and assess progress toward sustainability goals” as their agency's biggest challenge in achieving its sustainability goals.
CxOs play a broad set of critical roles, but their primary role depends on the organizational context
CxOs’ responsibilities have evolved significantly since the role’s inception in private sector organizations. Initially centered on compliance and tracking, their role now demands a more transformative approach. CxOs are expected to fulfill four distinct roles: challenger, facilitator, executor, and steward (figure 3).7 And while all four roles are crucial in today’s landscape, CxOs may prioritize one role over the others depending on the specific goals and challenges of their agencies.
Our survey confirms this for public sector CxOs. When asked to rank the four roles, CxOs from every agency indicated that they assume all four roles but with varying degrees of emphasis based on their agency’s specific situation. For instance, 37% of local CxOs primarily assume the role of executor, focusing on the successful implementation of initiatives. Another 31% cited facilitator as their primary role. These responses don’t diminish the importance of other roles but reflect respondents’ primary focus. Meanwhile, facilitator was the most common role cited by state CxOs, with 43% prioritizing their role in integrating various initiatives into an integrated whole-of-agency response to climate change. Thirty percent of federal CxOs ranked steward as the role they play most often, more than twice the percentage of state and local CxOs (13%) who cited it as their primary role. This is perhaps understandable given that federal CxOs are more likely to have been in their positions longer and thus have already established some processes and structures, allowing or requiring them to dedicate more time to governing these previously established processes and structures.
Agencies are enhancing their institutional capacity to achieve ambitious climate targets
Thriving in a world affected by climate change could arguably necessitate significant transformations of existing practices, demanding the overhaul of many acquisition, operation, and consumption patterns. Achieving such large-scale transformations requires establishing robust governance structures and adopting management best practices. According to our survey, agencies are making progress in both areas.
Agencies are establishing governance structures and forming dedicated sustainability teams to advance their agenda
The success of climate plans hinges on the implementing agency’s ability to execute a well-conceived plan. While having a governance structure is a positive initial step, realizing ambitious plans demands additional measures, such as establishing a dedicated team to coordinate an integrated climate response and allocating a dedicated budget for climate initiatives.
Nearly 95% of respondents have a governance framework for addressing climate change in place (figure 4). Moreover, over half of agencies at all levels of government have adopted a centralized approach to climate action, establishing a singular dedicated team to spearhead initiatives.
However, the execution capacity and style vary significantly by the level of government. For instance, 40% of local CxO respondents indicated that their agencies operate in a decentralized manner, lacking a dedicated climate team and with different departments pursuing independent initiatives. In contrast, only 25% of state and federal CxOs said their agencies follow a decentralized approach.
Furthermore, there is a notable disparity between federal and state agencies regarding resource allocation. While around 65% of federal and state agencies have adopted a centralized execution mode for their climate plans, 32% of federal agencies have allocated a dedicated budget to empower their climate teams, compared to just 14% of state agencies.
“Unclear governance frameworks hamper the effective execution of sustainability practices.”
—State CxO on the biggest challenge facing their agency in achieving its sustainability goals
Government agencies tasked with executing ambitious plans are adopting several leading management practices to ensure that this unique opportunity is maximized effectively and achieves its desired outcomes. Broadly, these include scenario-planning, establishment of robust performance metrics, adequate staffing and funding levels, and evaluation mechanisms to review agency progress.
In our survey, most CxOs said their agencies have either already implemented or are in the process of implementing these best practices (figure 5). Federal agencies have slightly higher adoption rates than their state and local counterparts. Even among agencies that have not yet established these practices, most have plans to do so in the near future.
However, 15% of our respondents reported that their agencies do not intend to conduct routine executive reviews of progress against their sustainability goals, which is a crucial step to ensure that investments yield their intended impact.
“Eliminating administrative rigidity and establishing a culture of sustainability.”
