According to PwC’s 25th Annual Global CEO Survey, chief executives around the world are reinventing their organisations to deal with global disruptions and secure sustainable growth. Around the world, despite the pandemic, business leaders continue to be confident in economic growth prospects. However, in Central and Eastern Europe, while the majority of CEOs are optimistic about the future of global economic growth, they remain more conservative than their global counterparts in their estimations.
When it comes to expansions abroad, CEE leaders are looking closer to home. Although Germany occupies the first place with 38 per cent of the CEOs surveyed indicating it as very important for future revenues growth, CEE leaders are also looking at countries within the region, such as Turkey, Romania, Serbia, Hungary and Albania.
Concerns over major threats have grown across the board, as business leaders strive to adjust to the new normal in this period of uncertainty. CEE business leaders are more aligned with their global counterparts than last year in their perception of the major threats to their business. Health risks were stated to be the biggest concern by CEE CEOs (53 per cent) while 33 per cent of them has expressed concerns over the impact of climate change on their business, a threat that the year before didn’t even make it into the top five. Therefore, it appears that CEE CEOs are starting to grasp the role they need to play in driving action against global challenges such as climate change. Asked if there are any non-financial related outcomes included in their company’s long-term corporate strategy, 29 per cent mentioned greenhouse gas (GHG) emissions reduction.
Indeed, after the past year of extreme weather events and widespread attention to ESG and COP26, climate concerns are more prevalent on the business agenda. Where they have typically fallen short, CEE CEOs have caught up with their global peers when it comes to making decarbonisation commitments.
The percentage of CEOs in CEE that has made a carbon-neutral commitment exactly matches the global figure, at 26 per cent. And a slightly lower percentage of CEOs in CEE have made a more ambitious net-zero commitment, at 19 per cent compared to 22 per cent globally. When we look closer at the businesses that have made a decarbonisation commitment in CEE, leaders are less likely to have science-based targets and they are less likely to link non-financial results to their own reward packages. Of those who have made a net-zero commitment, 23 per cent of CEOs in CEE said they don’t know which science-based target, if any, their commitment is aligned to, compared with 11 per cent globally.
Thus, there is room for improvement in how commitments are being translated into action.