/ 17 March 2021

Climate change slightly more of a priority for chief executives, says Pwc survey

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Slightly more of the world’s chief executives (CEOs) put climate change on their list of concerns in 2021 compared to the year before. (Jason Alden/Bloomberg via Getty Images)

Slightly more of the world’s chief executives (CEOs) put climate change on their list of concerns in 2021 compared to the year before. This is according to the 24th edition of PwC’s annual global CEO survey, which shows that in 2021 30% of chief executives selected climate change as an extreme concern. Last year, only 24% selected climate change as a concern.

The report further notes, however, that 27% of chief executives report being “not concerned at all” or “not very concerned” about climate change. And 60% of chief executives have not yet factored climate change into their strategic risk management activities.

At a country level, the PwC results show a moderately negative correlation between exposure to natural hazards and companies’ preparedness for climate-related risk. Companies in the countries with the most exposure, which are also among the largest contributors to carbon emissions, are less likely to have embedded climate change into their overall risk management approach, the report finds.

The decarbonisation imperative is particularly challenging for certain industries and regions, the report adds.

In South Africa, the government is in the process of taking actions to force industries to curb emissions. 

These include publishing guidelines to ensure industries accurately report greenhouse gas emissions and implementing sectoral emissions targets and carbon budgets. The carbon tax will enforce the carbon budget in that sectors will be taxed at a high rate if they exceed their budget.

The PwC report also notes that in 2021 more chief executives have a positive outlook on the global economy. According to the report, 76% believe the economy will improve in the next 12 months. In 2020, only 22% expected conditions to improve.

“CEOs’ optimism also reflects momentum in vaccine development and roll-out in parts of the world,” the report reads.

“We are by no means out of the woods, but CEOs see a path forward — for the global economy, and for their own organisations.”

Chief executives’ confidence has also rebounded, with 36% saying they are “very confident” about their organisations’ prospects for revenue growth over the next 12 months. In 2019, 35% gave this answer.

In South Africa, however, business confidence fell in the first quarter of 2021. This is according to the business confidence index, calculated by Rand Merchant Bank and the Bureau of Economic Research

The index declined from 40 to 35 in the quarter. 

“This means close to seven out of 10 senior executives expressed their dissatisfaction with prevailing business conditions, up from six previously. Such low confidence levels continue to highlight the fragility of the economic recovery,” the press statement accompanying the release of the index read. 

According to the statement, confidence fell across all the five sectors covered by the index. Retail experienced the biggest decline, followed by manufacturing and new vehicle dealers. The survey was conducted in the second half of February when many Covid-19 lockdown restrictions were already lifted and disruptions because of load-shedding were less pronounced than they are currently.