The survey was in the field during the COP26 conference in Scotland, which convened world leaders to try to prevent the worst effects of climate change. PwC experts who attended were both impressed by executives’ commitment to rapid progress and aware that the captains of industry in Glasgow were a self-selected group that came prepared to take action. The question of how to bring others along looms large. Then, just two weeks after PwC's 25th Annual Global CEO Survey closed, news of the Omicron variant reverberated around the world, raising fresh questions about the course of the pandemic and about society’s ability to continue the slow climb to normalcy. The survey findings reflect these and other tensions.
For example, just 22% of survey respondents have made net-zero commitments (though the largest companies in our sample are further along). CEOs are most worried about the potential for a cyberattack or macroeconomic shock to undermine the achievement of their company’s financial goals—the same goals that most executive compensation packages are still tied to. And they are less concerned about challenges, like climate change and social inequality, that appear to pose smaller immediate threats to revenue.
It also provides a glimpse of what is possible when we reimagine the status quo. A case in point: the power of trust. According to the research highly trusted companies are more likely to have made net-zero commitments and to have tied their CEO’s compensation to nonfinancial outcomes, such as employee engagement scores and gender diversity in the workforce.
In aggregate, CEO optimism has remained stable, and high. When surveyed chief executives in October and November of 2021, 77% said they expect global economic growth to improve during the year ahead, an uptick of one percentage point from our previous survey (conducted in January and February of 2021) and the highest figure on record since 2012, when we began asking CEOs how they felt about the economy’s potential.
Although it is unclear how the Omicron variant will affect CEOs’ optimism, today’s headlines emphasise the asymmetrical nature of the world’s pandemic recovery, which our survey results also reflect. CEOs in Brazil, China, Germany and the United States report feeling less optimistic than they were a year ago that growth rates are poised to increase, whereas those in India, Japan and the UK are even more optimistic than they were early last year. These differences may simply reflect where CEOs see themselves in the economic cycle. China and the US, for example, rebounded ahead of the rest of the world and are now experiencing growing pains in the form of inflation, real estate bubbles and supply chain disruptions. Both countries are also confronting labour shortages. In China, shifting demographics and structural unemployment are creating a growing gap; in the US, headlines about the “great resignation” and early retirement predominate.
More than half of CEOs also report high levels of confidence about their own prospects for revenue growth over the next 12 months. Most upbeat of all are CEOs of private equity firms (67% of whom are highly confident about their company’s growth) and technology firms (64%). Both sectors continue to benefit from large inflows of capital, thanks to the favourable financial conditions prevailing in most advanced economies. Among the CEOs expressing a more tepid outlook are those in the automotive (46%) and hospitality and leisure sectors (44%), which are grappling with semiconductor shortages and the lingering effects of the pandemic on travel, respectively. It remains to be seen whether the pandemic trajectory will shift and present new constraints on some industries.
The threats that CEOs are most worried about and the impact they see those threats having on their business in the next 12 months reveal leaders under pressure to deliver top-line results.
Similar to last year, CEOs are most concerned about cyber risks (49%) and the global health situation (48%) as the pandemic lingers. Interestingly, CEOs in the manufacturing and consumer sectors displayed lower levels of concern about cyber risks (40% and 39%, respectively), despite those sectors’ high volume of cyberattacks. Coming in a close third on the threat list for all CEOs is macroeconomic volatility, including fluctuations in GDP, unemployment and inflation.
