The geopolitical uncertainty brought by the Ukrainian war, the continuous disruption post-COVID, and the escalation of climate change effects have pushed business leaders to put a greater focus on their sustainability agendas, according to the 12th UN Global Compact-Accenture CEO Study.
The study, released in early 2023, draws on insights from more than 2,600 CEOs across 128 countries and 18 industries, including the largest-ever sampling of executives from the Global South.
Notably, the report highlighted progress in the level of sustainability commitment of business leadership compared to 2021, because of the increased uncertainty. Business leaders now re-evaluate their investment criteria, cooperate with communities and develop innovative business models enabled by technology to drive change.
The current landscape on sustainability
Although a global awareness of the climate challenge has pushed significant progress, data show that the world seems to be off track to achieving the Sustainable Development Goals (SDGs), which were planned to be achieved by 2030.
For example, the landmark Paris Agreement sought to limit global temperature rise to 1.5° Celsius by the end of the century, but the latest UNFCCC data estimate that current climate pledges would put the world on track to reach 2.5° Celsius by 2100.
In addition, the latest Sustainable Development Goals Report 2022 showed that the climate crisis, the COVID-19 pandemic, and the geopolitical conflicts have placed the 17 SDGs in jeopardy.
Affected by global trends, the shipping industry is facing increasing pressure to improve its sustainability performance, which is characterized by a growing focus on emissions reduction, alternative fuels, environmental regulations, digitalization, and diversity challenges.
Business sustainability: Key challenges
The UNGC-Accenture study highlighted that CEOs are not only challenged by the multitude of problems they are facing, but also by the breadth of issues falling outside the traditional business sphere. According to the report, 93% of CEOs are experiencing 10 or more simultaneous challenges to their business. The top five include:
- Inflation and price volatility
- Talent scarcity
- Threats to public health
- Climate change
- Trade regulation
Moreover, 87% of the respondent CEOS feel that current levels of geopolitical instability limit the world’s ability to achieve the SDGs.
Today’s leaders face a complex, interlinked world of risks. From rising inflation, economic uncertainty, and geopolitical tensions to the pandemic, the climate crisis, and cyberattacks, they are looking for solutions to help navigate an unprecedented period of uncertainty and build resilience,
…Rob Fauber, President and CEO of Moody’s was quoted as saying in the report.
What is the role of business leaders in world’s sustainability?
According to the report, half of the CEOs believe they could play a critical role to achieve the SDGs with increased commitment and action.
- 63% are launching new products and services for sustainability
- 55% are enhancing sustainability data collection across their value chains
- 49% are investing in renewable energy sources
To build true resilience, CEOs must embed sustainability across their business – from their strategy to the workforce, supply chains, and greater ecosystems. The basic ingredients for resilience as identified by the UNGC and Accenture report are:
Recommendations and way forward for business leaders
- Adopt sustainability models: Circular economy, low carbon transportation and sustainable supply chains, digitalization and energy efficiency are successful examples that can be integrated into a shipping company’s business model in order to reduce their environmental impact.
- Conduct a sustainability risk assessment: Identify the sustainability risks that are most relevant to your company, including environmental, social, and governance risks. Evaluate the potential impacts of these risks on your business and create a plan to mitigate them. A responsible and purpose-driven maritime needs to keep up with sustainability and ESG trends, while casting the light on the opportunities and benefits of the ESG challenge, panelists in the latest SAFETY4SEA Forum agreed.
- Embed sustainability into organizational culture: This includes educating employees on sustainability issues, engaging stakeholders, and promoting sustainable practices throughout the organization.
- Collaborate with stakeholders: Sustainability challenges are complex and require collaboration across multiple stakeholders, including suppliers, customers, investors, and regulators. CEOs should engage with these stakeholders to understand their perspectives and identify opportunities for collaboration. The UNCG and Accenture report highlighted that CEOs are seeing governments, investors, and banks as increasingly driving the importance of sustainability.
- Report on sustainability performance: This should evaluate progress towards sustainability goals, identified risks, and stakeholder engagement efforts. This demonstrates transparency and accountability, which can build trust and credibility with stakeholders. The report unveiled CEOs as increasingly stepping up as sustainability advocates in their companies, with 98% agreeing that it is the role of the CEO to make the business more sustainable.
- Upskill and reskill workforce: As companies transition towards more sustainable practices, there may be a need for new skills and competencies that are not currently present in the workforce. A 74% of the CEOs interviewed in the report are upskilling/reskilling their workforce for the future labor market. Analytical thinking, creativity, and flexibility are expected to be among the top skills needed in the post-pandemic era up to 2025, according to WEF.
- Investing in employees’ mental and physical health: the report also showed that 58% of the CEOs are offering physical and/or mental wellness resources for their workforce. Health and safety are critical components of sustainability. Healthy and happy employees are more productive and engaged at work, which leads to higher productivity and efficiency for a shipping organization, which can, in turn, build trust with stakeholders. Meanwhile, higher retention rates of people help reduce the costs and disruptions associated with turnover. These factors are critical in building sustainability resilience.
EXPLORE MORE BY READING THE REPORT HERE
