The KPMG 2023 CEO Outlook survey outcome has revealed that global CEOs are increasingly recognising environmental, social and governance (ESG) as an essential part of their corporate strategy to achieve resilience and long-term growth in their business.
In a speech read on his behalf at the 12th edition of Ghana Economic Forum – a flagship programme of the B&FT, Senior Partner-KPMG Ghana, Anthony Sarpong, stated the survey shows that two-thirds, representing 69 percent of global CEOs, have fully embedded ESG frameworks into their business as a means to create value despite the numerous geopolitical and economic challenges facing them.
While the returns of investments in ESG by CEOs are not manifesting now, they recognise the importance to customers and their brands – with nearly 24 percent confident that over the next three years ESG will have the greatest impact on their customer relationships, and a further 16 percent believe it will help build their brand reputation.
The 2023 KPMG CEO Outlook report was conducted between August and September with over 1,300 CEOs from some of the big markets and key industry sectors, who provided insights into their strategies and expectations for the economy.
The survey included leaders from asset management, automotive, banking, customer and retail, energy, infrastructure, manufacturing, technology and telecommunications.
Another significant trend in the survey is that 35 percent of CEOs say they have changed the language they use in referring to ESG, both internally and externally; however, 68 percent indicated that their current ESG progress is not strong enough to withstand potential scrutiny from stakeholders or shareholders.
He further indicated that other themes evident in the KPMG CEO’s Outlook 2023 include economic outlook – whereof global CEOs, 73 percent, are confident about the economy over the next three years compared to 71 percent last year.
The other two themes are disruptive technology and talent.
The three pillars of the acronym ESG are environmental, social and governance – which ensure that when companies are undertaking an activity, they are not focused only on their profit margins but also their impacts on the world and society they operate in.
It measures how businesses incorporate environmental, social and governance practices into operations.
The environmental aspect looks at how companies minimize their impact on the environment; such as reducing carbon emissions and switching to zero-plastic waste, among others.
The social aspect of ESG refers to a company’s impact on society with principles; including providing training, supporting health and promoting equality in the workforce.
Finally, governance mainly focuses on leadership. It refers to how a company is held accountable for its actions as well as level of transparency in dealing with employees, stakeholders, customers and society.