Over 30% of financial services firms have opted for lower returns on climate-friendly investments - PwC’s 27th Annual Global CEO Survey

• New data shows that 41% of Financial Services (FS) firms have invested in nature-based climate solutions.

• 30% of FS CEOs now identify climate change as a crucial driver for corporate reinvention over the next three years.

• Half of FS firms are actively developing climate-friendly products in a commitment to sustainable solutions.

• Just under half of firms (46%) are focusing on upskilling their existing workforce to ensure they can meet existing and future climate-related goals.

Financial Services CEOs will accept reduced profits in support of environmentally sustainable investments, according to PwC’s 27th annual CEO Survey. The data showed that 36% of those asked said that investing in nature based climate solutions was in progress and a further 5% have completed such a transition according to the survey. 

The research based of responses from 1,117 FS CEOs within 105 countries found that despite the backdrop of withdrawals from broader ESG mutual funds and continued market  challenges from high interest rates and the macroeconomic environment , the data showed that a significant proportion of firms have taken demonstrable steps to aid in the ongoing climate transition.

Isabelle Jenkins, Leader of Financial Services at PwC UK, said:

“The industry’s pivot towards sustainability is not just about mitigating risks; it's about seizing the opportunity to lead in the creation of a sustainable future.

“Financial Services faces possibly one of its most significant challenges: how to align portfolios with the net zero transition and create a positive effect in global markets without jeopardizing returns, and many of the world’s biggest firms are still unsure how to navigate this shift. 

“However, our research shows that firms are seeking a smooth transition to decarbonisation and using their portfolios to balance climate-related goals with their duty to meet performance targets.

The willingness to accept lower returns for climate-friendly investments is a testament to the sector's commitment to making a positive impact on the planet, and continued consistency and clarity from policymakers are vital if firms' decarbonisation efforts are to make effective change.”

The research revealed that when FS CEOs were asked about the factors propelling reinvention, 19% acknowledged that, in the past five years, climate change has been a significant driver to a large or very large extent. Looking ahead, with an emphasis on proactive planning for the next three years, 30% of  respondents pointed out that climate change is expected to be a major influence on their strategic adjustments for value delivery and capture. These percentages reflect the proportion of respondents who foresee climate change having a large or very large impact on their business strategies.

Finally, just under half of firms are focusing on enhancing the skills of their existing workforce to ensure they are able to effectively navigate increasingly critical climate-related goals and targets. The finding comes as the UK's financial services sector faces an emerging green skills gap according to research from PwC's Green Jobs Barometer, launched late last year. The report, in collaboration with the Financial Services Skills Commission (FSSC) and the Aldersgate Group, found that the proportion of job vacancies in the sector that are identified as green increased from 0.26% in the 2019-2020 timeframe to 2.2% in 2022-2023, growing from a total of 4,900 jobs to 16,700. Given the scale of the green investment needed to meet Net Zero goals, in the UK and globally, this growth is expected to accelerate.

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Notes to Editors: 

PwC conducted interviews with 1,117 Financial Services CEOs in 105 countries and territories in October and November 2023. 15% from companies with >=$1B in revenue and 64% were privately owned, 36% publicly listed.