Swiss companies have increased investments in sustainability

Over the past year, companies around the world have faced many challenges - including economic uncertainties, geopolitical conflicts, supply chain disruptions, and skills shortages. Audit and advisory firm Deloitte surveyed more than 2,000 chief operating officers (CxOs) in 24 countries, including Switzerland, in 2022 about their perceptions of climate change and their companies' responses to it.

In Switzerland, climate change ranked third among the challenges: 40% of respondents named it as one of the top three priorities within a year, compared to 42% of global respondents. On their list of priorities, Swiss CxOs ranked only supply chain issues (44%) and economic uncertainties (44%) higher than climate change.

Investments for the climate increased

When it comes to investment decisions, however, climate change appears to be an important factor for Swiss companies: Overall, 75% of companies (the same as globally) have increased their investments in sustainability. 28% (globally 19%) even say their investments in this regard have increased significantly (i.e., over 20%) (see chart 1). Climate change has had a negative impact on the company in question for almost all respondents in the past year. Swiss companies feel the scarcity of resources, the costs of mitigating climate change, the regulation of emissions, and pressure from shareholders and civil society more strongly than the global average.

"There continues to be a big gap between what companies do and what they end up achieving. When it comes to embedding sustainability into the core of their strategy, products and services, operations and culture, Swiss companies are still too slow," criticizes Liza Engel, Chief Sustainability Officer and member of the Executive Board of Deloitte Switzerland. "In Switzerland, many executives are skeptical about whether society can avert the climate crisis. For far too long, they have focused on making existing business more sustainable instead of completely turning business models upside down, fully embracing sustainability and thus benefiting from the opportunities that are currently still great. Whoever succeeds in doing that owns the future."

Executives doubt seriousness

When asked about the seriousness with which the private sector is addressing climate change, only 12% of Swiss executives answered "very seriously" - globally, the figure was 29%. And in this country, only 20% rated the actions of government agencies as "very serious" - globally, the figure was 28% [see chart 2]. Similarly, on the questions of whether the worst impacts of climate change can be prevented and whether economic growth and achieving climate goals are compatible, the affirmative responses from Switzerland were significantly lower than globally. While Swiss companies feel pressure from a wide range of stakeholders to do something about climate change - the scores are lower than globally in all categories. The stakeholder groups identified by Swiss companies as most influential are the authorities, civil society and their own board of directors.

Swiss executives perceive much less pressure from activist employees or from banks than international respondents. "Companies should not underestimate the importance of the financial sector for the transition to net zero: Banks, insurance companies and asset managers are increasingly required to report in detail how many greenhouse gas emissions are associated with their financial products. These obligations increase the pressure on companies in the real economy," explains Reto Savoia, CEO of Deloitte Switzerland. "In addition, companies also rely on loans and need stringent business plans to manage the transition."

Combating mistrust and leveraging technology

When asked about the measures they have already taken, Swiss companies most frequently stated that they use energy-efficient machines (63%), generally increase energy efficiency (59%), train employees on the subject of climate change (53%) and reduce air travel (53%). Liza Engel advises companies to invest specifically in technological solutions: "Climate technology of all kinds will play a crucial role in the future. Companies need to continuously evaluate which technologies they invest in and how to use them effectively. The longer companies wait to make appropriate investments, the more expensive it will be for them in the end."

Organizations can also do something about the widespread mistrust and often expressed suspicion of greenwashing. "Companies need to ensure that relevant and reliable data is published on the measures they are taking - and that they are always up to date on regulatory requirements. Public support for policies on climate change and enforcement mechanisms against greenwashing and fraud also builds trust with customers and the public," explains Liza Engel. She further recommends involving the board of directors and ensuring that its members acquire the necessary expertise. In addition, Engel advises executives to "Influence and empower all your internal and external stakeholders. This includes, not least, suppliers."

Concern and fatalism as a wake-up call

"The concern of executives about climate change and the fatalism sometimes noted are a wake-up call for me. We must consistently continue on the path we have taken and incorporate sustainability considerations into all corporate decisions at all levels. I am convinced that the Swiss private sector has the necessary knowledge as well as the technical and financial capabilities. Thanks to our strong and innovative economy, excellent Swiss educational and research institutions, and international networking, we are ideally positioned to do so," says Reto Savoia.

Source: Deloitte