Over half of business leaders globally plan to increase investments in sustainability in 2024, up significantly from only a third who reported plans to do so last year, as business optimism increases, and as executives increasingly recognize the potential impact of climate disruptions to their businesses, while new government incentives help to mobilize investments in climate tech, according to a new survey released by global professional services firm Capgemini.

For the study, “Embracing a brighter future: Investment Priorities for 2024,” Capgemini Research Institute surveyed 2,000 business leaders from firms with more than $1 billion in annual revenue, across 9 industries and 15 countries.

The survey found that sustainability was one of several areas anticipated to see increased investment in 2024, as business leaders feel increasingly confident about future growth, with 56% of respondents reporting optimism about the outlook for their organizations, compared to only 42% in the prior year’s survey. Overall, 52% of organizations reported that they anticipate increasing sustainability investments this year, up from only 33% last year.

Another key factor supporting plans to increased investment is a stronger recognition of sustainability-related risks and opportunities, with Capgemini research indicating that 63% of executives agree that the business case for sustainability is clear, up significantly from only 21% in 2022. Similarly, nearly half (48%) of survey respondents said that they expect that climate change will cause the majority of operational disruptions over the next decade, and 61% reported that the lack of sustainable practices and processes will pose a long-term existential risk for their organizations.

Major government incentive programs also appear to be succeeding in driving executives’ plans for sustainability-related investments, according to the survey, with 57% of business leaders reporting that their organizations will increase investments in clean tech in the U.S. over the next 2-3 years due to the Inflation Reduction Act, and 57% also planning to increase clean tech investment in the EU due to the Green Deal Industrial Plan.

Beyond incentives, the survey also found an impact on government policy on sustainability considerations and investment in other areas, including 52% of organizations that reported that they are nearshoring their supply chains to meet stricter ESG regulations, such as the EU’s Corporate Sustainability Due Diligence Directive (CSDDD), or the U.S.’s Uyghur Forced Labor Prevention Act (UFLPA).

Aiman Ezzat, Chief Executive Officer at Capgemini, said:

“Business leaders are beginning the year with an increased sense of confidence compared to 12 months ago, with technology and AI set to drive the next phase of the transition towards a more digital and sustainable global economy. It is good news that business leaders are increasing investments in a wide array of critical business areas from customer experience and innovation to talent and supply chains, and perhaps even more importantly sustainability.”

Click here to access the survey.