Climate resilience

CEOs in Sub-Saharan Africa are taking a proactive approach to integrating climate considerations into business strategies with 78% initiating climate-friendly investments in the last five years

The impact of climate change in Sub-Saharan Africa is particularly pronounced, affecting agriculture, water resources and overall economic stability. Despite these challenges, a significant 49% of CEOs have reported that climate-friendly initiatives have had little to no impact on their overall business costs. This finding highlights a crucial insight highlighted in PwC’s 28th Annual Global CEO Survey: Sub-Saharan Africa perspective – Climate resilience report— investing in climate-friendly initiatives can mitigate risks, drive innovation and unlock new revenue streams.

It's not just about increasing revenues

Despite most regional CEOs reporting limited to no change in costs and revenue, these climate-friendly investments are proving valuable in other significant ways. Enhanced brand reputation, increased customer loyalty and improved regulatory compliance are among the key benefits. This trend highlights the broader impact of sustainability efforts, demonstrating that the value of these investments extends well beyond immediate financial metrics.

"It's not just about increasing revenues," says Krugel, “Even if there's no immediate change in revenue or costs, investing in climate-friendly initiatives can attract further investment and financing. These efforts also help reduce supply chain disruptions through climate risk planning and prevent potential revenue losses due to shifting customer preferences towards more sustainable products. Understanding the indirect value these investments bring is crucial for justifying the commitment, even without direct financial gains."

The upward shift in confidence is particularly meaningful given today's complex economic environment. It suggests that these business leaders see clear opportunities ahead, setting a positive foundation for their own business strategies and growth plans. Sub-Saharan Africa's optimism about global economic growth is also being driven by several key factors—among them are declining interest rates, a downward trend in inflation, improved energy security and fuel exports.

By understanding and leveraging these indirect benefits, CEOs can justify their sustainability commitments, ensuring long-term business resilience and competitiveness in a rapidly evolving market. These investments not only enhance operational efficiency but also position companies as leaders in sustainability

Barrier to climate action

Despite the urgent need for climate action, nearly 70% of Sub-Saharan Africa CEOs report minimal impact from government incentives, largely due to their limited availability across the continent. Additionally, 22% of these CEOs, compared to 15% of their global counterparts, have not embarked on climate-friendly investments. The primary barriers cited include a perceived lack of demand from external stakeholders (45%) and the complexity of regulatory frameworks (43%).

"Addressing climate change requires not only robust government incentives but also a clear and simplified regulatory environment,” says Krugel, “Without these, the perceived demand from stakeholders remains low, hindering significant progress."

What does this all really mean?

In a significant shift, CEOs across Sub-Saharan Africa are increasingly prioritising climate-related risks and opportunities within their business strategies. This trend underscores a growing recognition that sustainable practices are not merely ethical obligations but essential drivers of long-term profitability and resilience.

Despite grappling with regulatory complexities, limited access to finance and infrastructural constraints, these business leaders are making proactive investments in climate-friendly initiatives. Such investments are viewed as strategic measures to mitigate risks associated with climate change, including supply chain disruptions and regulatory penalties, while simultaneously unlocking new business opportunities.