—Local CxO on the biggest challenge facing their agency in achieving its sustainability goals
Continuous sustainability efforts can bolster mission resiliency while also reducing operational costs
Investments in climate resilience can significantly bolster an agency’s capacity to fulfill its missions amid various climate disruptions while also minimizing the expenses linked with such disruptions. It’s no wonder then that 57% of our respondents indicated that accomplishing sustainability objectives would fortify their agency’s mission resiliency (figure 6). Additionally, more than half of respondents identified reduced operational costs as another crucial advantage of meeting their climate-related goals.
However, notable differences emerge between federal CxOs and their state and local counterparts, particularly concerning the perception of decreased operational costs. Only 30% of federal CxOs expect to see climate action leading to cost savings, compared to 51% and 57% for state and local CxOs, respectively. Conversely, 66% of federal CxOs envision that achieving climate goals will promote public well-being, ranking it as the foremost benefit, whereas just over 40% of state and local CxOs share this perspective.
“Sustainable success requires the engagement of multiple stakeholders, including local communities, investors, employees, and customers, which becomes a challenge for us.”
—State CxO on the biggest challenge facing their agency in achieving its climate-related goals
Public sector CxOs perceive the impact of extreme weather events on operations to be moderate to high
Climate change and extreme weather events erode key capabilities and diminish the operational capacity of organizations. For governmental entities, this could result in an inability to deliver essential services, such as electricity, water, or medical aid, precisely when they are most needed by citizens.
We posed a question to our survey participants to gauge their perceptions regarding the potential impact of extreme weather events on operations over the next three years (figure 7). Subsequently, we compared these insights with data from a private sector CxO survey conducted the previous year. The most common response for government CxOs was that extreme weather events would have a moderate impact on their operations (45%). Another 23% anticipated a high impact. Interestingly, our respondents’ private sector counterparts roughly flip that perception, with 45% expecting high impact and 27% moderate impact.
There are some significant differences between federal, state, and local responses. Thirty-four percent of federal CxOs expect the impact of extreme weather events on operations to be high in the coming three years; the number drops to 25% for state CxOs and just 18% for local CxOs.
Overall, approximately 95% of government CxOs at each level anticipate that extreme weather events will exert some level of impact on operations in the next few years.
In the near future, success will hinge on continued investment, adoption of technology, and leadership support
The pursuit of sustainability goals has begun in earnest. Achieving those goals will demand effective investment of funds already identified and further investment on a significant scale by the government and the private sector. Achieving a more resilient and sustainable set of institutions and economies is also contingent upon significant innovation. According to the International Energy Agency, achieving global elimination of net carbon dioxide emissions by 2050 will necessitate technologies that are currently in their infancy.8 CxOs cannot do this on their own. Support from leadership is needed not only to ensure financial backing but also to provide adequate staffing, partnerships with industries, reduced bureaucratic barriers, and more.
Funding catalyzed by the IIJA and IRA will enable agencies to deploy multiple innovative technologies across domains
The IIJA and IRA, through historic levels of investment in renewable programs as well as grants and tax credits, have significantly accelerated the deployment of both established and emerging renewable technologies across the nation. Over the past two years, these two legislations have catalyzed US$227 billion in announced public and private investments in utility-scale solar, storage, wind, and hydrogen.9 Additionally, states offered a record US$24 billion in tax breaks in 2022 to attract renewable energy projects.10 Utility-scale solar has emerged as the primary beneficiary of this investment, receiving US$92 billion for projects spread across 38 states.11
The focus on expanding solar capacity is expected to persist in the foreseeable future, with 62% of survey respondents indicating their agencies will explore solar energy technology within the next 12 to 24 months—twice the number interested in exploring wind energy technology, which ranks second among renewable energy technologies (figure 8).
Furthermore, over 60% of survey respondents are eager to harness the potential capabilities of artificial intelligence tech to better understand climate challenges and implement effective solutions.
