6. Everyone is part of someone else's supply chain: Some of the biggest climate change-related risks and opportunities for companies exist within their supply chains. Approximately 66 percent of respondents are discussing climate change programs with their suppliers and 36 percent of respondents are already working directly with these stakeholders to decrease the carbon in their supply chains.
7. Transparent reporting is gaining momentum: Executives and boards are acutely aware of the growing demand for more transparent reporting of climate change business strategies, initiatives and performance. Sixty four percent of respondents report greenhouse gas data in an annual corporate social responsibility or sustainability report. Of the organizations that say they report, 62 percent verify their data through an independent, third-party.
8. Executives across the board are committed to action: Two-thirds of executives surveyed have already launched an enterprise-wide climate change program and 16 percent expect to do so in the next two years.
9. The journey is challenging: Just because executives are committed, doesn't mean it's easy. Three out of four respondents indicated that they expect it to be either very challenging or challenging to execute their climate change goals in the next two years. The challenges mentioned by the executives included identifying ways to remove carbon from the supply chain, grappling with varying environmental data collection systems, engaging employees enterprise wide, and illustrating the ROI of climate change investments to a variety of internal stakeholders.
10. Investors are watching: Forty three percent of the executives believe that equity analysts are now considering climate change related factors in the valuations of their companies. An additional 21 percent believe the analysts will begin doing so in the next two to three years. This places more pressure on transparent and credible reporting of climate change initiatives.
Steve Starbuck is the Leader of Ernst & Young LLP’s Americas Climate Change and Sustainability Services. In this role Steve oversees the development and implementation of climate change and sustainability competencies throughout the U.S., Canada, and Latin America extending to clients through the firm’s core services: assurance, advisory, tax and transaction advisory services. In his 30-plus years with Ernst & Young LLP, Steve has held numerous leadership positions, including the Director of State and Local Tax for our National Tax Department.
The views expressed herein are those of the author and do not necessarily reflect the views of Ernst & Young LLP.
Image CC licensed by Dudu Viana.