PwC’s 28th Annual Global CEO Survey

Upside from climate action 

When we asked CEOs to take stock of the financial impact of their climate-friendly investments over the last five years, we found that these moves were six times as likely to have increased revenue as to have decreased it. In addition, around two-thirds of CEOs report that climate-friendly investments have either reduced costs or had no significant impact. 

These gains and costs are not distributed equally, and the variances are driven in part by the mix of incentives and regulations in different countries. For example, around half of CEOs in Germany and France report that making climate-friendly investments over the last five years has resulted in increased costs, against only one-fifth of their US counterparts. On the flip side, CEOs in the Chinese Mainland are much more likely to report additional revenues arising from these investments (60%), as well as additional government incentives received (46%), than their counterparts in other regions of the world.

After adjusting for geography and other factors, however, we find that making climate-friendly investments is associated with higher profit margins. This finding is consistent with analysis of last year’s CEO Survey data, which showed a link between a wide variety of climate actions and stronger financial performance. Also relevant is recent Harvard Business School research (published in PwC’s strategy+business), which found faster revenue growth among firms that are transitioning their product portfolio towards climate solutions.  

Crucially, most investors are persuaded by such evidence. In the recent PwC Global Investor Survey 2024, almost 70% agreed that companies should make expenditures to address sustainability/ESG issues relevant to the business, even if it reduces near-term profitability. In addition, more than half of all CEOs globally (56%) say their personal incentive compensation is linked to sustainability metrics. The higher the percentage of CEO compensation at stake, the more revenue that’s likely to be coming from climate-friendly investments.

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