The Future Through the Eyes of CEOs

The 28th Annual CEO Survey conducted by PwC gathered insights from 4,701 CEOs worldwide, revealing a divide between two groups of business leaders: those who actively adapt to new realities and those who remain stagnant.

Two Approaches to the Future

The first group of leaders is actively investing in key areas such as generative artificial intelligence (GenAI), climate transformation, and new business models, seeing them as opportunities for growth and value creation.

On the other hand, more conservative leaders rely on minor adjustments to existing business models to maintain competitiveness. However, with rapid technological and regulatory changes, this strategy may prove risky.

High Expectations for GenAI

Generative AI is generating great enthusiasm among business leaders. Currently, one-third of CEOs have already seen revenue and profitability growth due to its implementation, and half expect further increases in the coming year.

Despite these benefits, trust in AI remains a challenge, slowing down its full-scale adoption.

Sustainability as a Growth Driver

Investments in climate-positive actions are increasingly proving to be profitable. The PwC study found that:

• Over the past five years, one-third of CEOs have reported revenue growth from sustainability investments.
• Two-thirds of executives stated that these investments either reduced operating costs or had no significant impact on expenses.

However, these benefits are not evenly distributed:

• In Germany and France, about 50% of CEOs reported higher costs from climate-related investments.
• In the United States, only 20% of executives shared similar experiences.
• In China, 60% of CEOs reported increased revenues from sustainability initiatives, while 46% received additional government incentives.

Blurring Industry Boundaries

The business landscape is undergoing rapid transformation, with traditional industry boundaries disappearing. Nearly 40% of CEOs stated that their companies entered new sectors in the past five years.

At the same time, 40% of leaders believe their companies will become unprofitable within a decade if they fail to pivot their business strategies. This underscores the importance of flexibility and adaptability in today’s market.

Slow Pace of Transformation

Although many CEOs recognize the need for change, the pace of transformation remains slow. On average, only 7% of companies’ revenues over the past five years have come from new business activities.

The main barriers to transformation include:

• Inefficient decision-making processes
• Insufficient resource allocation
• Lack of long-term vision, often due to short CEO tenures

Optimism Despite Challenges

Despite these challenges, business leaders remain optimistic.

• 60% of CEOs predict global GDP growth in the next year—a significant increase from 38% last year and only 18% two years ago.
• The number of CEOs planning to increase employment (42%) outweighs those planning job cuts (17%) by more than two to one.

How Can Companies Create Value Through Climate Action?

Building long-term value through sustainability starts with CEO-driven decisions focused on developing eco-friendly products, services, and technologies.

Already, one-third of companies are generating revenue from climate transformation investments. This number is expected to grow as decarbonization accelerates.

Next Steps:

1. Optimizing resource and energy consumption
   • Companies face the "energy trilemma": ensuring stable energy supply, reducing emissions, and minimizing costs.
   • Many firms are becoming "prosumers"—both producers and consumers of renewable energy—allowing them to use and sell excess power back to the grid.
2. Leveraging Data for Competitive Advantage
   • Companies must develop a robust data strategy for sustainability.
   • This helps meet ESG reporting requirements and provides insights for strategic decision-making.

Conclusion

Businesses are at a turning point. Those investing in technology, climate transformation, and new business models have the opportunity for rapid growth.

Meanwhile, companies that remain stagnant risk losing competitiveness. The future of business will be shaped by flexibility, adaptability, and innovation—and sustainability is at the core of this transformation.

🔗 Source: PwC CEO Survey