DELOITTE 2023 CXO SUSTAINABILITY REPORT ACCELERATING THE GREEN TRANSITION - GERMANY
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Deloitte 2023 CxO Sustainability Report
Accelerating the Green Transition
Germany
1
2023 Deloitte CxO Sustainability Report
Global summary
01
Over the last year, global executives have faced a dle-moving” actions that embed sustainability
number of challenges, including economic uncer- into the core of their strategies, operations, and 02
tainty, geopolitical conflict, supply chain disrup- cultures, according to Deloitte’s survey of more
tions, and talent shortages. While the vast major- than 2,000 CxOs across 24 countries.
ity of CxOs surveyed share the view that the
03
The following deck examines how Germany’s
world can achieve global economic growth while
executives stand out from their global counter-
also reaching climate change goals, there contin- 04
parts on key themes.
ues to be a gap between actions and impact as
organizations are slower to implement the “nee-
05
06
07
06
08
2
2
2023 Deloitte CxO Sustainability Report
Key global findings
01
When asked to rank the issues most pressing CxOs are highly worried about climate change but Companies are feeling broad pressure to act
to their organizations, many CxOs rated climate also optimistic about their climate actions: across stakeholder groups—from the board/man- 02
change as a “top three issue,” ahead of seven agement to customers to employees:
• 62% said they feel concerned about climate
others, including innovation, competition for talent,
change all or most of the time. • More than half of CxOs said employee activ- 03
and supply chain challenges. In fact, only economic
ism on climate matters has led their organi-
outlook ranked slightly higher. Many CxOs (61%) • Almost all respondents indicated their com-
zations to increase sustainability actions over
said climate change will have a high/very impact on panies were negatively impacted by climate
the last year—24% of which said it led to a 04
their organization’s strategy and operations over change in some way over the last year, and
“significant” increase.
the next three years. Some 75% said their organ- 82% of CxOs have been personally impacted.
izations have increased their sustainability invest- • Yet, 78% feel somewhat or extremely optimis- • Regulation is also influential: 65% of CxOs said 05
ments over the past year, nearly 20% of whom say the changing regulatory environment has led
tic that the world will take sufficient steps to
they’ve increased investments significantly. their organization to increase climate action
avoid the worst impacts of climate change. 06
over the last year.
07
06
08
3
2022 Deloitte CxO Sustainability Report
Organizations are acting, but struggeling to 01
move the needle
While companies are acting, they’re less likely to
Our report further explores the disconnects 02
implement actions that demonstrate they have
embedded climate considerations into their between ambition, action, and impact as well
cultures and have the senior leader buy-in and as steps CxOs can take to bridge the divide and 03
influence to effect meaningful transformation.
accelerate progress to a green transition.
• For example, 21% of CxOs indicate their 04
organizations have no plans to tie senior leader
compensation to environmental sustainability
performance and 30% say they have no plans 05
to lobby government for climate initiatives.
• Additionally, when asked about how serious 06
certain groups are about addressing climate
change, only 29% of CxOs said they believe the
private sector is “very” serious. 07
• And only 46% say that ensuring a “just transi-
tion” is “extremely important” to their organi- 06
08
zations, and the view of its importance differs
greatly by region and country.
4
2023 Deloitte CxO Sustainability Report
01. Germany country profile
01
We surveyed 105 executives in Germany.
Germany Business Profile 02
Number of 15%
Employees 27% Revenue (USD) 03
$10B
>100K: 4%
06
Position(s) at
15% Industry
your company
5% 29% 07
responsible for CSO
climate goals 23% CEO
COO 28% 18% 15% 15% 24%
06
08
CTO/CIO
15% CFO Consumer Life Sciences and Health Care
52% CMO/CCO Energy, Resources and Industrials Technology, Media & Telecom
24% Other C-suite Financial Services
5
2023 Deloitte CxO Sustainability Report
02. C
limate remains a top priority despite
other pressing issues 01
• Climate change is one of the top issues in 02
Germany though it ranks slightly below the
global average. German CxOs place a greater 03
emphasis on economic outlook and innova-
tion.
04
• The importance of climate change is seen
in German organizations’ investments over
the last year: 76% have increased their sus- 05
tainability investments, 20% of which have
increased investments significantly. 0% of
German organizations surveyed said they
06
decreased sustainability investments.
