Written by Casper Pedersen, Director in ESG Advisory Services
According to KPMG’s CEO Outlook 2024, ESG remains high on the agenda for senior leadership globally – but it is far from an easy task. Executives are navigating an increasingly politicised landscape, where the demand for ESG accountability is now seen as essential for both survival and credibility. A full 76% of CEOs are willing to divest profitable parts of their business if a lack of ESG compliance threatens their reputation. ESG is, therefore, no longer just an ambition – it has become an indispensable part of doing business.
Challenges across sectors
KPMG’s latest CEO Outlook reveals that ESG challenges vary by industry, though common themes include the complexity of supply chains and the demand for transparency. In the transport and infrastructure sectors, 57% of surveyed leaders believe that ESG requirements are evolving faster than companies can keep up with. One-third of these sector leaders note that positive branding and strong customer relationships will be their primary focus in the coming years; however, decarbonising supply chains remains the biggest barrier to progress. This underlines the necessity of operational ESG strategies to achieve future goals.
In the consumer and retail sectors, ESG requirements also rank high on the agenda. Here, leaders identify the three largest barriers to achieving net zero targets as supply chain complexity, a lack of necessary technological solutions, and a broader skills gap. One of the main drivers of success in this sector is the ability to create inclusive and diverse work environments – a task that requires a talent pool reflective of the diverse consumer base.
Casper Pedersen
Director, ESG Advisory Services
KPMG in Denmark
Younger leaders have greater confidence in ESG data
One interesting insight from the CEO survey is the generational difference in approaches to ESG. Younger leaders show greater confidence in ESG data and handling external criticism – possibly due to having grown up in a digital and data-driven world. In contrast, older leaders often express concerns over CSRD audits and fear the consequences of greenwashing allegations. With 66% of CEOs reporting that they feel unprepared for an ESG review, there is a need for clear and robust processes that ensure both the quality and transparency of data. This difference in confidence is evident, as 43% of younger leaders (aged 40–49) believe their data can withstand scrutiny, compared to only 30% of leaders aged 60–69.
ESG as an exercise in transparency: from data to trust
At KPMG Denmark, we advise companies to prioritise both the areas where they excel and to be transparent about areas where solutions are still being developed. At a time when biodiversity and broader environmental goals are becoming as central to ESG work as traditional climate initiatives such as CO2 reduction, transparency is a strategic asset. By demonstrating credibility and maturity, Danish companies can not only attract more investment but also build stronger relationships with both customers and employees.
This openness is valuable not only for customer trust but also for investors. According to the KPMG Global ESG Due Diligence Study 2024, a full 70% of Nordic investors are willing to pay a premium for companies that have strong ESG data. Comparatively, this figure stands at 59% globally, underscoring a Nordic trend where ESG is integrated as a natural business parameter. Data from CEO Outlook 2024 also supports this, with 69% of leaders having adapted their climate strategy communications to meet the evolving needs of stakeholders.