DELOITTE 2022 CXO SUSTAINABILITY REPORT THE DISCONNECT BETWEEN AMBITION AND IMPACT - GERMANY
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Deloitte 2022 CxO Sustainability Report
The disconnect between ambition and impact
Germany
1
2022 Deloitte CxO Sustainability Report
Global summary
01
CxOs’ apprehensions about the planet’s climate
have increased over the last several months, as 02
has their optimism that immediate action can
make a difference. But there are multiple discon-
nects between these business leaders’ opinions
03
and motivations, the actions their organizations
are taking, and the impact they’re having, accord- 04
ing to Deloitte’s survey of over 2,000 CxOs across
21 countries.
05
The following deck examines how Germany’s
executives stand out from their global counter-
parts on key themes. 06
07
06
08
2
2
2022 Deloitte CxO Sustainability Report
Key global findings
01
Approximately two-thirds of executives say their Yet, there is a prevailing sense of optimism:
companies are very concerned about climate 88 percent agreed that with immediate action, we 02
change and 79 percent see the world at a tipping can limit the worst impacts of climate change. That
point to act—a number that was 59 percent in a figure was 63 percent eight months ago.
similar Deloitte survey taken in early 2021. Their
03
concern is influenced by the impact climate change
is already having: 04
• Almost all respondents (97%) indicated their
companies have already been negatively
05
impacted by climate change, and about half
said their operations have been affected
(e.g., disruption to business models and 06
supply networks worldwide).
• Eighty percent of CxOs have been personally
07
impacted by a climate event (e.g., extreme
heat, worsening storms, wildfires) over the
last 12 months. 06
08
• Additionally, stakeholder groups—including
regulators, shareholders, consumers, and
employees—are all adding to the pressure to
act.
3
2022 Deloitte CxO Sustainability Report
Key global findings
01
Business leaders who said they’ve taken at least four of the five most substantive Disconnects exist between ambitions,
sustainability actions serve as a model for tackling sustainability with efficiency and actions, and impacts 02
effectiveness, while reaping the benefits in return. Those actions are: While companies are acting, they are less likely to
implement actions that demonstrate they have
embedded climate considerations into their cul-
03
ture and have the senior leader buy-in and influ-
ence to effect meaningful transformation. 04
Developing new, climate-friendly Requiring suppliers and business part-
products or services ners to meet specific sustainability
Additionally, CxOs continue to struggle with the
criteria 05
short-term costs of transitioning to aV low carbon
future. The five lowest-ranked benefits of climate
strategies cited by CxOs were: revenue from both 06
longstanding and new business, asset values, cost
Updating or relocating facilities Incorporating climate considerations
of investment, and operating margins.
to make them more resistant to into lobbying and political donations
07
climate impacts
Our report further explores the disconnect
between ambition and action, as well as steps
CxOs can take to start to bridge the gap.
06
08
Tying senior leader compensation
to sustainability performance
4
2022 Deloitte CxO Sustainability Report
01. Germany country profile
01
We surveyed 105 executives in Germany.
Fig. 1 – Germany Business Profile 02
Number of
24% Revenue (USD) 03
Employees 33%
CEO
50K: 7% 17% 9% Other CXOs $5B to $9.99B >$10B
06
Position(s) at
8% Industry
your company 15%
responsible for
07
42% CSO
climate goals 20% CEO
COO 28% 21% 16% 13% 8% 14%
06
08
CTO/CIO
28% CFO Consumer Life Sciences and Health Care
54% CMO/CCO Energy, Resources and Industrials Professional Services
27% Other C-suite Financial Services Technology, Media & Telecom
5
2022 Deloitte CxO Sustainability Report
02. M
ost executives believe the world is at a tipping point for
responding to climate change 01
02
• Like global executives, concern about climate • Compared to global CxOs, German CxOs are
change has increased over the past few less likely to have been personally impacted
months for German CxOs: 77 percent of by climate events in some way over the past
03
German executives today see the world at a year (one of the lowest scores from any coun-
tipping point for responding to climate change try). However, they cite extreme heat, severe 04
compared to just 52 percent eight months flooding, and more frequent and powerful
ago. Despite the gravity of the moment, there storms as the top impacts they’ve felt.
is a prevailing sense of optimism as 76 percent 05
currently (compared to 52 percent eight
months ago) agree that with immediate 06
action, we can limit the worst impacts of
climate change.
07
06
08
6
2022 Deloitte CxO Sustainability Report
02. M
ost executives believe the world is at a tipping point for
responding to climate change 01
Fig. 2 – To what extent do you agree or disagree with the following Fig. 3 – To what extent do you agree or disagree with the 02
statements related to the environment? following statements related to the environment?
