A report by the UN Global Compact and Accenture based on insights from CEOs from across the world reveals global geopolitical challenges are hampering corporate sustainability efforts.
The latest United Nations Global Compact – Accenture CEO Study has revealed that 87% of CEOs believe that current levels of geopolitical instability will limit the world’s ability to achieve the UN SDGs.
The 12th edition of the study, based on the insights of more than 2,600 CEOs across 128 countries and 18 industries, states that the fallout of geopolitical instability “is leaving CEOs with limited confidence in multilateralism” as well as “amplifying existing pressures, such as expanding supply chain disruptions, increasing price volatility, and intensifying resource shortages”.
According to the report, this disruption is having an impact on sustainability at a corporate level, with 43% of CEOs reporting setbacks to their sustainability efforts, rising to 49% of SME CEOs and 51% of CEOs from developing countries, due to competing priorities and limited resources.
In a separate report published last November, Accenture also found that 93% of companies will miss their net zero targets unless they accelerate their efforts.
Using a non-exhaustive list of 17 global challenges, the study looked at the impact these were having on businesses, with 93% of CEOs responding their businesses were impacted by 10 or more of these challenges while 46% said that they were impacted by all 17 challenges in some capacity. These challenges include inflation and price volatility, as well as challenges that fall outside the traditional business sphere such as threats to public health climate change and air, water and land pollution.
Despite these mounting pressures, 98% of CEOs surveyed believe it is their role to make their businesses more sustainable, up 15% over 10 years, and 72% of CEOs ‘strongly agreed’ that they were accountable for their firm’s sustainability performance, up 53% over the same time period, demonstrating a strong commitment to improving corporate sustainability.
Social sustainability rising up the corporate agenda
The study reveals that the most notable change to global challenges is the growing social sustainability expectations on CEOs and their businesses. This is recognised by CEOs with 91% responding that they felt their role was to protect local communities in the regions they operated in. A further 70% of CEOs said they felt it was their role to speak out publicly on potentially divisive social issues, rising to 77% in developing countries.
Assia Riccio, founder of social enterprise Evolvin’ Women and sustainable trading platform Nia Trading, who took part in the study, said: “CEOs working in the social impact space, should engage in international speaking opportunities to respond to the issues of the moment.”
Governmental support and tools lacking
The report states that CEOs, albeit willing to take more action, want greater governmental support with 90% saying that limited support from government in building a resilient business is negatively impacting their ability to navigate current global challenges.
Respondents also criticised the short-term focus of governments which they said discouraged “finding long-term solutions for complex global challenges”, with 93% of CEOs stating that short-term pressures were limiting their ability to invest in long-term resilience actions. Of those, 22% felt this was a high-impact barrier to building a resilient business.
In addition, 87% of respondents said they needed tools for stronger scenario planning and analysis, and 91% reported that insufficient technology solutions were a barrier to building resilience in their businesses. On the issue of technology, upon a more in-depth look into conversations with CEOs the study showed that they had the tools they needed, but lacked the financial ability or people to implement these tools at scale.
Gurpreet Singh Minhas, director of Indian pharmaceutical company Harman Finotech, who also took part in the study, said: “Our ability to achieve sustainability commitments is hindered by the lack of long-term commitments from major stakeholders and policymakers, the inaccessibility of useful technology, and lack of access to affordable finance and resources.”
The majority (92%) of CEOs in the study said that despite setbacks, they still felt that the world could achieve the SDGs by 2030 but called for a new roadmap to rescue the SDGs as well as the means to measure the impact of their actions on progress towards the SDGs.
Lars Fruergaard Jørgensen, president of Danish pharmaceutical company Novo Nordisk and one of the CEOs taking part in the survey, said: “What gets measured, gets done. We should be documenting what we’re doing, whether it is in relation to progress on SDGs or ESG metrics for investment funds.”
Many of the CEOs surveyed are already making progress to embed sustainability into their business models through the launch of new products and services for sustainability, by enhancing sustainability data collection across their value chains and investing in renewable energy sources. Nearly half said they were transitioning to circular business models, and 40% said they were increasing R&D funding for sustainable innovation.
To drive further progress, the study provides a set of core initiatives CEOs should look to adopt which it says will be critical to building resilience; from establishing ambitious science-based climate targets and a nature-positive business strategy, to enhancing supply chain visibility and engagement and up-skilling and re-skilling the workforce for the green transition. It also offers a series of ‘refreshed’ CEO asks for policymakers, that build on the 2021 CEO study, which include aligning the NDCs to 1.5°C, standardising ESG reporting frameworks and enabling the circular economy.
CEO of US-based IT services company MK Partners, Matt Kaufman, said: “I want more accountability. I want regulation. I want the pressure to have businesses report on how we are meeting our goals regularly to hold us accountable.”