Agencies seek to build upon the already substantial investments in climate action
The United States—through the IIJA, the CHIPS and Science Act, the IRA, and numerous state-level endeavors—has begun funding the transition to a more sustainable, more resilient economy.12 Since its enactment in 2022, the IRA alone is estimated to have catalyzed over US$278 billion in green energy projects while also drawing substantial private investment.13 In its inaugural year, the IRA generated pledges of over US$270 billion in private investment for clean-energy projects.14
Despite the already high level of climate investment, CxOs say their agencies will further enhance climate investments in the near future. Fifty-three percent of our respondents said their agency will increase investment toward sustainability in the next 12 to 24 months. The pattern is consistent across all levels of government (figure 9).
CxOs seek support from leadership across multiple domains to enhance the efficacy of their actions
Given the magnitude of the climate change challenge, all agencies will need to significantly enhance their own capabilities and capacity while tapping into the capabilities and capacity of others to maximize their chances of success. This entails engaging with a diverse ecosystem of problem-solvers, boosting technical expertise, securing funding for ambitious solutions, and augmenting the workforce to effectively execute comprehensive climate plans. These are all areas where support from senior management can be invaluable.
We asked respondents about their top requests from senior management to enhance the effectiveness of sustainability initiatives in the next 12 to 24 months (figure 10). Over 40% of respondents at each level of government sought more collaboration with industry. However, despite its importance, enhanced collaboration with the private sector was not the top priority for any respondent group. State and local CxOs picked increasing research and development funding as their top requirement from senior management in the near future, whereas federal CxOs favored heightened stakeholder engagement as their foremost request for the next 12 to 24 months.
Interestingly, all three respondent groups did not prioritize receiving project or program funding highly among their demands from senior management despite the substantial costs associated with implementing climate adaptation and mitigation projects. This may be because large project or program funding sources have already been identified.
“Senior management must demonstrate a strong commitment to and leadership in sustainability initiatives. Without this assistance, it may be difficult for us to give sustainability a top priority and to allot the resources required to meet objectives.”
—State CxO on the biggest challenge facing their agency in achieving its sustainability goals
Moving forward
This first-ever survey of public sector CxOs aimed to map out where things stand today in the context of government agencies’ climate agenda, as well as to showcase what the future of climate action looks like. And in the process, we were able to identify some clear opportunities that these agencies can leverage. With funding secured and climate targets set, agencies need to redirect their attention toward the implementation of their climate response plans. To bolster their capacity for executing these plans, public sector agencies should contemplate the following measures:
- Empower CxOs: CxOs have the difficult task of ensuring their agencies are climate-ready, yet often lack the requisite authority to ensure their efforts succeed. Empowering CxOs by giving them a “seat at the table” when making strategic and resource-allocation decisions can provide them with the leadership support they need, as well as the requisite funding and staffing. According to our survey results, 31% of respondents want senior leadership to reduce their administrative burdens, whereas 30% want additional authority.
- Link climate action to economic growth: Climate action presents a substantial economic opportunity, with research indicating it could potentially contribute US$885 billion every year to the US GDP by 2070.15 Aligning climate action with economic opportunities can make the private sector a willing participant in a low-carbon future. To facilitate this transition, agencies should use their regulatory, standard-setting, and funding levers to incentivize private sector involvement in building a sustainable, low-carbon economy. Additionally, with the IIJA and IRA enabling agencies to explore a diverse range of innovative technologies and solutions—often in collaboration with the private sector—some of these initiatives may make a breakthrough to achieve widespread commercial success.
- Focus on equity as a principle: Government leaders can advance climate equity by proactively identifying disadvantaged communities, meaningfully engaging with stakeholders, and ensuring climate action actually benefits marginalized communities. The federal government’s Justice40 initiative mandates that a minimum of 40% of the overall benefits from pertinent federal climate investments should reach disadvantaged communities and represents a positive stride forward that other jurisdictions may also consider adopting.16 According to our survey results, 60% of our respondents have a mandate to inculcate climate equity and environmental justice.
