Climate change remains a top issue for global business leaders in the C suite, surpassing political uncertainty, competition for talent, and the changing regulatory environment, among others, with 85% of CxOs saying they’ve increased investments in sustainability in the past year, according to a report by Deloitte.

That’s up from 75% in 2023, and half have started to implement technology solutions to help achieve their organization’s climate goals.

Some 70% of executives expect climate change to have a high or very high impact on their company’s strategies and operations over the next three years. Nearly half of CxOs (45%) say they are transforming their business model to help address climate change and sustainability in a way that is central to their organization’s strategy. In addition, half (50%) of CxOs have already begun implementing technology solutions to help achieve climate or environmental goals, with another 42% expecting to undertake this work in the next two years.

Deloitte’s CxO Sustainability Report surveyed over 2,100 CxOs from 27 countries and found business leaders are simultaneously optimistic and concerned about climate change. While investments, action and innovation are each trending upward, more work needs to be done to help drive progress.

“It’s encouraging to see the notable increased investment in sustainability efforts in this year’s data along with the focus on using technology as a catalyst to advance climate solutions,” said Deloitte Global CEO Joe Ucuzoglu in a statement Wednesday. “We are seeing more organizations looking to transform their core business models to address climate change, leverage climate action to drive innovation and growth, create new value for their stakeholders, and differentiate themselves from their competitors.”

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CxOs ranked keeping up with the pace of innovation (including generative artificial intelligence) as their most pressing challenge over the next year. Among those already using technology to bolster their sustainability efforts, more than half said they’re doing so to develop more sustainable products and services. Therefore, CxOs said innovation around their offerings and/or operations is the top expected benefit of sustainability efforts in the next five years (38%). 

Executives are realizing the business benefits, with an overwhelming majority (92%) believing their company can grow while reducing greenhouse gas emissions. Leaders also reported a shift this year toward seeing more direct environmental and business impact of their sustainability efforts. 

Supply chain efficiency and/or resilience (37%) and operating margins (37%) were among the top five benefits of taking climate action this year, just two percentage points behind the top-ranking benefit (addressing climate change) and edging out less-tangible benefits like brand recognition and reputation.

CxOs ranked the ability to recruit and retain talent as a top three benefit to improved sustainability over the next five years — aligning with the sentiments of younger talent according to Deloitte’s 2024 Gen Z and Millennial Survey, which revealed over four in 10 Gen Z people and millennials have already changed or plan to change their job or industry due to environmental impact concerns. With the transition to a low-emissions economy already transforming workforces, and with over 800 million jobs vulnerable to climate extremes and economic transition impacts, 49% of executives say they are actively preparing workers for green jobs.