CEOs name climate change as top risk to growth
Climate change is now the top threat to organisational growth for large companies across the world, an annual survey of CEOs by professional services firm KPMG has found.
The poll of 1,300 CEOs from 11 countries found that 76% believe growth will depend on their ability to navigate the shift to a low-carbon, clean-technology economy.
This is the first time in the survey’s five-year history that climate change has ranked top of the list, with technological disruption, cyber security, operational risk and territorialism all deemed a lower risk to growth.
“Climate change has evolved beyond just an environmental issue to a pressing financial one as CEOs are feeling investor and stakeholder pressure to move away from fossil fuels," KPMG US sector leader for energy and natural resources, Regina Mayor, said.
"As we continue to consume energy at a record pace, organisations are thinking about ways to incorporate a mix of energy sources, made up of both fossil fuels and renewables.”
The CEOs surveyed came from companies with at least $500m (£407m) in revenue, 130 of which were global energy firms, with these also citing climate change as a top risk to organisational growth.
More than 80% said they are personally leading the technology strategy for their organisations, with 79% placing more capital investment in buying new technologies to improve resilience.
To pursue growth objectives over the next three years, 66% of executives said that they plan to increase investment in disruption detection and innovation processes.
And to ensure their organisations are future-ready, more than three-quarters plan to upskill employees in new digital capabilities to develop a more effective workforce.
However, the findings show that, while 94% of energy CEOs are confident in their business’ growth prospects, only 65% feel the same way about the global economy.
"Generally we see growth opportunities, especially in the renewables and wind industry," said Markus Tacke, Siemens Gamesa CEO.
"While the prognosis of the world economy seems to have greater downside risk than upside, the current fundamental of our energy industry gives us every reason to have an optimistic outlook.”
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Chris Seekings is a reporter for TRANSFORM