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Climate & Sustainability
3 minute read

The CEO’s role in navigating the climate tensions

Climate change – and the response that it demands from businesses – is the most galvanising and pressing issue of our time. While today’s CEOs face the largest ever range of well-informed, active and vocal stakeholders, the nature of climate issues are simultaneously complex, providing no clear-cut answers in sight. How can CEOs confidently execute the right leadership decisions and navigate climate tensions?

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key takeaways

Whatever the motivation – to manage risk, capitalise on opportunity, or act upon conviction and align with the broadening sentiment for action – CEOs face a once in a generation moment to meet the climate challenge, and to do so with confidence.


CEOs and their executive teams are specifically grappling with five core tensions. Common for them is their nuanced nature in which the cases rarely imply clear solutions. None the less, they all have implications and pose CEOs with serious challenges.


CEOs should create a holistic view of their climate and sustainability goals and integrate it within their overall purpose and strategy. CEOs should also integrate boards as partners on their climate action journey and use them to seek input on the most consequential of the choices.

CEOs face the climate challenge

Leadership discussions are taking on a new and more urgent tone, driven by the science, shifts in the marketplace, and heightened stakeholder expectations.

Moreover, anticipation of tighter and more exacting regulatory and reporting frameworks is sharpening leaders’ focus on the necessity and value of both immediate and longer-term action.

Because unlike other episodic challenges, we cannot expect climate change to diminish over time; we are already living a new normal whose features and demands will only sharpen and increase in intensity over time.

Five core tensions CEOs and their executive teams are grappling with

In most instances, the obstacle to action is not the intention. Instead, it is the navigation of a set of choices and tensions which define an organisation’s stance on climate action, and influence its future position, prospects, and prosperity.

The core tensions we see CEOs, their executive teams and boards grappling with are:

  1. Profit today, versus build for tomorrow
  2. Follow, versus pave the way
  3. Compete, versus collaborate
  4. Pursue incremental, versus transformational change
  5. Focus on a narrow set of stakeholder interests, versus a broader stakeholder set

Understanding the tensions is to appreciate that they are rarely a case of clear choices, but of new, nuanced questions facing CEOs. Reflecting upon the tensions and clarifying the choices they are faced with, can help CEOs make the right choices, and execute the right leadership decisions. Find further elaboration on the five core tensions in the detailed CEOs and climate action report.

Of course, the ways in which these tensions are being felt and experienced differs according to each organisation’s ambition, sector exposure, and readiness to change. Some of the tensions are more routinely navigated by CEOs in the normal course of business, while others have a distinctly climate-oriented flavour.

What does executives need to consider in order to make their sustainability transformation succesful? Explore the four keys to a succesful sustainability transformation.

Effective leadership during climate tension

To navigate these often-daunting choices effectively, CEOs should create a holistic view of their climate and sustainability goals and integrate it within their overall enterprise purpose and strategy.

As guidance to navigating the tensions, CEOs and their executive leaders should consider the following:

  • Salience and fit
  • Strategic coherence
  • Resilience and adaptability

In the navigation, no stakeholder is as important a partner to a CEO as their Board of Directors.

Teaming up with the board

In the best of worlds, CEOs and their boards will develop a shared agenda on climate pledges and related actions.

Doing so will require CEOs to consider their boards as partners on their climate action journey, as opposed to an additional stakeholder group to either be selectively listened to, or managed.

CEOs should actively seek input from their boards on the most consequential of the choices, as well as get help on weighing and reconciling differing stakeholder interests, to help the board to confirm direction with confidence.

Interested in strengthening the board’s climate mitigation strategy? Explore this report that guides the chair around decarbonisation.