Asia-Pacific CEOs are Optimistic about the Future Despite the Pandemic
Due to the consistent pressure caused by the worldwide COVID-19 pandemic, Asia-Pacific’s chief executives are still facing different issues in the market such as the ‘Great Resignation’, disruption in the supply chain, and a rise in inflation, according to PwC’s 25th annual Global CEO survey from October to November 2021, where 4,446 top executives were polled.
Nevertheless, the regional chief executives remain optimistic when it comes to the chance of having a stronger economy next year, and a more resilient global economy is expected by 2022.
According to 17% of the people, the situation of the global economy will get worse, while a whopping 76% believe that the global economy will go through a substantial improvement. The optimism level of this year seems to be three points higher as compared to last year, and about 41 points higher than it was in 2020, which was when the pandemic took place.
Moreover, in the majority of the countries in Asia-Pacific, optimism seems to be trending upwards. This includes countries like Indonesia, Singapore, Malaysia, and India. More than 90% of the CEOs in these countries are looking forward to global growth within the coming year. On the other hand, the CEOs in China seem to be feeling less optimistic as compared to a year ago, hence they are down by nine points to 62%.
Due to being confident in the improvement of global growth, regional CEOs expect to see their businesses soar to new heights. 50% of them are said to either be extremely confident or very confident regarding their 12-month revenue growth.
The global chairman of PwC, Bob Moritz, claims that this ongoing global pandemic casted a shadow over every business and continues to do so due to new variants coming out every few months. However, the fact that CEOs remain optimistic through it all speaks great volumes about the resilience and strength of the world’s economy. Plus, it shows the abilities of the CEOs to handle uncertain situations. He further said that the world is getting used to the new normal.
Furthermore, regardless of the optimism, the CEOs in Asia are fully aware of the pandemic and the potential threats it can cause their companies in the coming year. Their top priority is the health risk which is at 58%, except China’s which is at 42%. This figure is 10% higher as compared to other global CEOs, who listed cyber risks as their top priority. However, for the Asia-Pacific CEOs, cyber risk ranked at 44%, while macroeconomic volatility was at 43%, placing them on the second and third position in the ‘priority’ list, respectively.
More Sustainability for the Betterment of the World
Asia Pacific and China’s chairman of PwC, Raymund Chao, claims that the chief executives of these regions are looking forward to integrating environmental, social, and governance (ESG) practices within their businesses. According to him, this offers a great opportunity for these business leaders to form more trust and create sustainable outcomes for everyone, while also supporting the New Equation strategy of PwC.
When it comes to carbon-neutral and net-zero commitments, the CEOs of Asia-Pacific are quite ahead of their peers, globally. 60 to 69% of them are making great progress regarding carbon-neutral and/or net-zero commitment, which is more than 9 to 13% of what their global peers are doing. Moreover, the CEOs that made net-zero commitments, 77% of the Asia-Pacific CEOs, as compared to the 66% of the CEOs globally, got their approach evaluated and authorized. A lot of them also had emission targets within their overall strategy (43% Asia-Pacific against 37% globally).
According to the CEO of PwC in Thailand, Chanchai Chaiprasit, since the past year, many businesses in Thailand have started focusing more on ESG, however, not a lot of them are taking into account the carbon emission targets in order to achieve net zero. This includes massive Thai plus international companies, whether they are listed or non-listed. When it comes to publicly announcing net-zero commitments, less than twenty of those companies have done so.
He also mentioned that companies that actually committed to net zero are the ones that conduct their business in different foreign countries, supply their products on an international platform, or are part of the massive worldwide supply chain. These companies are more than likely to be willing to take part in net-zero commitments, when it comes to their workforce and scale as compared to other Thai companies.
Also, this survey displayed a strong connection between net-zero commitments and trust. This was based on the responses of the CEOs when asked questions regarding the behavior of their customers. The CEOs of Asia-Pacific companies ranked highest when it comes to trust, hence they are more likely to lead their organizations towards net-zero commitments. Asia-Pacific companies ranked at 37% for customer trust as compared to the ones that were ranked the lowest at 20%.
Moreover, Asia-Pacific CEOs of companies that had high customer trust rankings are more than likely to lead organizations that have combined non-financial outcomes to their compensation. Over half of these companies ranked at 65% for customer satisfaction and 57% for employee engagement metrics. These rankings are based on the incentive plan and personal bonuses offered by these companies.
Mr. Chanchai claims that Thai companies are now more aware of ESG and how they should work more towards this issue. He further stated that working on net-zero commitment is similar to planning for a journey. A business needs to understand ESG first and think about which criteria works with their industry. Each business will have their own specific framework when it comes to the impact of ESG.
Lastly, he mentioned that there isn’t one single strategy that will work for all businesses. Each business will have to think about which ESG aspect they should work on first before they measure emissions when it comes to the total carbon footprint of the company. Next, they should plan on how they can minimize these emissions in order to reach carbon neutrality, while also taking into account carbon credits and tax.