Canadian results from the IBM Institute for Business Value’s global CEO study for 2022, Own Your Impact: Practical Pathways to Transformational Sustainability, released Thursday at the company’s Think Toronto event, highlighted the fact that key focus areas for businesses have shifted over the last twelve months.
More than half (56 per cent) of Canadian chief executive officers see sustainability as their greatest challenge, up from 31 per cent last year. That’s above the overall global figure of 51 per cent. And the topic was higher on the list of external forces that will impact organizations over the next two to three years for Canadian CEOs than it was for the overall global group as well. Environmental factors ranked third for Canadians, with 45 per cent naming it, compared to fourth place and 39 per cent globally.
In Canada, only cyber risk, mentioned by 57 per cent, topped sustainability on the list of challenges. Interestingly, the overall global group ranked cyber risk number three, at 45 per cent, topped by sustainability, and regulation (mentioned by 50 per cent).
The survey was conducted with 3,000 CEOs in more than 40 countries in Q4 2021; there were 75 Canadian CEOs in the mix.
“The prioritization of the majority of Canadian CEOs around sustainability, I think, is really, really important,” said Dave McCann, president of IBM Canada, in an interview. “The other thing I thought was really interesting, taking a Canadian lens, was the correlation with the need to act in the business benefit. And I thought what was really interesting was the fact that those that are prioritizing it highly are not solely doing it because the of broader external forces and the need to, but they’re also doing it truly because of the business growth opportunity for them, and nearly half of them [47 per cent] feel like an enhanced sustainability plan will drive business outcomes, in business growth for them. So, to me, that was really challenging and really interesting.”
He noted that during the recent quarterly meeting of the Business Council of Canada, the two biggest topics for the more than 100 CEOs were also cybersecurity and sustainability.
The survey showed that an even larger number of respondents (59 per cent) this year accept responsibility for business impacts on the environment, as pressure to act mounts from stakeholders who witnessed a proliferation of corporate sustainability pledges in the last year. CEOs in Canada report receiving the greatest pressure for greater transparency around environmental sustainability from board members (79 per cent) and investors (68 per cent) – the stakeholders they tend to interact with most directly – as opposed to customers (17 per cent). Additional pressure comes from regulators (56 per cent), government (55 per cent) and ecosystem partners (52 per cent). Pressure from employees came in at a distant 12 per cent. Globally, only 72 per cent of respondents reported pressure from board members.
However, Canadian CEOs reported that they faced significant challenges when trying to achieve their sustainability goals, and most of them were not technological. Lack of insights from data (48 per cent), and unclear ROI and economic benefits (47 per cent) were the top two mentions, followed by technological barriers at 45 per cent, regulatory barriers at 41 per cent, and inadequate skills and resources at 37 per cent.
This skills shortage was an ongoing theme. Just over one-third of CEOs (35 per cent) said they had the people and skills necessary to deliver on their goals. And although sustainability is a hot topic in the industry, only 21 per cent said that their sustainability efforts had any impact on recruiting talent. McCann said that, although IBM Canada has hired 1400 people in the last six months, including a biologist, a climate data strategist, and a climate data scientist for the sustainability team, it still has around 700 open positions.
“There are two topics that I think Canadian CEOs are thinking long and hard about,” McCann said. “Number one would be going back to the labour skills point; if I look at the Canadian marketplace and the growth opportunity many of us have in the market we’re fortunate enough to be part of, skills and labour are at the center of almost every conversation. I think the majority of CEOs are looking to make a material difference, not just paying more for talent from their nearest competitor, but building talent, growing the marketplace, the ecosystem and the impact. So, I think that’s kind of top of mind. And then I also think it’s the balance of making sure we continue to defend our organizations and our country, specifically from a cyber perspective, but also from a climate perspective, and doing that in a way that continues to keep Canada’s competitiveness, and that, to me, is always a really important balance.”