03
100% 100%
80% 80% 04
60% 60%
05
89%
40% 77% 76% 40% 78% 81%
72%
52% 52%
20% 44% 45% 20% 06
0% 0%
The world is at a With immediate action, We have already hit the I believe there is a I've been personally 07
tipping point when we can limit the worst point of no return, and it global climate impacted by climate
responding to climate impacts of climate change is too late to repair the emergency events in some way
change, and the future and move toward an damage caused by 06
08
can go either way. improved future. climate change.
Germany (Jan–Feb 2021) Germany (Aug–Sept 2021) Germany Global
72022 Deloitte CxO Sustainability Report
02. M
ost executives believe the world is at a tipping point for
responding to climate change 01
Fig. 4 – Have you been personally impacted by any of the following in the last twelve months? (select all that apply) 02
03
50%
04
40%
30% 05
49%
20% 41%
36%
29% 31%
26% 26% 06
25% 24% 23% 23%
10% 17% 16%
7%
0% 07
Extreme heat Severe More frequent and Wildfires Water shortages Severe drought Rising sea levels
flooding powerful storms
06
08
Germany Global
82022 Deloitte CxO Sustainability Report
03. R
espondents express concern and say their companies
have been affected by climate change 01
02
• German CxOs indicate their companies are Fig. 5 – How concerned is your organization Fig. 6 – To what degree do you expect climate
equally concerned about climate change com- about climate change? change to impact your company’s strategy
pared to the global average, and 50 percent and operations over the next three years?
03
of German CxOs are highly focused on 70% 5%
incorporating climate into their strategies and 60% 04
operations over the next three years.
50%
• German companies are more likely than 40% 05
global companies to feel the regulatory
30% 63% 63% 45% Germany 50%
impacts from climate change, pressure from
civil society, cost of mitigation, pressure from 20% 06
society, and resource scarcity. 10%
0%
My organization is very 07
concerned about climate change
Very high/high
06
08
Germany Moderate/some
Global Moderate/some
92022 Deloitte CxO Sustainability Report
03. R
espondents express concern and say their companies
have been affected by climate change 01
02
Fig. 7 – What are the top climate change issues already impacting your business?
(select all that apply)
03
Regulatory/political uncertainty 55%
47%
04
Pressure from civil society 48%
42%
05
Scarcity/cost of resources 46% 97% of German
39%
respondents who say their 06
Cost of climate change mitigation
40%
44%
company has already been
Operational impact of 42%
impacted by climate change 07
climate-related disasters 48%
(compared to 97% globally)
0% 10% 20% 30% 40% 50% 60% 06
08
Germany Global
102022 Deloitte CxO Sustainability Report
04. S
takeholders are pressuring companies to act; CxOs
believe government also shares responsibility 01
02
• German companies are feeling less pressure Fig. 8 – To what extent does your company feel pressure (to a large/moderate extent)to act on
to act on climate from all of their stakeholders climate change from your stakeholders? (select all that apply)
than the global average, citing regulators/
03
government and consumers/clients as their Regulators/government 68%
76%
top forces of pressure. 04
Consumers/clients/customers 67%
• They also are less likely to think their country’s 75%
national government is doing a good job 67%
Board members/management 05
mitigating the impacts of climate change com- 75%
pared to the global average. 64%
Civil society (e.g., media, activists)
72% 06
Shareholders/investors 60%
71%
55% 07
Competitors/peers
66%
Employees 54%
64% 06
08
Banks/lenders 45%
55%
0% 10% 20% 30% 40% 50% 60% 70% 80%
Germany Global
112022 Deloitte CxO Sustainability Report
04. S
takeholders are pressuring companies to act; CxOs
believe government also shares responsibility 01
02
Fig. 9 – % agree/strongly agree with the following statements related to government’s role in
mitigating climate change
03
100%
80% 04
60%
94%
05
90% 84%
40% 80%
54%
20% 41% 06
0%
It's important for my My country's national I'm more likely to vote for 07
country's national govern- government is doing a a candidate for elective
ment to play a role in good job mitigating the office who supports
mitigating the impacts of impacts of climate change actions intended to 06
08
climate change address climate change
Germany Global
122022 Deloitte CxO Sustainability Report
05. A
t a global level, there are disconnects between CxOs’
ambitions and the actions their companies are taking 01
02
• Other than developing new climate-friendly
products or services, German companies are
less likely to be implementing the tougher
03
actions defined by Deloitte’s analysis.
• In some cases (such as tying senior leaders’ 04
compensation to sustainability and updating/
relocating facilities) they are lagging the global
05
average by 9 percent or more.
06
07
06
08
132022 Deloitte CxO Sustainability Report
05. A
t a global level, there are disconnects between CxOs’
ambitions and the actions their companies are taking 01
02
Fig. 10 – Which of the following actions/adaptations has your company already undertaken as part of its sustainability efforts?
