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KPMG survey : Saudi Arabian CEOs look to prioritise ESG strategy and expect growth through M & A
The majority of CEOs in Saudi Arabia are integrating environmental , social and governance ( ESG ) practices into their business strategies for sustainable growth , as their risk profile shifts towards disruptive technology and environmental concerns , reveals KPMG in their annual CEO Outlook .
The CEU Outlook Saudi Arabia 2021 : Purpose-led and prepared for growth is based on a global survey among 1,325 CEOs including 50 in Saudi Arabia , taking additional insight from interviews with business leaders in the Kingdom . All respondents based in the Kingdom represent companies with revenues greater than US $ 500 million and 60 % of the companies have revenues greater than US $ 1 billion .
Given increasing stakeholder pressure , CEOs are putting people first to drive societal return and 92 % of surveyed CEOs in the Kingdom commented that their response to the pandemic has caused their focus to shift to the social component of their ESG programs . On the other hand , a mere 30 % of CEOs in the Kingdom feel they will struggle to meet diversity and inclusion expectations , compared to 56 % globally .
Making progress on climate change will require action from both businesses and government , with KPMG ’ s report finding 42 % of Saudi-based CEOs intending to invest more than 10 % of their revenues in becoming more sustainable . Six in 10 CEOs in the Kingdom found their ESG programmes improve financial performance .
“ We notice that CEOs are putting ESG at the centre of their organisation ’ s long-term growth strategies . It ’ s been encouraging to see this trend and to see business leaders successfully tie their organisation ’ s economic success to their ESG agendas . CEOs have proven they can be drivers of positive change ,” said Dr . Abdullah Al Fozan , Chairman of KPMG in Saudi Arabia .
According to the survey findings , CEOs in Saudi Arabia are optimistic , confident and expect aggressive growth through acquisitions , as well as other inorganic methods . Nearly 86 % of CEOs in the Kingdom are looking at mergers and acquisitions ( M & A ) deals as a means of growth in the next three years . As similar figure of 88 % finds they need to be quicker to shift investments to digital opportunities .
In Saudi Arabia , 84 % of the CEOs have confidence in the Kingdom ’ s growth , while 90 % expect their company to exceed pre-pandemic levels . “ The pandemic is not over , but CEOs are increasingly confident about economic growth in Saudi Arabia and globally ,” said Dr . Al Fozan . “ With potential abound , CEOs are hoping to get on the front foot to position their businesses to capture it . Inorganic growth strategies are a popular choice to seize these opportunities . Business leaders are looking to expand
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