At IBM, we believe technology, especially AI, plays a vital role in helping businesses achieve their sustainability goals in a way that is efficient and financially viable. Sustainability has become integral to corporate strategies worldwide—we see that with our clients and on a much broader scale with 76% of executives agreeing that sustainability is central to their business. Yet perceptions and priorities vary across the globe.
The State of Sustainability Readiness 2024 report is a recent comprehensive poll conducted independently by Morning Consult and sponsored, analyzed and published by IBM. The report sheds light on how different geographical areas address sustainability challenges and approach IT for sustainability investments.
The State of Sustainability Readiness 2024 report examined responses from over 2,790 business leaders spanning 9 major economies, including the US, Canada, Brazil, the UK, Germany, UAE, India, Japan and Australia. It uncovered gaps in sustainability goals and expectations between C-suite executives and VP decision-makers in nearly every region. Let’s take a look at three of the key insights it uncovered.
Overall, C-suite executives are more optimistic than their vice presidents and directors when it comes to bolstering climate resiliency. At a global level, 67% of top executives surveyed viewed their climate resiliency efforts as proactive, compared to just 56% of lower-level decision makers. This gap may come from a misalignment across the organization on sustainability goals. In some situations, these sustainability goals may not be embedded throughout the different functions in an organization, leading to a disconnect when it comes to decision-making.
This disparity, which spans topics including financial risks, physical infrastructure risks and supply chain risks, is reflected at the regional level as well. One interesting outlier is Australia. When it comes to perceived climate risk preparedness among Australian respondents, the report showed VP decision-makers displaying more confidence than their C-suite counterparts.
In Brazil, Germany and India, the C-suite is more likely to believe their company is fully prepared for finance-related climate risks than VPs and directors. In contrast, VPs and directors in Australia are more likely than C-Suite leaders to believe their company is fully prepared for supply chain climate risks.
Across the US, UK, Brazil, UAE and Japan, C-suite executives are more likely than VPs and directors to consider their company more opportunity than cost motivated to invest in sustainability. In Australia, the opposite is true; VPs and directors are more likely to consider their company more opportunity than cost driven when compared to C-suite executives.
The C-suite executives in the US, Canada, Japan and Australia are significantly more likely to consider their organization proactive in their climate resilience efforts when compared to lower-level decision makers.
The C-Suite in the US, Japan and Australia is more likely to think their organization could report on scope 3 emissions in the next 12 months than those in lower-level decision-making roles.
Gaps in perception between CEOs and VP decision-makers are more than a difference in opinion, they signal a fundamental disconnect within the organization. When leaders are not properly aligned on priorities, challenges and strengths, or are not operationalizing this properly across the business it can be difficult to make decisions about where and how much to invest in IT—and it makes it harder to align business strategy with sustainability initiatives to drive real impact.
Aside from gaps in perception, the report revealed some interesting geographic insights regarding the use of AI for sustainability. Globally, 90% believe that AI can positively impact sustainability goals. But the global average for actively using AI in the organization’s sits at 44%. In India, that average is 64%, which is higher than in any other surveyed country.
In Japan, business leaders seem to be facing an AI paralysis. Only 31% of Japanese companies currently using AI for sustainability, even when 83% of leaders expect AI to have a positive impact on achieving their organization’s sustainability goals.
About feeling equipped to use data to track sustainability goals, the report revealed that in Brazil, 7 in 10 surveyed companies are very confident in using data to track sustainability goals. This is significantly higher than the global average.
Conversely, in Germany, only 4 in 10 surveyed companies are confident about using data to track sustainability goals, demonstrating a lower level of maturity than the global average.
Whether organizations have a gap in perception between C-suite and VP decision-makers or feel they lack maturity in using data to track sustainability goals, a holistic view is crucial. Organizations must identify what’s working and not working within the company to successfully advance sustainability goals.
The IBM State of Sustainability Readiness 2024 report provides key recommendations to business leaders and organizations eager to address sustainability challenges. The report outlines the opportunity for AI powered tools. For example, these tools can help simulate climate risk scenarios such as weather or local disasters. This approach can provide the insights needed to address the climate impact and turn sustainability ambition into action.
It is clear the challenge around data still remains – one that must be addressed in order to set a foundation for sustainability transformation and to unlock the full potential of AI. The report =recommends using data to lessen the perception gap between C-suite and lower-level decision makers. As top challenges to sustainability continue to evolve, organizations should collect data from across their business to better understand the difference in perceptions between C-suite and lower-level decision makers.
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