Focus on sustainability vs. quarterly earnings creates tension with investors: EY survey
by CM Staff
In addition, more than three-quarters (79 per cent) of respondents have adjusted, or are planning to adjust, their supply chain to help reduce costs and minimize risks to prepare for future disruption.
LONDON — As the world enters a new phase in the global COVID-19 pandemic, the majority of CEOs are ready to accelerate plans for investment and mergers and acquisitions in their pursuit for growth according to research from Ernst & Young.
These findings come from the inaugural EY 2022 CEO Outlook Survey, which recorded the views of more than 2,000 CEOs across the globe on their prospects, challenges and opportunities.
More than half of respondents or 54 per cent said they will prioritize investment in existing businesses, digital transformation and sustainability, according to the survey. In addition, more than three-quarters (79 per cent) of respondents have adjusted, or are planning to adjust, their supply chain to help reduce costs and minimize risks to prepare for future disruption.
EY also stated that after a record year that saw US$5t worth of M&A, transactions will remain a critical tool for CEOs in 2022 complementing other areas of investment. Nearly two-thirds (59 per cent) of respondents expect their companies to pursue acquisitions in the next 12 months — up from 48 per cent at the start of 2021.
CEO investment plans, however, could be thrown off course due to external risks to their business. A majority of the surveyed CEOs (87 per cent) appear worried about rising input prices and identify trade tensions (18 per cent), the impact of climate change (17 per cent) and increasing competition from challengers (13 per cent) as the most critical risks to the future growth of their businesses.
“CEOs are ready to be on the front foot when it comes to investment. At the same time the impact of the fragile global environment and the increasing cost of doing business across the board, from rising inflation to rocketing energy costs, is keeping them up at night,” said Andrea Guerzoni, EY Global Vice-Chair – Strategy and Transactions in a statement.
“Deals will remain a key lever in CEOs’ investment toolkit. Coming off a record-breaking run for M&A, many CEOs will be focusing on integrating assets acquired over the past 12 months, but CEO acquisitive intentions should ensure continued deal activity at high levels in 2022.”