The top threats to business over the next five years are financial stability, supply chain disruptions and geopolitical concerns, according to new study by SK
Climate action failure and extreme weather conditions cited by just 10% of respondents
NEW YORK, August 1, 2022—As recent events confirmed a warming planet and extreme weather events are having a direct impact on nearly every economic sector worldwide, yet corporate leaders believe sustainability and climate change are low on the list of the biggest crises they currently face. What they really care about is keeping the lights on amidst rising inflation, supply chain disruptions and the ongoing impacts of the COVID pandemic, according to a new research report conducted by SK Group.
This report set out to identify the current viewpoints of sustainability as a crisis, understand how organizations have responded to emergencies in the past, and how they can best leverage their experiences with past crises to design and implement ESG programs and initiatives moving forward. The survey was fielded online and reached a total of 504 U.S. professionals with a job role of Manager or higher. Key findings of the survey included:
The top perceived threat over the next five years was financial or economic stability, cited by 51% of all respondents.
Climate action failure and extreme weather conditions were mentioned as a top threat by just 10% of respondents.
84% of respondents agree that a crisis has helped rally their people together towards a shared goal.
75% of respondents say their organization’s sustainability strategy is critical to the overall success.
SK Group, South Korea’s second-largest conglomerate, has committed to cutting 200 million tons of carbon emissions across its companies by 2030. SK, which has businesses in the semiconductor, energy and life sciences sectors, among others, is investing $52 billion in the U.S. by 2030 with the majority of new investments focused on clean energy and technologies.
Climate plays second fiddle
“Bottom-line business issues still take precedence over broader global issues, such as ESG initiatives and sustainability,” said Hyunghee Lee, President, Social Value Committee, SK SUPEX Council. “This is concerning given that climate change poses a threat to every person, organization and company. The silver lining is that businesses have become adept at adjusting to crises. If we can get more corporate leaders to understand the implications of climate inaction, we have a chance to transform industries and significantly reduce greenhouse gas emissions.”
Bouncing back from crisis
Crises impact organizations differently. About one in 10 survey
respondents said a crisis over the past five years threatened the
existence of their organization. Additionally, 41% said the event
significantly impacted the company’s ability to operate or grow.
Other crises were less severe, with 46% of respondents saying the
problem only somewhat limited the company’s ability to operate or grow.
The reality is that any crisis can have a significant impact,
dramatically changing the way most organizations and teams work. Some of
the biggest changes occurred in terms of budgets and both human and
But crises can also leave a lasting
positive impact. When businesses survive a major crisis, they can emerge
stronger and more efficient than ever before. In fact, 84% of
respondents agree that a crisis has helped rally their people together
towards a shared goal. Additionally, 70% said their organization’s
strategy implementation capabilities grew stronger as a result of the
crisis and 61% said their company is now better off than it would have
been if it had never faced the crisis.
Barriers to action
ESG and business sustainability have had a problem with turning
promises into actions because sustainability isn’t viewed as a crisis.
So what can be done to make companies better understand the connection
between climate change and economic stability?
At some point, both investors and companies will come to the
realization that being sustainable is not just good for the planet—it is
also good for the bottom line. But, again, why have so many companies
failed to take decisive action? Resistance to change is the most common
challenge experienced by organizations looking to implement
sustainability initiatives, cited by 37% of respondents. Additionally,
lack of staff resources along with employee mindset/behavior are top
concerns, cited by 31% of respondents, respectively.
Another striking finding from the study is that respondents feel that
their organization is either often or sometimes adaptable to adopting
sustainability strategies in the face of business challenges, yet only
8% feel this way consistently.
The good news is that a majority of respondents believe that
organizations bear the most responsibility for financing sustainability
programs or initiatives. Another 26% said this responsibility falls on
the government, while 12% said shareholders; only 6% believe this
responsibility falls on the customer. What’s more, 75% say their
organization’s sustainability strategy is critical to the overall
success of their business. About half of organizations have an existing
clearly defined sustainability strategy and one-third do not.
SK Group, South Korea’s second-largest conglomerate, is a collection
of global industry-leading companies driving innovations in
semiconductors, sustainable energy, telecommunications and life
sciences. Based in Seoul, SK invests in building sustainable businesses
around the world with a shared commitment to reducing global greenhouse
gas emissions and increasing the use of renewable energy.
SK companies combined have more than $106 billion in global annual
revenue and employ more than 100,000 people worldwide. SK companies are
investing billions of dollars in expanding their U.S. presence with
business operations or partnerships in hydrogen energy and fuel cells,
EV battery manufacturing and technology, energy storage solutions,
pharmaceutical manufacturing and development, semiconductors, and
advanced materials. For more information, visit sk.com.