Over the last year, global executives have faced a number of challenges, including economic uncertainty, geopolitical conflict, supply chain disruptions, and talent shortages. While the vast majority of CxOs surveyed share the view that the world can achieve global economic growth while also reaching climate change goals, there continues to be a gap between actions and impact as organisations are slower to implement the “needle-moving” actions that embed sustainability into the core of their strategies, operations, and cultures, according to Deloitte’s survey of more than 2,000 CxOs across 24 countries. The following deck examines how South Africa’s executives stand out from their global counterparts on key themes.

Key global findings:

When asked to rank the issues most pressing to their organisations, many CxOs rated climate change as a “top three issue,” ahead of seven others, including innovation, competition for talent, and supply chain challenges. In fact, only economic outlook ranked slightly higher. Many CxOs (61%) said climate change will have a high/ very impact on their organisation’s strategy and operations over the next three years. Some 75% said their organisations have increased their sustainability investments over the past year, nearly 20% of whom say they’ve increased investments significantly.

CxOs are highly worried about climate change but also optimistic about their climate actions:

• 62% said they feel concerned about climate change all or most of the time.
• Almost all respondents indicated their companies were negatively impacted by climate change in some way over the last year, and 82% of CxOs have been personally impacted.
• Yet, 78% feel somewhat or extremely optimistic that the world will take sufficient steps to avoid the worst impacts of climate change.

Companies are feeling broad pressure to act across stakeholder groups—from the board/management to customers to employees:

• More than half of CxOs said employee activism on climate matters has led their organisations to increase sustainability actions over the last year—24% of which said it led to a “significant” increase.
• Regulation is also influential: 65% of CxOs said the changing regulatory environment has led their organisation to increase climate action over the last year.

ORGANISATIONS ARE ACTING, BUT STRUGGLING TO MOVE THE NEEDLE

While companies are acting, they’re less likely to implement actions that demonstrate they have embedded climate considerations into their cultures and have the senior leader buy-in and influence to effect meaningful transformation.

• For example, 21% of CxOs indicate their organisations have no plans to tie senior leader compensation to environmental sustainability performance and 30% say they have no plans to lobby government for climate initiatives.
• Additionally, when asked about how serious certain groups are about addressing climate change, only 29% of CxOs said they believe the private sector is “very” serious.
• And only 46% say that ensuring a “just transition” is “extremely important” to their organisations, and the view of its importance differs greatly by region and country.

Our report further explores the disconnects between ambition, action, and impact as well as steps CxOs can take to bridge the divide and accelerate progress to a green transition.

South Africa country profile

We surveyed 55 executives in South Africa.

Climate remains a top priority despite other pressing issues

• Climate change topped the list of priority issues for CxOs in South Africa (49% called it a “top three priority” compared to 42% of global CxOs). Compared to the global average, South African CxOs ranked “global conflicts/geopolitical tensions” higher on the list of priorities.
• The importance of climate change is also seen in South African organisations’ investments over the last year: 80% have increased their sustainability investments (higher than the global average of 75%). Only 4% of South African organisations have decreased sustainability investments.

Organisations feel the impact of climate change

• 75% of South African CxOs indicate that climate change is likely to have a “high/very high” degree of impact on their companies’ strategies and operations, over the next three years, which is significantly higher than the global average of 61%.
• Nearly all respondents said the effects of climate change have negatively affected their organisations over the past year. They are more likely than the global average to feel the following negative effects of climate change: shareholder pressure, regulatory/political uncertainty, increased employee activism, resource scarcity, and increased insurance costs.

CxOs are worried about climate change but optimistic about climate action

• 93% of South African CxOs are optimistic that the world will take sufficient steps to avoid the worst impacts of climate change. Despite this optimism, 85% say they feel concerned about climate change all/most of the time.
• 87% of South African CxOs (compared to 82% of global) have been personally impacted by climate events in some way with extreme heat, water restrictions, and severe flooding the most frequently-cited issues.

Click here to see the global insights on this report - Read more

Companies feel broad pressure from stakeholder groups

• Businesses in South Africa are being pressured by their stakeholders to act on climate change at levels significantly higher than the global average. Shareholders/investors, board members, and civil society, were the top groups cited.
• The majority of South African CxOs (and a greater proportion than the global average) also say the changing regulatory environment and employee activism have increased their organisations’ sustainability actions over the last year.

Many organisations express concern about a “just transition”, but focus uneven among countries

• 75% (significantly greater than the global average of 46%) of South African executives say that a “just transition” is an extremely important factor in their companies’ sustainability efforts.
• As a result, South Africa ranks 1st among the 24 countries we polled when rating a just transition as “extremely important” and is 8 percentage points higher than 2nd ranked country.

While organisations are acting, they’re struggling to move the needle

• South African companies are more likely than the global average to be focused on increasing the efficiency of energy use, updating/relocating facilities, and developing new climate-friendly products/services, as part of their sustainability efforts. They are also more likely than the global average to indicate they are undertaking the “needle-moving” actions defined by Deloitte’s analysis.
• South African CxOs are less skeptical than the global average about the seriousness of both the private sector and government’s commitments to address climate change.

Benefits of climate strategy and obstacles that impede impact

• South African executives are seeing the greatest benefits from their sustainability efforts in the following areas: innovation around offerings and/or operations, employee recruitment and retention, and employee morale and wellbeing. Similar to the global findings, they are much less likely to see concrete financial benefits to their organisations from their current climate efforts.
• South African CxOs cite concern around alienating customers, difficulty measuring impact, and lack of function/executive responsible for leading efforts as their top barriers to more climate action.