A GLOBAL survey conducted by KPMG International found that 59% CEOs in Asia Pacific (APAC) are more confident about economic recovery compared to earlier this year although concerns have mounted over supply chain risks.
The KPMG 2021 CEO Outlook surveyed more than 1,300 global CEOs about their strategies and outlook over a three-year horizon.
Among almost 500 CEOs in Asia Pacific, 66% of CEOs in APAC stated their supply chains have been under increasing stress over the past 18 months. It is thus unsurprising that CEOs ranked supply chain risk as their top threat to growth this year.
“Pre-pandemic, risks to the supply chain had been steadily gaining attention due to increasing volatility from trade tensions and climate-driven events but were still considered a low priority for CEOs,” commented KPMG Malaysia managing partner Datuk Johan Idris.
“However, the pandemic brought this issue into sharper focus as organisations struggled to maintain supply chain continuity during worldwide lockdowns.”
According to KPMG, Asia Pacific CEOs continue to recognise the importance of building resilient, flexible supply chains with 36% having stated an intention to monitor deeper into their supply chain to better anticipate potential problems. Another 34% will diversify sources of input by adding new locations of inputs to make their supply chain more resilient.
“Meanwhile, 14% will prioritise reconfiguring their supply chain to provide greater resiliency and more consistent access to achieve their growth objectives,” added the global survey
Below are other key findings within Asia Pacific:
- Scrutiny on Environmental, Social and Governance (ESG) continue to rise
70% of CEOs said that they face increased demands from stakeholders for more reporting and transparency on ESG issues with pressures predominantly coming from institutional investors (57%) and regulators (31%). However, 42% stated that a key challenge when communicating their ESG performance to stakeholders is the struggle to create a compelling ESG story.
- Reaching net zero with government support
81% of CEOs believe that Government stimulus will be required if all businesses are to reach net zero. Roughly the same percentage (80%) agree that large corporations have resources to help governments find solutions to pressing global challenges which showcases that CEOs recognise that greater public-private partnerships are needed to better address ESG issues.
- Changing the sentiment on the future of work
Just 18% of CEOs now say they are planning to downsize or have already downsized their organisation’s physical footprint. This is a dramatic shift from August 2020 where 75% stated their intention to downsize their space. CEOs are focused instead on providing increased flexibility for their workforce with 41% looking to invest in shared office spaces. Furthermore, 34% will look to implement a hybrid model of working for their staff where most employees work remotely two to three days a week.
- People-powered digital agility
While 68% of CEOs are placing more capital investment in buying new technology, they are also looking to build human capability with 49% planning to invest in digital training, development and upskilling to ensure employees’ skills remain future-focused. – Sept 20, 2021
