The KPMG CEO Outlook series offers a unique lens on the ongoing implications of the COVID-19 pandemic and the prospects for economic recovery.
Across the trajectory of the pandemic, we’ve connected regularly with the world’s business leaders, reporting on some of the insights through our pulse surveys in July/August 2020 and January/February 2021. The 2021 CEO Outlook, our major annual survey, draws on the perspectives for the future of 1,325 CEOs across 11 major markets.
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Key Australian developments
- Business leaders in Australia and around the world foresee a ‘short and mild’ global recession in the next 6-12 months. However, CEOs are confident of a return to growth over the next three years.
- Pandemic fatigue and continued uncertainty raise the highest level of concern for Australian CEOs today.
- More than half of Australian CEOs struggle to articulate a compelling ESG story to stakeholders. But we are still ahead of the global pack on our use of company purpose, thinking on inclusion and diversity; and the benefits of gender equity.
- Australian CEOs tend to have a more aggressive digital investment agenda, designed to get first-mover advantage.
Almost all (98%) of Australian CEOs surveyed said purpose drove financial performance.
70% of Australian CEOs say they are experiencing increasing demand for ESG reporting and transparency.
77% of Australian CEOs believe that government stimulus will be needed to turbo-charge business climate change investments.
Over 80% of Australian CEOs expressed confidence in growth prospects for their company in the next three years.
Cyber, digital and supply chains
Australian CEOs nominated regulation, supply chain resilience and cyber as their key risks to growth.
It is clear that ESG issues have risen sharply up the business priority list since the pandemic began, along with the importance of corporate purpose. Purpose is closely connected to a company’s stated role in society and commits them to acting in a manner that creates long-term value for society and the planet in a sustainable manner. Customers and employees want to know what the companies they buy from or work for have society’s best interests at heart.
For Australian CEOs, corporate purpose is increasingly used as the guiding framework for key business decisions.
94% of CEOs in Australia said that following through with corporate purpose commitments will shape their capital allocation, whilst almost all (98%) of Australian leaders surveyed said purpose drove financial performance.
Having a strong corporate purpose was a key part of Australian businesses’ appeal to their workforces, with 86% of CEOs saying that purpose was a key part of their ‘employee value proposition’.
A similar number of CEOs also agreed that purpose is central to building a stronger brand reputation and better customer relationships.
Australian CEOs said their main objective was to embed their purpose into everything they do in order to create long-term value for all stakeholders.
ESG and climate
ESG and climate issues climb the priority list for Australian CEOs.
ESG issues have become a focus for Australian CEOs, with many admitting that there has been increased stakeholder pressure to build back better post COVID-19, with ESG strategies embedded into their overall business strategies.
70% of Australian CEOs say they are experiencing increasing demand for ESG reporting and transparency, with pressure coming from investors and regulators.
36% admitted they were ‘struggling to articulate a compelling ESG story’ to their stakeholders.
Climate, was top of mind for our Australian CEOs (84%) saying that the November COP 26 meeting must inject necessary urgency into the climate debate.
Australian CEOs who believed their ESG programs boosted their financial performance.
Australian leaders who believe that government stimulus will be needed to turbo-charge business climate change investments.
Confidence is back at pre-pandemic levels – despite the Delta COVID-19 variant.
Overall, Australian CEOs are confident and optimistic about growth and feel a strong connection to their purpose and are looking to drive expansion.
Whilst optimistic, Australian CEOs also identified their three top risks to growth over the next three years- those being cyber-risk; regulation, (especially tax) and fears over supply chain resilience.
Australian CEOs who are confident in their company prospects over the next three years.
Cyber, digital & supply chain
CEOs are creating a digital advantage by building a more flexible future of work and operating as part of a digital ecosystem.
The top operational priority for both CEOs in Australia and globally was enhancing digitisation and connectivity of all functional areas.
Australia’s second operational priority was around enhancing cyber security.
In addition to this, many identified that the biggest impact of COVID-19 in three years’ time will have been on supply chain resilience, with 58% of Australian CEOs saying that their supply chains had been under increasing stress over the last 18 months.
Australian CEOs who said they were well-prepared for cyber attack.
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The key issues and priorities on the minds of Australian CEOs, as revealed in KPMG’s 2021 Global CEO Outlook survey.
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