Feeling the Heat: Businesses and Consumers Move on Climate Change
Scientists have been sounding the alarm of a changing climate for decades. During that time, business leaders, politicians, and consumers have all called for action on climate change – the need to lower our energy consumption, reduce carbon emissions, reuse and recycle, and conserve and restore our natural resources.
Yet, until lately, we have seen a lot more talk than action.
Recent research suggests that business leaders and consumers now recognize the urgency of the threat and are finally starting to alter their behavior in an effort to mitigate the effects of climate change.
Business Leaders and Climate Change
Business leaders today see climate change as an urgent threat. In a recent study of over 2,000 CEOs around the world, nine in ten (89%) say that we’re in the midst of a global climate emergency. The story is very similar among CEOs in the United States, with 90% saying that climate change needs to be addressed urgently.
Indeed, climate change is profoundly affecting the global business community, with almost all CEOs surveyed (97%) saying that their company has already been impacted by it.
Climate change is transforming business operations and strategy and will continue to do so for the foreseeable future. Companies around the world are already doing a number of things in an attempt to mitigate climate change, including greater use of sustainable materials, increasing energy efficiency, reducing travel, encouraging suppliers to meet sustainability criteria, and even tying senior leaders’ compensation to environmental sustainability goals.
In another positive sign, businesses are making more sustainable products and consumers are buying them. According to a recent analysis of consumer purchase data, between 2015 and 2019, products marketed as sustainable grew nearly seven times faster than those that were not. More importantly, while sustainability-marketed products accounted for just 16% of the market in 2019, they delivered 55% of the market growth between 2015 and 2019.
Climate change will continue to be a business priority for the foreseeable future. Nearly two in three CEOs (62%) around the world expect climate change to have a high/very high impact on their company’s strategy and operations over the next three years.
While recognizing the threat that it poses, most CEOs see more upsides than downsides to addressing climate change. In fact, 85% of US CEOs believe having a climate agenda will help them attract, retain and engage talent, and 71% say that their investors support a climate agenda.
Most CEOs are optimistic that their company’s actions today can make a difference. The vast majority of global CEOs (88%) and US CEOs (86%) believe that their company can play a positive role in addressing climate change.
Consumers and Climate Change
While not as far along as business leaders, consumers are also seeing the light on climate change.
According to a 2021 survey of over 12,000 consumers around the world, the vast majority of consumers believe that climate change is real (84%) and seven in 10 (69%) say that it is extremely/very urgent to act on climate change. These numbers are comparable in the US.
However, consumers are less optimistic than business leaders about our ability to turn things around. According to another recent study, just 56% of consumers globally say that their own country is doing a good job dealing with climate change, and only 46% are confident that the actions taken by the international community will significantly reduce the effects of climate change.
Young people are especially pessimistic, with four in ten Gen Zers (39%) and Millennials (41%) globally saying it is already too late to make a difference on climate change, compared to 34% of Gen Xers and just 22% of Boomers.
Consumers are also very skeptical of empty promises and “greenwashing.” The majority of consumers globally say that, when it comes to climate change, both politicians (68%) and businesses (66%) fail to back up their promises with action.
But, this doesn’t mean consumers are giving up. While still price sensitive, and skeptical of greenwashing claims, 56% of consumers globally say that they are already changing at least some of their behavior out of concern for climate change.
The most common actions include recycling or composting, reducing energy consumption at home, avoiding food waste and reducing water usage.
Of course, it is too early to tell how much impact these actions will have and the data suggest that business and consumer actions on climate change have done little to move the needle on carbon emissions so far.
However, these recent studies suggest that we are at an inflection point on climate change. Businesses and consumers have come to consensus on the urgent threat of climate change and are finally beginning to act on their beliefs.