(select all that apply of up to 15 actions)
03
Top actions taken
73% 71% 66% 60% 04
Increasing the effi- Using more sustainable Use energy-efficient or Reducing the amount of
ciency of energy use materials (e.g., recycled climate-friendly machinery, air travel post-pandemic
05
materials, lower emit- technologies, and equip-
ting products) ment
Global = 66% Global = 67% Global = 57% Global = 55%
06
Harder to implement, needle-moving actions*
07
52% 40% 30% 35% 28%
Developing new Requiring suppliers Updating/relocating facili- Incorporating climate Tying senior leaders’ 06
08
climate-friendly and business partners ties to make them more considerations into compensation to
products or services to meet specific sus- resistant to climate lobbying/ political sustainability perfor-
tainability criteria impacts donations mance
Global = 49% Global = 46% Global = 44% Global = 40% Global = 37%
142022 Deloitte CxO Sustainability Report
06. B
enefits of climate strategy and obstacles that impede impact
01
• German CxOs listed brand recognition
and reputation, addressing climate change, 02
and customer satisfaction as the top three
benefits of their climate efforts. The bottom
three were all financial—revenue from new
03
businesses, operating margins, and revenue
from longstanding businesses—perhaps 04
suggesting CxOs continue to struggle with
the short-term costs of transitioning to a low
carbon future. 05
• German CxOs were more likely to cite diffi-
culty measuring environmental impact (com- 06
pared to the global average) as an obstacle to
sustainability efforts.
07
06
08
152022 Deloitte CxO Sustainability Report
07. At a global level, there are disconnects between CxOs’
ambitions and the actions their companies are taking 01
02
Fig. 11 – I strongly believe my company’s current sustainability efforts have/will have a positive impact on the following
(select all that apply)
03
Top five benefits selected
42% 42% 40% 39% 31% 04
Brand recognition Addressing climate Customer satisfaction Employee morale Employee recruit-
and reputation change (e.g., meeting client and well-being ment and retention
05
expectations)
Global = 49% Global = 43% Global = 46% Global = 42% Global = 35% 06
Bottom five
07
26% 25% 23% 22% 20%
Investor returns Cost of investment Revenue from new Operating margins Revenue from 06
08
and/or satisfaction businesses longstanding
businesses
Global = 34% Global = 30% Global = 32% Global = 430% Global = 28%
162022 Deloitte CxO Sustainability Report
07. At a global level, there are disconnects between CxOs’
ambitions and the actions their companies are taking 01
02
Fig. 12 – Top five obstacles to driving sustainability efforts (Select top 2)
Difficulty measuring our 40% 03
30%
environmental impact
Too costly 30% 04
27%
Insufficient supply of sustainable or 05
27%
low-emissions inputs 27%
Magnitude of change needed/ 25%
06
required is too large 24%
Focus on near-term business 07
23%
issues/demands from investors/ 25%
shareholders
06
08
0% 10% 20% 30% 40% 50%
Germany
Global
172022 Deloitte CxO Sustainability Report
08. Actions and characteristics that set climate leaders apart
01
• The survey revealed a group of leading organi- Fig. 13 – Leaders are more concerned* Fig. 14 – Leaders are more active*
zations—comprised of 19 percent of global % who expect 02
Average % already
CxOs—who have implemented at least 4 climate change to
undertaking
out of 5 of the “needle-moving” sustainability have a high/very 73% 15-business 73% 03
actions listed on slide 2. In Germany, high impact on
50% actions we asked 33%
15 percent of respondents are climate their org’s strate
respondents
leaders. gies over next 3 04
about
• On the other hand, those organization who years
had only implemented one or zero of these
05
leadership actions—35 percent of the global % indicating they % who plan to
and 44 percent of German organizations– are “very con 74% achieve net-zero 82%
have catching up to do. cerned” about 52% carbon emissions 50% 06
• The benefits of being a climate leader rather climate change by 2030 or before
than a lagging organization are clear, and they
07
are evident in nearly every part of our survey. 0% 20% 40% 60% 80% 100% 0% 20% 40% 60% 80% 100%
08
06
Leaders Leaders
Lagging orgs. Lagging orgs.
*Note: Graphs on this page represent Global data, not country-level data. Country-level data for leading and lagging organizations would be too small of a number to be statistically accurate. 182022 Deloitte CxO Sustainability Report
08. Actions and characteristics that set climate leaders apart
01
Fig. 15 – Leaders see greater benefits to their climate strategy*
I believe my company’s current environmental sustainability efforts 02
have/will have a positive impact on...
03
Addressing climate change 53%
33%
45% 04
Investor returns and/or satisfaction
23%
Cost of investment 40% 05
21%
Revenue from longstanding business 38%
19% 06
Revenue from new business 45%
24%
07
Innovation around offerings/ 50%
operation 29%
08
06
0% 10% 20% 30% 40% 50% 60%
Leaders
Lagging orgs.
*Note: Graphs on this page represent Global data, not country-level data. Country-level data for leading and lagging organizations would be too small of a number to be statistically accurate. 19Your Contact
Dr. Thomas Schlaak
Partner
Sustainability Services Lead Germany
Tel: +49 40 32080 4894
tschlaak@deloitte.de
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