Australian companies are struggling to fully embrace sustainability as a core business strategy even though they are more concerned about climate change than their global peers, according to a survey of top corporate executives by Deloitte.

According to the Deloitte 2022 CxO Sustainability Report released Jan. 24., 86% of Australian business leaders agree there is a climate crisis. As many as 89% said they were personally impacted by a climate event in some way and 75% said their organization was very concerned about climate change.

"The business case for change is compelling and broadly accepted — Australia stands to lose $3.4 trillion by 2070 if we don't act fast, but could gain $680 billion with rapid, focused action," Deloitte said in the report. "However, there are multiple disconnects between business leaders' opinions and motivations, the actions their organizations are taking and the impact they're having."

Australia, one of the world's biggest coal producers, committed in October 2021 to achieve net-zero emissions, or the removal of all human greenhouse gas emissions from the atmosphere through reduction measures, by 2050. The Scott Morrison government said it "will act in a practical, responsible way" to deliver on its climate goals while preserving Australian jobs and generating new opportunities for industries as pressure rises on the nation to find a balance between economic growth and sustainability.

The Disconnect

Companies remain less likely to implement policies that will signify their consideration of climate issues and pursuit of more meaningful and sustainable transformations, according to the Deloitte report.

"There is a disconnect between the recognition of the need to act, and the actions that must follow," said Will Symons, Deloitte's Asia-Pacific climate and sustainability leader. "[Executives] are not yet convinced on the relationship between climate action and the core drivers of value creation — long-term revenue, margin and asset values."

Still, all but three of the more than 100 executives surveyed in Australia intend to integrate climate into their companies' strategies and operations over the next three years. As many as 89% agree immediate actions can help limit the worst effects of climate change and 74% believe the world is already at a tipping point for responding to climate change, up from 52% in early 2021.

More than 80% of the respondents identified the government and regulators as the primary motivator for climate change action.

Australian regulators have been putting in place measures to promote sustainability. In November 2021, the Australian Prudential Regulation Authority, or APRA, finalized guidelines on climate-related financial risks to assist banks, insurers and superannuation trustees in managing climate change-linked financial uncertainties. APRA also formulated a scheme to assess the climate vulnerability of Australia's largest banks: Australia and New Zealand Banking Group Ltd., Commonwealth Bank of Australia, Macquarie Group Ltd., National Australia Bank Ltd. and Westpac Banking Corp.