Stockholm (NordSIP) – Despite an increasing cacophony of detractors across the pond, anecdotal evidence suggests that sustainability concerns remain at the forefront of business and finance leaders’ minds. In its latest CEO Outlook Pulse Survey, consultancy EY adds weight to this belief.
The report surveys 1,200 CEOs from large companies across 21 countries and five industries, as well as 300 institutional investors in 21 countries. According to the survey, 54% of CEOs globally see sustainability issues as a higher priority than they did 12 months ago.
The report also notes that only 28% of institutional investors took the same view. However, it should be noted that the phrasing might be important. Clearly, in this instance, the starting point of how sustainability fared at this time last year matters. It is possible that institutional investors were ahead of CEOs a year ago, and that it they that are being caught up to.
In the July 2023 edition of this report, EY noted that “the research found 76% of investors are willing to accept ‘a lower rate of return on investment when the target company has a beneficial impact on planet or people’. This is in stark contrast to our CEO Outlook of January 2022 when 65% of CEOs reported they had encountered resistance from investors about their sustainability transition strategy. Almost a quarter (21%) then said that investors are not showing support for long-term investment plans, or that they are fixated on quarterly earnings.”
Green Hushing, Stranded Assets and Arguing for ESG
The report notes that CEOs and investors are in broad agreement about many of the complexities in navigating sustainability issues.
Other important insights include the observation that 73% of responding CEOs noted that “companies are now ‘green-hushing’ as a response to fear of being accused of greenwashing”. 67% of institutional investors agree. 74% of CEOs report their balance sheet facing risks from stranded assets or partial impairments caused by ESG factors, such as new regulations, a perspective shared by 67% of institutional investors surveyed.
73% of CEOs reported that their management teams struggle to present a strong business case for sustainability investments that clearly outlines their financial benefits. Finally, 77% of CEOs warned that sustainability issues will increasingly impact their supply chan and ecosystem partners.
Last but not least, both CEOs (75%) and institutional investors (70%) reported that “Technology and AI hold the answer to many of the key sustainability challenges”.
The Survey
It should be noted that the survey’s focus on sustainability appears to vary. Previous iterations of this survey have seemingly not had a similar focus on sustainability, which makes tracking the progress of CEO and institutional investors’ opinions harder.
The January 2024 and October 2023 editions, for example focused heavily on artificial intelligence, and very little on sustainability, a shift from the focus on the topic displayed in the July 2023 report. No reports were available for this survey prior to July 2023.
