• Mike Hayes, Leadership |

Many companies are likely to undergo at least some form of transformation to adapt their businesses to climate change and mitigate risk. Often this can involve shifting to new business models, as well as revamping their offerings to meet decarbonization goals and appeal to changing consumer demands for green goods and services. However, corporations may fail to achieve their net zero objectives if they don’t properly address one key factor: people.

Businesses may only realize a fully successful transition to a net zero future by mobilizing their workforces in a way never seen before.

Key objectives can no longer be centered just on financial goals, but should extend to achieving low-carbon solutions across the business. The cultural aspects of this profound change cannot be ignored, either. Three of the four key pillars of addressing climate change—policy and regulation, mobilization of capital, and innovation and technology—are all accepted as critical components of climate action. It is now time to give greater focus to the fourth, people and human capital.

In order to gain a better understanding of the underlying dynamics of people and the net zero transition, KPMG and Eversheds Sutherland surveyed more than 1,000 global executives across key sectors to obtain C-suite views on addressing climate change risk and stakeholder needs. The results detailed in the report, “Climate change and the people factor,” places people where they belong, at the heart of the climate agenda.

Companies are seriously thinking about the impact of climate on their stakeholders.

Even as organizations grapple with the challenge of climate change and its effect on their business, the survey revealed that they are keeping the impact on people in mind as well. Also, while there was a somewhat surprising degree of confidence about the availability of skills and resources, a deeper analysis suggests that preparing the workforce remains a key issue.

According to the survey, management and board directors largely understand that:

1) Companies should have a corporate strategy to decarbonize and address climate risk.

A majority of survey respondents indicated that their companies have a decarbonization plan in place. However, the survey also highlighted the substantial gap between ambitions and actions necessary to deliver on those ambitions. Part of that gap can be addressed by focusing on the people factor.

2) The transition to a low-carbon economy will likely impact portions of the workforce, resulting in job losses.

The importance of upskilling and retraining was highlighted, but there also is growing concern about the issue of “stranded people” left behind. The transition to net zero should work across a broad base of society, and corporations have a major role to play. After all, the great majority of global carbon emissions arise from corporate activity. Yet, large swaths of the workforce remain untapped. As discussed in the survey findings, corporations can use the power of the individual in a much more effective way to help achieve change. In fact, many employees are passionate about the climate agenda and want to be part of the solution.

3) The corporate response to climate change may inevitably impact all stakeholders.

There was a very strong message in the survey results that companies do care about their impact on the workforce, investors, customers, and the communities in which they live, a point of view that has only strengthened since the start of the pandemic. Executives understand the need to consider these stakeholders as part of their climate strategy.

Companies that can figure out how to successfully harness the energy and passion of their stakeholders—especially their employees—are likely to have the best chance of successfully transitioning to a net zero world.

Download the whitepaper to see the full results and analysis from the survey, and uncover ways to help put people at the center of your organization’s climate agenda.

Receive the latest ESG and KPMG IMPACT related content straight to your inbox