While CEOs are optimistic about economic recovery, they might not be very concerned about climate change.
One year after COVID-19 was declared a pandemic, 76% of global business leaders predicting that economic growth will improve in 2021, said PwC recently.
The figures come from PwC’s 24th Annual Global CEO Survey, which polled 5,050 CEOs in 100 countries and territories over January and February 2021.
The percentage of CEOs expressing confidence in growth is up from 22% in 2020 and 42% in 2019, representing the highest level of optimism since the survey started asking this question in 2012.
Optimism among CEOs over global economic growth is particularly strong in North America and Western Europe, with 86% and 76% of CEOs, respectively, from these regions predicting improved global growth in the year ahead.
“CEOs now face two fundamental challenges: first, how to build trust with a broad range of stakeholders, whose expectations of business are higher than ever before; and second, how to adapt their businesses and deliver sustained outcomes in a rapidly changing external environment,” said Bob Moritz, Chairman of the PwC Network.
Organisations that get this right will be best placed to come out of the pandemic as strong, resilient and productive businesses, able to withstand future shocks, he added.
Survey highlights
- Some 36% of those polled said they are “very confident” about their organisation’s prospects for revenue growth over the next 12 months, up from 27% of CEOs in 2020.
- CEOs in the technology and telecommunications sectors show the highest levels of confidence at 45% and 43%, respectively.
- CEOs in the transportation and logistics (29%) and hospitality and leisure (27%) sectors are among the least confident about their ability to grow revenues over the next 12 months.
- The survey findings show that the US has extended its lead as the number one market that CEOs are looking to for growth over the next 12 months at 35%, seven percentage points ahead of China at 28%. In 2020, the US was only one percentage point ahead of China.
- CEOs are reducing their emphasis on China as a growth driver and increasing their focus on Canada and Mexico; compared to 2020, US CEOs’ interest in the latter two countries rose by 78%.
- China CEOs report growing interest in large economies such as the US, Germany and Japan — prime destinations for exports.
CEOs do not approach climate change with urgency
In the year of COP26, climate change is not being approached with urgency, according to the survey.
The percentage of CEOs expressing concerns about climate change has risen from 24% in 2020 to 30% in 2021.
This represents only a marginal increase in the context of COP26, which is being held this year in Glasgow, UK. The finding also comes in the context of rising anxiety about nearly all types of threats, PwC pointed out.
Climate change still only ranks ninth among CEOs’ perceived threats to growth, the firm said.
In addition, another 27% of CEOs report being “not concerned at all” or “not very concerned” about climate change.
This may be because climate change is not seen as an immediate threat to growth compared to other issues such as the pandemic, over-regulation and cyber threats, PwC said.
Meanwhile, 39% of the CEOs polled believe their organisation needs to do more to ‘measure’ their environmental impact while 43% believe their organisation needs to do more to ‘report’ on it, a greater share than any other disclosure area, survey results indicate.
However, 60% of CEOs have not yet factored climate risks into their strategic risk management activities while CEOs in countries with high exposure to natural hazards such as India and China are some of the least prepared for climate change risk, according to PwC.
Almost one third of CEOs are planning no change at all and 23% of CEOs plan to significantly increase investments in sustainability initiatives as a result of COVID-19, PwC said.
Worries about cyber threats
Pandemics and health crises top the list of threats to growth prospects, overtaking the fear of over-regulation, which has been the perennial number one concern for CEOs globally since 2014, PwC noted.
Rising digitisation is increasing the risks posed by cyber threats.
This, coupled with the significant increase in cybersecurity incidents in 2020 including ransomware attacks, has resulted in cyber threats leaping up the list to become the number two concern, cited by 47% of CEOs compared to 33% in 2020, PwC pointed out.
Cyber threats are a concern particularly for CEOs in North America and Western Europe, where they are considered a greater threat than the pandemic, survey results indicate.
