As people and communities around the world continue in efforts to overcome the challenges of the COVID-19 pandemic, according to the EY CEO Survey 2022, the vast majority (90%) Eurozone businesses have already been impacted, with over a third (38%) stating the pandemic has fundamentally reshaped their industries. Furthermore, 59% of planned acquisitions in the Eurozone in the past 12 months were cancelled or failed because of the COVID-19 pandemic.
In this edition of the CEO Imperative Series, which provides critical answers and actions to help CEOs reframe the future of their organizations, we explore how CEOs are making changes to their strategies in the face of this new landscape. Over three-quarters (77%) of Eurozone CEOs have adjusted or are planning to adjust their operations or supply chains to reduce costs or minimize risks. According to respondents, one of the most critical risks to their future growth strategies is the acceleration of climate change impacts and increasing pressures to build sustainability (15%) — surpassed only by increasing geopolitical tensions, trade conflicts, protectionism and sanctions (21%). The top three capital strategy issues receiving the most attention and resources as identified by respondents are investing in digital transformation, investing in existing business to accelerate organic growth and value creation, and investing in sustainability.
Businesses have increased their focus on achieving a green recovery, and more broadly, environmental, social, and governance (ESG) targets. Consumers, employees and investors are increasingly voicing expectations that businesses address ESG issues — and CEOs are taking notice. This is especially true in the Eurozone, where from the survey, 30% of CEOs think that ESG will likely impact their role (compared to 23% of CEOs globally).
According to the survey, achieving profit and revenue goals alone are no longer sufficient metrics when it comes to meeting stakeholder expectations. As a result, CEOs are putting higher value on ESG, and around 27% already see the competitive advantage of having a clearly defined sustainable strategy. Eurozone respondents also identify the growing focus on ESG as the top challenge or opportunity changing the role of the CEO (30% of Eurozone CEOs, compared to 23% globally).