Launching aggressive M&A plans to capture market opportunities
Launching aggressive M&A plans to capture market opportunities
Bangkok, September, 2021 — CEOs of the world’s largest businesses are increasingly optimistic about the outlook for their own business and despite the Delta variant slowing down the ‘return to normal’, their confidence in the global economy has returned to levels not seen since the start of the pandemic. The KPMG 2021 CEO Outlook, which asked more than 1,300 global CEOs about their strategies and outlook over a three-year horizon, finds that 60 percent of leaders are confident about the global economy's growth prospects over the next three years (up from 42 percent in the January/February’s pulse survey).
The prospect of a stronger global economy is leading CEOs to invest in expansion and business transformation, with 69 percent of senior executives identifying inorganic methods (e.g. joint ventures, M&A and strategic alliances) as their organization’s main strategy for growth. A majority (87 percent) of global leaders stated that they are looking to make acquisitions in the next three years to help grow and transform their businesses.
The survey found that 30 percent of CEOs plan to invest more than 10 percent of their revenues toward sustainability measures and programs over the next three years.
Global Chairman & CEO
Chairman for KPMG Asia Pacific and KPMG China
Chief Executive Officer, KPMG in Thailand, Myanmar and Laos
Among the many socio-economic, social and environmental challenges facing the world, stakeholders are putting immense pressure on businesses to tackle climate change and leave a positive impact on society. As a result, over a quarter (27 percent) of business leaders are concerned that failing to meet climate change expectations will result in the public markets not investing in their business. Over half (58 percent) of CEOs said that they face increased demands from stakeholders (e.g. investors, regulators and customers) for more reporting on ESG issues.
Three out of four (77 percent) of global executives believe that government stimulus will be required if all businesses are to reach net zero. Furthermore, three-quarters (75 percent) of global CEOs have identified COP26 as a pivotal moment to inject urgency into the climate change agenda.
More than eight out of ten (86 percent) global leaders state that their corporate purpose will shape capital allocation and inorganic growth strategies. The research found that corporate purpose, what the company stands for and its impact on communities as well as the planet, is driving 74 percent of CEOs to act in addressing the needs of their stakeholders (customers, employees, investors and communities). There has also been a 10-point increase since the beginning of 2020 in the number of CEOs who say their principal objective is to embed purpose into the decisions they make to create long-term value for their stakeholders (64 percent).
When looking at risks for growth over three years, senior executives identified three areas they see as top risks: supply chain, cyber security and climate change. 56 percent of global CEOs say that their business’ supply chain has been under increased stress during the pandemic.
Table 1: Biggest risks to growth over the next three years
|2021 CEO Outlook (July/Aug 2021)||2020 CEO Outlook pulse (July/Aug 2020)|
Risk to growth
|Rank||Risk to growth||Rank|
|Cyber security risk||#1||Talent risk||#1|
|Environmental/climate change risk||#1||Supply chain risk||#2|
|Supply chain risk||#1||Return to territorialism risk||#3|
|Emerging/disruptive technology risk||#2||Environmental/climate change risk||#4|
|Regulatory risk||#2||Cyber security risk||#5|
|Operational risk||#2||Emerging/disruptive technology risk||#6|
Just 21 percent of CEOs now say they are planning to downsize, or have already downsized, their organization’s physical footprint, a dramatic shift from August 2020, with the first wave of the pandemic at its peak, when 69 percent of global leaders said that they planned to downsize their space.
Three out of four (75 percent) CEOs believe that the pressure put on public finances by the pandemic response has increased the urgency for multilateral cooperation on the global tax system. At the same time, 77 percent of senior executives agree that the proposed global minimum tax regime is of “significant concern” to their organization’s goals on growth. Meanwhile, they are more worried about regulatory and tax risks than they were prior to the pandemic (reference table 1 above).
The research found that 74 percent of CEOs recognize the strong link between the public’s trust in their businesses and how their tax approach aligns with their organizational values. As businesses aim to build back better, a majority (69 percent) of CEOs are feeling increased pressure to report their tax contributions publicly as part of their broader ESG commitments.
The full findings of the KPMG CEO Outlook survey will include qualitative interviews with the CEOs of: Edward Jones, Greater Toronto Airports Authority, Mitsubishi UFJ Financial Group and Snowflake.
To view additional information about the survey please visit home.kpmg/CEOoutlook. You can also follow @KPMG on LinkedIn and Twitter for updates and the conversation with #CEOoutlook
The KPMG CEO Outlook provides an in-depth three-year outlook from thousands of global executives on enterprise and economic growth.
The KPMG 2021 CEO Outlook asked 1,325 CEOs from the world’s most influential companies to provide their 3-year outlook on the economic and business landscape, as well the impact that the on-going COVID-19 pandemic will have on their organizations’ future. All respondents have annual revenues over US$500M and a third of the companies surveyed have more than US$10B in annual revenue.
KPMG is a global organization of independent professional services firms providing Audit, Tax and Advisory services. We operate in 146 countries and territories and in FY20 had close to 227,000 people working in member firms around the world. Each KPMG firm is a legally distinct and separate entity and describes itself as such.
KPMG International Limited is a private English company limited by guarantee. KPMG International Limited and its related entities do no provide services to clients.
KPMG in Thailand, with more than 2,000 professionals offering Audit and Assurance, Legal, Tax, and Advisory services, is a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee.