- Bain & Company estimates a temperature increase of 2
degrees Celsius could cut $6 trillion
from the value of the S&P 5001, in addition to
devastating environmental and social consequences
- A survey of 19,000 consumers shows roughly 60% are more
concerned about climate change than they were two years ago, often
due to personal experiences of extreme weather
- Among B2B buyers, 36% say they would leave a supplier that
doesn't meet their sustainability expectations
NEW
YORK, Sept. 9, 2024 /PRNewswire/ -- New
research from Bain & Company points to a sharp decline in CEOs'
relative prioritization of sustainability, as AI, growth,
inflation, and geopolitical uncertainty have risen to the top of
their agendas.
Slowing momentum on sustainability could come with a tangible
cost. Bain estimates a temperature increase of 2 degrees Celsius
could cut $6 trillion from the value
of the S&P 5001, in addition to the devastating
environmental and social consequences.
However, Bain's research shows companies are struggling to meet
their existing commitments. Of the companies disclosing their
progress via CDP, 30% are well behind on their Scope 1 and 2
emissions reduction goals, and almost half are behind on Scope
3.
Many companies are reassessing, adjusting, and, in some cases,
retracting their climate commitments. These are among the
findings of Bain & Company's "Visionary CEO's Guide to
Sustainability 2024," released today.
"The transition to a sustainable world is following a familiar
cycle," said Jean-Charles van den
Branden, Bain's global Sustainability practice leader. "What
began a few years ago as boundless excitement has given way to
pragmatic realism. As the challenge of meeting bold commitments
becomes clear, many companies are rethinking what is achievable and
on what timeline. But slowing progress would be a mistake. Our
research shows many sustainable technologies are likely to reach
their tipping point more quickly than expected. Forward-thinking
companies will stay the course and lead the way as a mix of new
technologies, consumer and customer behavior, and smart policy
creates valuable opportunities for their industries."
Extreme weather fueling increasing consumer concern about
climate change
Even as CEOs deal with competing priorities,
the message from consumers around the world is clear. In a Bain
survey of nearly 19,000 consumers in 10 countries, 61% of people
said their concerns about climate change have increased over the
past two years, often sparked by personal experience of extreme
weather. Consumers in Brazil,
Indonesia, and Italy—geographies
that have experienced devastating weather events in recent
months—show the most increasing concern for climate change. And
while 76% of global consumers believe a sustainable lifestyle is
important "because their actions have an impact," consumers in
Brazil (90%), Indonesia (90%), and Italy (84%) feel an even greater sense of
accountability for their own environmental footprints.
When it comes to sustainable shopping, consumers say brands and
retailers play a big role in their decision-making process. While
personal experience with extreme weather is the top reason
consumers say they decided to buy sustainable products, 35% say
they made the choice due to media articles and documentaries, 33%
attribute it to availability, and 28% credit awareness campaigns by
brands and retailers.
Bain's research points to the imperative for consumer companies
to de-average shoppers—engaging them less as a monolith and more as
a complex group of specific customer segments, prioritize packaging
that is both recycled and recyclable, and forge partnerships across
the value chain to create greater accessibility to sustainable
products.
Sustainability remains a top concern for B2B
buyers
It's not just consumers who are shopping for
sustainability. Bain's survey of 500 B2B buyers and sellers shows
sustainability is now one of corporate buyers' top three purchasing
criteria, and 36% say they would leave suppliers that don't meet
sustainability expectations. Nearly 60% say they'll be willing to
do so three years from now. Likewise, Bain's survey found nearly
50% of corporate buyers said they would pay a sustainability
premium of 5% or more today, and they expect their willingness to
pay to increase in the future.
This message seems to be getting lost on suppliers. While 85% of
suppliers say they embed some degree of sustainability in their
products and services, only 27% consider themselves very
knowledgeable about their customers' sustainability needs.
Bain outlines four steps—on customer, value, salesforce, and
pricing—suppliers can take to start selling sustainability
smarter.
Bringing AI and sustainability together to generate business
value
Consumers and customers continue to rate
sustainability as an important purchase criterion, but they often
lack a clear understanding of what makes a product or service
sustainable. Bain suggests AI can help close this gap by providing
more effective approaches to communicate about sustainable products
and propositions.
"We encourage companies to embed AI within sustainability
initiatives to fuel innovation and resilience," said van den
Branden. "But it's critical they understand and address the
potential impact of AI on their company's carbon emissions from the
outset. By embedding sustainability from the start, businesses can
lead the charge toward a greener, tech-driven future."
- The International Monetary Fund estimates the cost of capital
could rise by more than 1% in a scenario where temperature
increases by 2 degrees Celsius. Bain & Company finds that could
cut $6 trillion from the value of the
S&P 500.
Media Contacts:
Katie
Ware (New York) —
Email: katie.ware@bain.com
Gary Duncan (London) — Email: gary.duncan@bain.com
Ann Lee (Singapore) — Email: ann.lee@bain.com
About Bain & Company
Bain & Company is a global consultancy that helps the
world's most ambitious change makers define the future.
Across 65 cities in 40 countries, we work alongside our clients
as one team with a shared ambition to achieve extraordinary
results, outperform the competition, and redefine industries. We
complement our tailored, integrated expertise with a vibrant
ecosystem of digital innovators to deliver better, faster, and more
enduring outcomes. Our 10-year commitment to invest more than
$1 billion in pro bono services
brings our talent, expertise, and insight to organizations tackling
today's urgent challenges in education, racial equity, social
justice, economic development, and the environment. We earned a
platinum rating from EcoVadis, the leading platform for
environmental, social, and ethical performance ratings for global
supply chains, putting us in the top 1% of all companies. Since our
founding in 1973, we have measured our success by the success of
our clients, and we proudly maintain the highest level of client
advocacy in the industry.
View original content to download
multimedia:https://www.prnewswire.com/news-releases/ceos-prioritization-of-sustainability-has-declined-sharply-as-ai-and-inflation-now-sit-atop-their-agendas-consumers-b2b-buyers-remain-deeply-concerned-302241036.html
SOURCE Bain & Company