EU CEOs See Climate Change Risk as Fastest Growing Threat to Businesses

EU CEOs See Climate Change Risk as Fastest Growing Threat to Businesses

(IN BRIEF) EU CEOs are increasingly concerned about the threat of climate change, with 24% believing their businesses will be highly or extremely exposed to the impact of climate change within five years, according to a new survey. The survey shows that climate change now ranks as the most significant concern for EU CEOs over a five-year horizon, alongside macroeconomic risk, geopolitical conflict, inflation, and cybersecurity risks. The survey also reveals that EU CEOs are leading the way globally in implementing initiatives to reduce their companies’ emissions, with 75% implementing such initiatives. In addition, 71% of EU CEOs are introducing new climate-friendly products or processes.

(PRESS RELEASE) BRUSSELS, 21-Mar-2023 — /EuropaWire/ —Nearly a quarter (24%) of EU CEOs believe their companies will be highly or extremely exposed to the impact of climate change on a five year outlook, with a certain or high probability of significant financial loss. This compares to 14% on a one year outlook.

Just 16% of EU CEOs said they will be only minimally exposed to the impact of climate change over the next five years.

While the threat of climate change is rising significantly, exposure to other threats including inflation, macroeconomic volatility and geopolitical conflict risk are falling. As a result, climate change (24%) now ranks alongside macroeconomic risk (29%), geopolitical conflict (30%), inflation (30%) and cyber security risks (28%) as the key concerns facing the most senior business leaders over a five year time horizon.

In response to the growing threat from climate change, EU CEOs have stepped up their efforts to mitigate the impact on their businesses and are now leading the way globally, with 75% implementing initiatives to reduce their company’s emissions compared to just 59% in the US and 70% in APAC. In addition 71% of EU CEOs are introducing new climate-friendly products or processes, compared to just 50% in the US and 65% in APAC.

Andrew McDowell, Strategy & Partner, PwC Luxembourg, said: 

“Our survey shows that CEOs are increasingly aware of the threat that climate change risk poses to ‘business as usual.’ Climate change has joined the other major threats that CEOs need to address on an ongoing basis and so they are taking decisive steps to mitigate the impact by refocusing their priorities for action and investment. EU CEOs clearly recognise the scale of the challenge that lies ahead which is a really positive step forward and a reassuring sign that EU businesses are in good hands.”

Nearly two in five EU CEOs support the need for radical change in their businesses, saying that their businesses won’t be viable in ten years if they continue on their current path. More than half (57%) are concerned about labour and skills shortages, saying they will impact the profitability of their businesses to a large or very large extent over the next ten years. As a result 70% of EU CEOs are investing in upskilling their company’s workforce over the coming year.

Notes to editors

PwC surveyed 1,254 CEOs in 20 EU member states in October and November of 2022. CEOs based in Austria, Belgium, Croatia, Cyprus, Czech Republic, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Poland, Portugal, Romania, Slovenia, Spain and Sweden were surveyed.

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SOURCE: PwC