Sustainability needs are top of mind for Sub-Saharan Africa’s CEOs
Sustainability is one of the most relevant issues of our time. In many spaces, the awareness and action of ordinary people and businesses to live and operate more sustainably is becoming increasingly noticeable, with many younger people looking for employers who align with their sustainability outlook.
Zoning in on Africa’s business landscape, data from PwC’s 27th Annual Global CEO Survey shows that business leaders across sub-Saharan Africa are constantly thinking about and frequently acting on the sustainability needs of their organisations. Globally, more governments are also implementing emissions-reduction targets and other climate resilience and social development plans, while students and younger generations of workers worldwide continue advocating for less talk and more action. The climate is changing, social expectations are changing, and along with it, governance around this is also changing.
We delve into these developments in greater detail in our newly launched Africa Business Agenda: Sustainability focus report. The report reflects the views of 380 CEOs in Sub-Saharan Africa who participated in PwC’s 27th Annual Global CEO Survey. These views are based on key factors affecting their organisation and their overall outlook on today’s business operating environment. This report focuses on how sustainability reporting can be targeted by disinformation campaigns in the face of increasing cyber risks; it assesses how macroeconomic volatility and social risks can detract from sustainability planning and action; and looks at the urgent need for greater climate action.
As cyber risks multiply, sustainability reporting could be targeted by disinformation campaigns
Cyber and technology risks, inflation, and macroeconomic volatility are identified as the top three threats that organisations worldwide will be exposed to this year, according to our Global CEO Survey. Technological disruption is certainly gaining speed, and across Africa, 31% of CEOs reported changes to their technology strategies due to transformative technology.
However, the malicious use of technology like artificial intelligence (AI) is also on the rise.
“More than half (56%) of sub-Saharan Africa CEOs surveyed believe their companies will face moderate, high, or extreme exposure to cyber risks such as disinformation, surveillance and hacking in 2024. Recent trends justify concerns about disinformation, and according to the Africa Centre for Strategic Studies, the number of active disinformation campaigns on the continent has nearly quadrupled over the past two years.”
Sustainability reporting and messaging can be a prime target for disinformation campaigns.
“Sustainability topics often involve complex scientific data and long-term projections, which require a certain level of expertise to be fully understood. This complexity can be exploited to create confusion or spread disinformation. In turn, companies need to ensure that their sustainability reporting is extremely accurate.”
Macroeconomic volatility and social risks can detract from sustainability planning and action
The global economy is under strain from multiple headwinds, with business and governments alike having to make difficult decisions on how to navigate these challenges in the short term. Eight out of ten (80%) sub-Saharan CEOs surveyed believe their organisation has moderate, high, or extreme exposure to macroeconomic volatility this year (compared to a global average of 68%).
This volatility is further fuelling a wider set of societal issues—meaning that disruption from climate change, technological developments, political uncertainty and other significant events are likely to continue to grow in 2024.
“In this type of socio-economic milieu, companies face operational and strategic challenges that could detract from sustainability priorities. In a volatile macroeconomic environment, leaders could sideline medium- to long-term sustainability priorities to rather focus on immediate and short-term operational challenges. Simply put, this means that the immediate need to keep the doors open will trump the distant goal of net zero. However, at this time, leaders should not sacrifice their organisation’s long-term strategy. Both must be included in any organisational strategy and action plan to ensure the sustainability journey is not derailed in the name of day-to-day decisions.”
The urgent need for climate action
Climate change can no longer be seen as a future risk because climate change is today’s reality. It is therefore imperative to focus on the various impacts of climate change, including physical and transition risks (and opportunities).
Half (52%) of sub-Saharan CEOs believe their companies will face moderate, high or extreme exposure to physical and transition risks associated with climate change in 2024 (compared to a global average of 39%). This indicates that business leaders in the region are very concerned about the impact of climate-associated risks on their bottom line.
“For many of us, this is not a surprise. Africa is heating up more and faster than many other regions worldwide. Every decimal degree of warming has an exponential impact on our world, and for Sub-Saharan African companies, they are not just aware of these risks but have started quantifying their financial impacts.”
Sub-Saharan Africa’s largest companies identify transition risks caused by climate change as the highest financial impact risk to their organisations. Physical risks have a smaller reported impact: this can be associated with different methodologies and systems used across organisations to quantify these risks. Fortunately, there are tools available to companies to help them understand these factors—including modern imaging technology.
Governments are changing regulations in response to disruptions like climate change
From a global perspective, this year’s most significant regulatory themes include climate change, trade policies and technology. Some 88% of sub-Saharan CEOs said regulation will have a moderate, high, or extreme impact on how their company creates, delivers and captures value in the next three years.
“Business leaders need to build the capacity within their organisations to be agile around changing government regulations. Rather than setting on a single fixed course, businesses must continually engage in scenario planning—constructing and evaluating an array of options that offer a broader view of the regulatory landscape.”
Sustainability is critical to any organisation’s operational strategy, and it helps ensure long-term economic viability amid disruptions such as cyber risks, macroeconomic changes, and climate risks.
“These disruptions not only shape an organsiation’s sustainability strategy, but also pose challenges to its implementation. For companies that neglect to integrate sustainability into their business strategy, they risk shortening their lifespan and capacity to operate for years to come.”
Explore the full report here
Africa Business Agenda: South Africa Perspective 2024
Contact us
Verena Koobair
Head of Communications and Societal Purpose Firm Pillar Lead, PwC South Africa
Tel: +27 (0) 11 797 4873
