Businesses are confident they respond to transformations ahead, with ESG firmly on the agenda, according to the Mazars 2021 C-suite barometer.
Mazars, an international audit, tax and advisory firm, has released its 2021 C-suite barometer: Time for action report. The report is the result of an in-depth survey conducted in Q4 2021, which took the pulse of over 1,000 executives from 39 countries around the world and around 200 executives from 10 countries in the Asia-Pacific region.
"We conduct our annual barometer to hear, and understand, the opportunities and challenges our clients are facing," says Mark Kennedy, partner and member of the group executive board at Mazars.
"One of the most notable findings of the study was the sense of confidence and resilience we uncovered: with the ongoing impact of the pandemic and the deeply concerning events in Ukraine, these are qualities that are likely to be tested once again this year.
Chris Fuggle, partner and global head of sustainability, adds, "In the face of unprecedented digital advances and global events, the C-suite barometer provides compelling insights into the key trends shaping the APAC market today.
"We hope these insights will help to spur business executives in the region to reflect and reshape their strategies and actions for future growth," he says.
A sense of confidence and resilience
The report found businesses are confident they can respond to the trends ahead, with 94% confident they can respond to trends in technology/innovation; 91% confident in responding to expectations for governance, ethics and social responsibility; and 90% confident responding to new regulatory requirements.
It also revealed that C-suites in Asia Pacific are confident in their future prospects. Three in four APAC executives (78%) predict revenue growth this year, and 82% of executives in APAC believe that they have resilience to overcome a crisis.
ESG on the C-suite agenda: time to turn intent into actionable strategies
According to the report, businesses expect to transform their sustainability strategies, boost investment in sustainability initiatives, and make public commitments on a range of ESG topics.
An increased focus on ESG is seen as critical to the future of APAC companies. Three in five APAC leaders (63%) report their focus on ESG increasing because of COVID-19 and two-thirds of APAC companies (67%) of APAC companies have made a public commitment to reducing pollution. They are highly focused on health and safety (62% vs. 63% globally), transparency (59% vs. 57% globally) - compliance (59% vs. 58% globally).
“Sustainability has shot up the agenda over the past year or so," says Fuggle.
"This is partly due to the impact of COVID-19 on business strategies and operating models, but it also reflects the explosion of awareness, concern and expectation across society as a whole.
"ESG is not just a marketing initiative, or even a regulatory compliance issue, it has become a core boardroom issue that needs to be embedded into every aspect of the business," he says.
Tech and sustainability transformations ahead
The research shows that leaders expect to transform their businesses, with technology and sustainability-related transformations being the most likely: nearly two thirds (62%) expect to transform their sustainability strategy in the coming years, second only to technology transformation (68%).
However, APAC businesses are less likely to transform their businesses than those in other regions. Three in five (60%) APAC executives expect their business to undergo a technology transformation, 8% lower than the global average, and the lowest score of the global regions. In addition, less than half (48%) expect an ESG transformation, compared to 62% of the global sample. This is the only global region where a minority expect an ESG transformation.
From strategy to action
Considering the transformations expected, confidence to respond to trends, investments planned, and commitments made on ESG, there appears to be a gap between intent and action, according to the report.
The survey identified the three most important skills leaders will need in the coming three to five years as: strategic vision and planning; analytical thinking and problem solving; innovation and creativity. With the focus on ESG and high confidence to respond to expectations for governance, ethics and social responsibility, it's perhaps surprising that ‘sense of purpose for the organisation's future', ‘strong ethics to drive and lead responsibly' and ‘emotional intelligence' are lower down the list.
Kennedy says, “Competition for talent is fierce, particularly with the rise of ESG and people's expectations of how businesses should behave.
"Organisations that can demonstrate their values and their vision, and who can develop, recruit and empower their people with the right skills, have the opportunity to build competitive advantage," he says.
Kee Yin Lai, associate director, risk consulting of Mazars in Singapore, adds, “In the past year, business leaders in APAC have recognised the need to reimagine their strategic priorities considering i) the next wave of technology enabled transformation and how cybersecurity risks should be addressed at the get-go, ii) ESG strategies and how it will integrated into the broader growth and remote working strategy.
“The study also discussed on an important aspect on how analytical thinking and strategic vision are the most sought-after skills for leaders to meet the challenges ahead," Lai says.
"Over the next 12 months, businesses that view regulatory change as an impetus for transformation, and successfully turn intentions into action will be best placed to thrive in the long run.”
The research shows businesses feel prepared and confident to respond to the trends and transformations ahead. But to deliver on their promises they need to focus investments and ensure their strategies are achievable.