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| • | Financing change. CFOs and other business leaders are taking out loans with interest rates that are tied to their companies’ environmental or sustainability goals at unprecedented levels. Through September 16, firms in the US received nearly $84 billion in sustainability-linked loans, far surpassing the $2.5 billion taken out in 2020 over the same period. The interest rates are determined by the borrower’s ability to meet a goal like cutting carbon emissions; these types of loans let companies possibly pay less interest while also burnishing their environmental programs. [WSJ] | | | | • | Net zero or bust. As pressure mounts for companies to operate more sustainably, executives are taking on climate change with increasing urgency. The number of companies pledging to reduce carbon emissions to net zero by century’s end—with most aiming for 2050—increased to more than 1,500 in 2020, tripling the number from the previous year. According to a recent survey of 450 companies in Europe, the US, and Asia, more than 60% are considering linking executive pay to environmental targets in 2021. [Fast Company] | | | | • | Why it matters. Sustainability has become an issue of strategic and operational importance for most companies, and not just an issue of compliance. However, few companies have an organizational structure designed to treat sustainability as a material business issue. To get sustainability programs right, leaders need to include sustainability as a core component of corporate strategy. | | | | • | Big decisions. Companies have big decisions to make as they respond to increasing sustainability concerns. Many organizations are struggling with the differences between sustainability and other business issues, decision-making and governance processes, and even employee and leader mindsets. See our article for four ways leaders can guide their companies to manage risks, capture opportunities, and meet stakeholder expectations related to sustainability. | | | | — Edited by Belinda Yu | | This email contains information about McKinsey’s research, insights, services, or events. By opening our emails or clicking on links, you agree to our use of cookies and web tracking technology. For more information on how we use and protect your information, please review our privacy policy. | | You received this email because you subscribed to the On Point newsletter. | | | | Copyright © 2021 | McKinsey & Company, 3 World Trade Center, 175 Greenwich Street, New York, NY 10007 | | | |
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