of UK CEOs say government stimulus is required to turbocharge climate investments being made by the business community.
The KPMG CEO Outlook provides unique insights into what CEOs will be prioritising to drive growth.
What it reveals is newfound levels of confidence among UK CEOs, who expect aggressive growth through acquisitions and other inorganic methods. There’s also a continued focus on digital transformation and upskilling an agile workforce.
With increased stakeholder pressure to build back better, organisations in the UK and globally are committed to investing in environmental, social and governance (ESG) priorities and staying true to their purpose. And they recognise that they need to provide greater flexibility to attract and retain talent.
Read on for the key findings or download the full report.
The road to renewal
CEOs are optimistic about growth. Confidence in growth has returned to the levels seen before the pandemic. In the UK, 83 percent of CEOs are confident about UK growth over the next three years. And 88 percent are confident about their own organisation’s growth prospects. But there are threats to overcome – with the top five identified as disruptive technology, regulatory, cyber security, supply chain and climate change risks.
There’s a strong appetite for M&A. To drive growth, 67 percent of UK CEOs say they will primarily use inorganic tactics. And almost half (48 percent) characterise their M&A appetite as ‘high’, seeking acquisitions that will have a significant impact.
Corporate purpose is key to driving that growth. Over two-thirds (69 percent) of UK CEOs say that the defining objective of their business is to embed purpose into everything they do — creating long-term value for all stakeholders. Just one in ten (11 percent) say it’s to deliver economic returns for shareholders.
UK
Rank
#1
Emerging/disruptive technology
#2
Regulatory
#2
Cyber security
#3
Supply chain
#4
Environmental/climate change
#5
Operational
Global
Rank
#1
Cyber security
#1
Environmental/climate change
#1
Supply chain
#2
Emerging/disruptive technology
#2
Regulatory
#2
Operational
Which of the following risks pose the greatest threat to your organisation’s growth over the next three years?
Source: KPMG 2021 UK CEO Outlook
Trusted purpose
There’s a focus on people. 84 percent of UK CEOs say that their response to the pandemic has seen them shift towards the ‘S’ of ESG. CEOs understand that they’ll be increasingly held responsible for driving progress on social issues, but many are concerned they’ll struggle to meet expectations.
Collaboration needed to power sustainability. Many CEOs are looking to devote significant capital to becoming more sustainable. Over a third (35 percent) of UK CEOs plan to invest more than 10 percent of revenues in their efforts. They also stress the importance of strong collaboration with government.
ESG needs connecting with digital and financial returns. CEOs are looking to drive sustainable business performance through digital innovation. Over four-fifths (81 percent) say that their digital and ESG investments are inextricably linked. But more needs to be done to connect ESG strategy with financial returns. Just 37 percent believe their ESG programmes improve financial performance.
say world leaders at COP26 must inject the necessary urgency in the climate change agenda.
of UK CEOs say that their digital and ESG investments are inextricably linked.
are seeing greater demands from stakeholders — such as investors, regulators and customers — for increased reporting and transparency on ESG issues.
Source: KPMG 2021 CEO Outlook
Digital agility
CEOs more focused on flexibility. CEOs need to decide on an operating model for the future that works for both employers and employees. Only 37 percent say that they will have a majority of employees working remotely at least two days a week, but 43 percent are looking to invest in shared office spaces.
Digital disruption is seen as more of an opportunity than a threat. Almost three-quarters (73 percent) of UK CEOs say they’re actively disrupting the sector in which they operate. To pursue their growth objectives, they’re focusing on disruption detection and innovation.
Transformation can’t be achieved alone. Almost three-quarters (73 percent) of UK CEOs say new partnerships will be critical to continuing their pace of digital transformation. And 81 percent say that protecting their partner ecosystem and supply chain is just as important as building their own organisation’s cyber defences.
Read the full report to discover what UK CEOs think about prospects for growth, ESG and digital transformation.
Read the full report to discover what UK CEOs think about prospects for growth, ESG and digital transformation.
Download the report >
Download the report >
About the survey
The KPMG 2021 CEO Outlook provides an in-depth three-year outlook from 1,325 global chief executives of major organisations on enterprise and economic growth.
The UK edition draws heavily on the responses of the 150 UK CEOs who took part in the survey.
This latest research is part of the KPMG CEO Outlook series, which offers a unique perspective on the mindset shift of global CEOs over the lifetime of the COVID-19 pandemic and looking forward to post-pandemic recovery.
CEOs are drawn from companies with annual revenue over US$500 million and a third of the companies surveyed have more than US$10 billion in annual revenue. They represent 11 key markets and sectors.
NOTE: some figures may not add up to 100 percent due to rounding.
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