07
06
08
6
2023 Deloitte CxO Sustainability Report
What does your organization see as the most pressing issues to focus 01
on over the next year? (rank in order of importance)
02
Economic outlook 52%
44%
Innovation 42% 03
36%
Supply chain issues 37%
33% 04
Climate change 37%
42%
Competition for talent/ 33% 05
talent pipeline issues 34%
Global conflicts/ 32%
geopolitical tensions 31% 06
Changing regulatory 30%
environment 30%
07
0% 10% 20% 30% 40% 50% 60%
06
08
% ranked in the Top 3, Germany % ranked in the Top 3, Global
7
2023 Deloitte CxO Sustainability Report
How have your sustainability investments changed over the last year? 01
60%
02
50%
40% 03
30% 56% 56% 04
20%
10%
24% 21% 20% 19%
05
3%
0% 0%
They've decreased They've remained They've increased They've increased 06
(-6% or more) about the same slightly significantly
(-5% to +5%) (6% to 19%) (20% or more)
07
Germany Global
06
08
8
2023 Deloitte CxO Sustainability Report
03. O
rganizations feel the impact of
climate change 01
• 60% of German CxOs say climate change is To what degree do you expect climate change to impact your company’s 02
likely to impact their companies’ strategies strategy and operations over the next three years?
and operations to a “high/very high” degree (selected high/very high) 03
over the next three years, which is similar to
the global average.
04
• Many German companies are already feeling
the impacts of climates change. Over half (and 60% 61%
significantly higher than the global average) 05
report being affected by resource scarcity/
cost of resources. 41% report being affected
by the regulation of emissions and changing
06
Germany Global
consumption patterns.
07
06
08
9
2023 Deloitte CxO Sustainability Report
Top climate issues already impacting companies 01
(select all that apply)
02
58% 46% 41% 43% 41% 45%
Resource scarcity/ Regulation of Changing consumption patterns 03
cost of resources emissions or preferences (e.g., impact of
climate change on customers/
clients)
04
05
39% 42% 39% 40%
Regulatory/ Cost of climate 06
political uncertainty change mitigation
07
Germany Global
06
08
102023 Deloitte CxO Sustainability Report
04. C
xOs are worried about climate change but
optimistic about climate action 01
• 60% of German CxOs are optimistic that the 02
world will take sufficient steps to avoid the
worst impacts of climate change (much lower 03
than the global average). 48% say they feel con-
cerned about climate change all or most of the
time (also lower than the global average). 04
• 81% of German CxOs (compared to 82% of
global) have been personally impacted by cli- 05
mate events in some way with extreme heat,
water restrictions, and wildfires the most
frequently-cited issues.
06
07
06
08
112023 Deloitte CxO Sustainability Report
01
Leaders who say they feel con- Leaders who are somewhat/extre- Executives who agree/strongly
cerned about climate change all or mely optimistic the world will agree the world can achieve global
most of the time take sufficient steps to avoid the economic growth while also rea- 02
worst impacts of climate change ching climate change goals
03
04
48% 62% 60% 78% 72% 84%
05
Germany Global
06
07
06
08
122023 Deloitte CxO Sustainability Report
Have you personally been impacted by any of the following in the last year? (select all that apply) 01
02
50%
03
40%
30% 04
48% 49%
20%
32%
28% 29% 05
27% 24% 27%
10% 23% 22% 22% 19% 18%
12%
0% 06
Extreme heat Water Wildfires Severe Severe More frequent Rising sea
restrictions drought flooding and powerful levels
storms 07
Germany Global
06
08
132023 Deloitte CxO Sustainability Report
05. C
ompanies feel broad pressure from
stakeholder groups 01
• Although at lower rates than the global aver- To what extent does your company feel pressure to act on climate change from 02
age, German companies are feeling pressure your stakeholders? (select all that apply, to a moderate/large extent)
from many different stakeholder groups to act 03
on climate change issues. German companies Board members/management 62%
68%
are significantly less likely (compared to the
global average) to feel pressure from employ- Consumers/clients 58% 04
68%
ees and regulators.
Shareholders/investors 57%
• A majority of German CxOs (though lower 66% 05
than the global average) say the changing 52%
Civil society (e.g., media, activists)
regulatory environment has increased their 64%
organization’s sustainability actions over the 51%
06
Employees
past year. 44% of German executives report 64%
employee activism is a cause of more sustain- Regulators/government 50%
68% 07
ability action (lower than global).
Competitors/peers 50%
59%
06
08
Banks/lenders 44%
50%
0% 10% 20% 30% 40% 50% 60% 70% 80%
Germany Global
142023 Deloitte CxO Sustainability Report
01
Leaders who selected changing regula- Leaders who selected employee acti-
tory environment as a matter that vism as a matter that slightly/signifi-
slightly/significantly increased their cantly increased their organization’s 02
organization’s sustainability action sustainability action over the last
over the last year. year.
03
04
51% 65% 44% 59%
05
06
Germany Global
07
06
08
152023 Deloitte CxO Sustainability Report
06. S
ome organizations express concern about a “just transition”,
but focus uneven among countries 01
• Only a quarter of German CxOs say that To what extent does climate equity or ensuring a “just transition”* factor into 02
ensuring a “just transition” is extremely impor- your company’s sustainability efforts?
tant to their companies, as opposed to nearly 03
9%
half of the global executives. 23% say it’s not 23%
25%
important or they’re unfamiliar with the term.
