Corporate Change

How companies think about climate change: A McKinsey Global Survey

A McKinsey Quarterly survey finds that most executives think climate change matters for their companies. Although few have taken action, they are optimistic about the possibilities.

February 2008
Against a backdrop of rising global concern about the environment and climate change, a McKinsey Quarterly survey finds that executives view climate change issues as important for their companies, seeing both opportunity and risk.

The survey,1 which included respondents from a range of industries (some 40 percent of whom are evenly split between finance and manufacturing, with another 8 percent in energy, transport, or mining), finds that fully 60 percent of global executives view climate change as important to consider within their companies’ overall strategy.

Further, nearly 70 percent see it as an important consideration for managing corporate reputation and brands, and over half say it’s important to account for climate change in such varied areas as product development, investment planning, and purchasing and supply management. About one-third of respondents say their companies places more emphasis on climate change than on most other global trends.

Relatively few companies, however, currently appear to be translating the importance they place on climate change into corporate action. Fully 44 percent of CEOs, for example, note that climate change isn’t a significant item on their agendas.

Further, many respondents report their companies consider climate change only occasionally at best when managing corporate reputation and brands, developing new products, or even managing environmental issues. And more than one-third of global executives say their companies seldom or never factor climate change into their companies’ overall strategy. When asked how well their companies do take climate change into consideration in strategy, more than half of CEOs say somewhat well at best.

Executives are relatively optimistic when anticipating the business prospects that climate change could present. About one-third view climate change as representing an equal balance of opportunities and risks (more than the amount who see either a preponderance of risk or of opportunity). And 61 percent of respondents view the issues associated with climate change as having a positive effect on profits if managed well.

Given the considerable uncertainties around climate change regulation, it is noteworthy that more than 80 percent of global executives expect some form of climate change regulation to come to their companies’ home country within five years. Relatively few executives say their companies are likely to respond to new regulations in geographies where they operate.

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(From ; The McKinsey Quarterly , 5 March 2008)