43% of UK business transformation projects driven by net zero

Some 43% of UK business transformation projects have been driven by net zero as 28% of UK CEOs expect to be “moderately or extremely exposed” by climate change over the next year, according to the new analysis from PwC’s 27th annual CEO Survey.

Some 24% of CEOs also expect climate change to shift the way they “create”, “deliver” and “capture” value over the next three years.

However, over a quarter (26%) stated that they have no plans for net zero transformation – so it is an area for focus.

When asked about barriers to decarbonisation, 40% of UK CEOs said that lack of demand from external stakeholders is inhibiting their company’s ability to decarbonise their business model.

This is followed closely by a lack of climate-friendly technology in their sector (38%), regulatory complexity (37%) and lower returns from climate-friendly investments (34%).

Carl Sizer, head of regions and management board sponsor for ESG at PwC UK, said: “​Meeting climate-related goals and balancing this with overall business performance remains one of the biggest and most important priorities for UK CEOs. We see the most impactful progress made when both decarbonisation and sustainability are integrated into wider business transformation plans.​

“The insights derived from carefully structured data, paired with the right technology, will help accelerate decarbonisation plans, while proving progress to stakeholders.​ Our recent Global Investor Survey showed that 93% of respondents who invest in the UK believe that corporate reporting on sustainability performance contains at least some level of unsupported claims. Ultimately, effective transformation can help deliver the transparency needed to build trust and drive awareness and action on sustainability across an organisation.”

Additionally, the survey revealed that energy remains a “key focus” for business leaders, with 85% of UK CEOs saying they have taken steps to improve energy efficiency to reduce their energy consumption.

This follows pledges from world leaders at COP28 to triple the world’s renewable energy capacity by 2030 and double the rate of energy efficiency improvement.

Sizer added: “Amidst ongoing geopolitical tensions and significant electoral activity in several regions, 2024 is set to be a bumpy year on the climate agenda with plenty to distract boards from taking action on sustainability. But the culmination of major regulatory change and failure to take action on sustainability and net zero will create both competitive and legal risk.

“A data-led, actionable strategy, positioned at the core of wider business priorities is vital in securing the commercial value of sustainability. Those business leaders that take the long view and focus on creating progress are likely to be at a significant advantage in the next few years and beyond.”