04
• As a result, Germany ranks 23rd out of 24
countries on rating a “just transition” as
46%
extremely important. 05
Germany 45% Global
06
52%
Extremely important Extremely important 07
Somewhat important Somewhat important
Not important/Not familiar Not important/Not familiar
06
08
A just transition seeks to ensure that the substantial benefits of transitioning to a green economy are shared widely, while
*
also supporting those who stand to lose economically—whether countries, regions, industries, communities, workers, or
consumers
162023 Deloitte CxO Sustainability Report
Countries most likely to see this issue as extremely important 01
02
75% 67% 66% 62% 61% Germany ranks 23rd among countries
03
rating a “just transition” as extremely
0%
South Africa Brazil UAE China Japan important
04
Countries less likely to see this issue as extremely important
05
20% 25% 27% 27% 31%
0% 06
Iceland Germany Norway Switzerland US
07
06
08
172023 Deloitte CxO Sustainability Report
07. While organizations are acting, they’re struggling
to move the needle 01
• German companies are more likely than the 02
global average to be using more sustainable
materials and reducing air travel. They are less 03
likely than the global average to be under-
taking some of the “needle-moving” actions
defined by Deloitte’s analysis, including tying 04
executive compensation to sustainability
performance and incorporating climate con-
05
siderations into lobbying.
• German CxOs are even more skeptical than
the global average about the seriousness of
06
the private sector and governments’ commit-
ments to address climate change.
07
06
08
182023 Deloitte CxO Sustainability Report
Which of following actions/adaptations has your company already undertaken as part 01
of its the sustainability efforts? (select all that apply)
Top actions taken 02
66% 55% 55% 53% 50%
Using more sustainable Reducing the amount Increasing the efficiency of Purchasing renewable Training employees 03
materials (e.g., recycled of air travel energy use (e.g., energy energy directly, contrac- on climate change
materials, lower emitting efficiency in buildings) tually or through green actions and impact
04
products, less plastic materi- certificates
al, “circular” products)
Global = 59% Global = 47% Global = 59% Global = 44% Global = 50% 05
Harder to implement, needle-moving actions*
06
50% 44% 38% 28% 24%
Developing new Requiring suppliers Updating/relocating facili- Incorporating climate Tying senior leaders’
climate-friendly and business partners ties to make them more considerations into compensation to 07
products or services to meet specific sus- resistant to climate lobbying/political environmental sustain-
tainability criteria impacts donations ability performance
06
08
Global = 49% Global = 44% Global = 43% Global = 32% Global = 33%
As defined by Deloitte’s analysis
*
192023 Deloitte CxO Sustainability Report
How serious do you think the following groups are 01
about addressing climate change?
02
19% 29% 03
said they believe the private sector
is “very” serious
04
05
11% 28%
said they believe governments 06
around the world are “very” serious
07
Germany Global
06
08
202023 Deloitte CxO Sustainability Report
08. Benefits of climate strategy and obstacles
that impede impact 01
• German CxOs see brand recognition, cus- 02
tomer satisfaction, employee morale, and
addressing climate change as the top benefits 03
of their sustainability efforts. Like the global
findings, German CxOs are much less likely
to see the more tangible financial benefits of 04
their current climate efforts.
• German CxOs cite difficulty measuring 05
impact, cost, and lack of customer demand as
their top barriers to additional climate action.
06
07
08
06
212023 Deloitte CxO Sustainability Report
I strongly believe my company’s current sustainability efforts have a 01
positive impact on the following (select top 5)
Top six benefits selected 02
53% 50% 45% 45% 41% 41%
Brand recognition Customer satisfaction Employee morale Addressing climate Long-term resilience Employee
03
and reputation (e.g., meeting client and wellbeing change and financial recruitment and
expectations) performance retention 04
Global = 52% Global = 44% Global = 42% Global = 40% Global = 37% Global = 38%
05
Bottom six
27% 27% 26% 25% 22% 22% 06
Operating margins Cost of investment Investor returns Revenue from new Asset values (e.g., Revenue from
(e.g., cost efficiency and/or addressing businesses (e.g., new intellectual property longstanding
07
and productivity) expectations offerings/geogra- and operating business
phies) assets)
Global = 33% Global = 24% Global = 31% Global = 29% Global = 25% Global = 23% 08
06
222023 Deloitte CxO Sustainability Report
Top five obstacles to driving sustainability efforts (Select top 2) 01
Difficulty measuring our 29%
24% 02
environmental impact
Too costly 24%
19% 03
Lack of customer/client demand for
20%
sustainable goods and services 12% 04
Lack of political support and action for
20%
necessary change (e.g., lack of green infra-
17% 05
structure, green investment incentives)
Lack of/competing regulatory/ 17% 06
reporting requirements 12%
0% 10% 20% 30% 40% 50% 07
Germany
Global
08
06
23Your Contact
Prof. Dr. Bernhard Lorentz
Managing Partner
Global Leader Climate Strategy
Tel: +49 151 14881437
blorentz@deloitte.de
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Issue 01/2023
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