Takeaways

• Most business leaders are concerned that a disorderly climate transition could increase costs and disrupt operations.
• Despite growing climate risks, companies continue to expand climate investments and strengthen sustainability targets.
• Business leaders are calling for stable policies, clean energy investment, and stronger international cooperation to support the transition.

A growing number of business leaders are worried that the global shift toward a low-carbon economy could become chaotic and costly if governments fail to provide clear and coordinated policy direction, according to a new survey by the World Business Council for Sustainable Development (WBCSD).

The survey, now in its third year, gathered responses from leaders representing more than 500 companies across 50 countries. Together, these businesses generate roughly $2 trillion in annual revenue. The findings suggest that concerns over a disorderly climate transition are increasing as companies face mounting economic and operational pressures linked to climate change.

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According to the report, an uncoordinated transition could lead to sudden policy changes, market instability, social disruption, and climate-related shocks. Many respondents said they are already experiencing the financial consequences of climate risks.

More than half of surveyed business leaders reported higher costs caused by supply chain disruptions. Others pointed to rising commodity prices, damage to infrastructure, and increasing insurance expenses as major challenges. These impacts are adding pressure to companies that are trying to balance growth with sustainability goals.

Peter Bakker, President and CEO of WBCSD, said the warning signs of a disorderly transition are becoming more visible. He noted that stronger coordination between governments and policymakers is needed to prevent costs from escalating further for both businesses and consumers.

Despite these concerns, companies are not pulling back from their environmental commitments. In fact, 89% of respondents said they have maintained or increased their climate investments over the past year. The survey also found that 38% of leaders strengthened their climate targets in 2025, more than double the proportion reported in the previous survey.

Businesses are increasingly investing in solutions that support both sustainability and long-term competitiveness. Respondents highlighted areas such as clean energy, electrification, circular economy initiatives, and regenerative agriculture as key priorities. Many leaders said these measures are not only helping reduce emissions but are also improving resilience and business performance.

The survey revealed that 92% of respondents expect sustainability to become a significant competitive advantage over the next five to ten years. For many companies, environmental action is no longer viewed solely as a responsibility but also as a strategic business opportunity.

When asked about the main drivers behind their sustainability strategy, 52% cited risk management, regulatory compliance, and resilience. Another 46% pointed to future growth opportunities. In North America, customer demand emerged as the strongest driver, with more than two-thirds of leaders identifying it as a key influence on sustainability decisions.

Interest in climate-related business opportunities is also rising. Around 80% of respondents said power generation and storage have become more attractive investment areas over the past year. Power transmission infrastructure and regenerative agriculture also ranked highly among sectors gaining momentum.

To support the transition, respondents called for long-term policy frameworks, incentives for producers, greater clean energy investment, and measures that stimulate market demand. Nearly nine in ten leaders also emphasized the importance of international collaboration on standards, certifications, and trade to enable private-sector transition efforts.

Also Read: Climate Transition Made Practical: WBCSD, Partners Launch Guide

The survey suggests that while companies remain committed to climate action, many believe clearer policies and stronger cooperation will be essential to avoid a costly and disruptive path toward a low-carbon future.

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Source: ESGDIVE