Nitin Rakesh is the CEO and Managing Director of Mphasis and coauthor of the award-winning book “Transformation in Times of Crisis.”
Climate change is no longer a distant threat on the horizon; it is here and happening now. According to the World Meteorological Organization, “There is a 66% likelihood that the annual average near-surface global temperature between 2023 and 2027 will temporarily be more than 1.5°C above pre-industrial levels for at least one year.”
As the halfway point to achieve the U.N.’s Sustainable Development Goals (SDGs) by 2030 approaches, it would be worth asking, are we on the right track? Or are we woefully behind schedule? Senior leadership across enterprises is facing an increasingly challenging target to achieve the SDGs by 2030, but many are optimistic regarding the global response to climate change. I’ve seen that the majority of leaders are confident that carbon offsets, carbon renewal and the removal of human-made greenhouse gases from the atmosphere will avert the crisis.
There is a growing recognition of the significance of sustainability in shaping business strategies. The Deloitte 2023 CxO Sustainability Report indicates that around 61% foresee a high or very high impact of climate change on their organizations’ strategy and operations over the next three years (pg. 7). The report also states that CEOs are actively engaging in efforts to address sustainability issues within their companies, assuming a proactive role in steering their organizations toward a more sustainable future.
They are reflecting on their role in addressing the climate challenge and even taking on the role of the chief climate officer if need be. They begin with understanding how vulnerable their businesses are to the inevitable effects of climate change and factoring them in to make themselves resilient.
Achieving Sustainability Targets
In recent years, an increasing number of CEOs have assumed direct responsibility for addressing sustainability concerns. Approximately 49% of C-suite respondents in the United States reported having implemented a sustainability strategy, according to a survey conducted by the Harvard Law School Forum on Corporate Governance. Furthermore, around 69% of respondents indicated that their CEOs are personally dedicated to promoting sustainability, resulting in notable advancements in their organizations’ sustainability efforts.
As a seasoned leader in the technology industry, it is clear to me that the drive to accelerate improvements on the sustainability front is at the heart of every ethical business. There is no doubt that the collective need to strive to achieve the SDGs is becoming more urgent. I am encouraged to see that senior leadership in close partnership with employees, clients and investors is taking the lead in prioritizing and advancing sustainability goals.
Nevertheless, there is a need for greater government support to attain long-term sustainability objectives. Insufficient government support can adversely affect an enterprise’s ability to address today’s interconnected global challenges. Governments must embrace more environmentally friendly policies, such as incentivizing renewable energy and establishing a global carbon pricing system. Such measures can aid the private sector in creating a fairer and more sustainable world.
The escalating convergence of global challenges, characterized by more severe summers, intensified hurricanes, landslides and floods, compels CEOs to navigate unprecedented levels of uncertainty. While CEOs remain committed to the SDGs, there is a growing need for proactive measures to ensure their realization.
Presently, most enterprises are focused on enhancing resilience by integrating sustainability throughout various aspects of business, strengthening leadership and fostering collaboration within ecosystems. However, given the urgency of the situation, only those that can expedite these processes will effectively address the increasing instances of climate-related business challenges.
A new roadmap is imperative to achieve the SDGs and collaborate with governments to accelerate the transition to a more environmentally friendly future.
For example, in 2021, Athens, Greece, made history by becoming the first city in Europe to appoint a Chief Heat Officer. One key responsibility includes helping the city adapt “to the heatwaves and extreme weather that are striking the capital more frequently as the result of the climate emergency.”
Creating A Sustainability Strategy
The CEO’s responsibilities may include setting ambitious sustainability goals, allocating resources to sustainability initiatives and using their influence to drive change within the organization. The CEO must establish clear and ambitious goals for the company to reduce its greenhouse gas emissions and improve sustainability. These objectives must be communicated effectively to all the stakeholders, demonstrating the company’s commitment to sustainability.
Investment in renewable energy, energy efficiency improvements and waste reduction are crucial steps in reducing the company’s environmental impact. CEOs must prioritize such initiatives and allocate resources accordingly. As leaders, CEOs must promote sustainability within the company culture, provide employees with training and ensure that sustainability is at the core of decision-making processes.
CEOs must also invest in R&D to foster the development of new technologies and solutions to address climate change effectively. They should collaborate with policymakers to develop and implement policies that curb greenhouse gas emissions and mitigate the impact of climate change.
Seeking input from employees, investors, customers and suppliers is another way CEOs can align the company’s approach to climate change with the interests of its stakeholders. This helps in creating a more cohesive and effective sustainability strategy. These collective efforts demonstrate the crucial role of CEOs in driving meaningful change and positioning their companies as leaders in the fight against climate change.
Companies could enhance their preparedness for climate emergencies by either hiring meteorologists, appointing a chief climate officer or forming partnerships with meteorological service providers like the National Weather Service and the Climate Prediction Center. For example, energy companies are gravitating toward renewables in the form of hydro or solar installations and are forecasting returns.
It’s about understanding risks and identifying ways to embrace sustainability as both a competitive differentiator and a promising business model. CEOs have an important role to play in addressing climate change. They are also the bridge between the organization and investors, playing a critical role in how the goals are shaped and the resources allocated.
A CEO as a climate change officer can drive meaningful change for a sustainable future in the business world.
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