Sustainability Now Less of a Priority For Singapore CEOs Compared With 12 Months Ago

According to the latest quarterly EY CEO Outlook Pulse survey of 1,200 global executives, including 40 in Singapore, CEOs are feeling more hopeful about their immediate prospects and the actions they need to take now to create capital for investment in future growth.

However, in a challenging market, there remains a focus on short-term returns. Respondents globally indicated that longer-term ambitions around decarbonisation and the creation of new revenue streams could be attained faster by engaging more effectively with institutional investors and the government.

Fifty-five percent of the Singapore CEOs (global 60%) surveyed say they are more optimistic about their companies’ revenue growth, with 48% (global 65%) feeling more positive about their business’s profitability. This is on the back of more optimism about global economic growth (Singapore 43%, global 33%).

Focus on Sustainability Eases

Faced with a challenging economic environment, more than half (58%) of Singapore CEOs surveyed (global 23%) have deprioritised their focus on sustainability from 12 months ago.

Among them, 43% (global 18%) indicated that it was due to challenging economic or financial circumstances, while 15% stated that it was due to a focus on other boardroom priorities.

For those that indicated that sustainability continues to be a priority compared with 12 months ago, 23% (global 54%) shared that it is a higher boardroom priority today.

The surveyed respondents believe that technology and AI hold the answers to the key sustainability challenges faced (Singapore 73%, global 75%). They also share their fears of being accused of greenwashing, which leads to “greenhushing” among companies (Singapore 71%, global 73%); and that shareholders are more focused on companies’ earnings targets than long-term sustainability performance (Singapore 70%, global 73%).

Globally, investors are pulling back from environmental, social and governance (ESG) issues, with more than a third of institutional investors (35%) around the world saying that sustainability is a lower priority for their investment portfolios than it was 12 months ago.

Vikram Chakravarty, EY Asean Strategy and Transactions Leader, says: “Sustainability has obviously slipped as a business priority among CEOs. However, with governments continuing to focus on sustainability through regulations such as requirements for Singapore businesses to make climate-related disclosures in their sustainability reports, business leaders should not lose sight of their decarbonization and sustainability strategies.”

“Achieving sustainability targets can be challenging, particularly in a difficult, cost-focused market, but the thrust toward a sustainable future is not just a financial and business imperative but a shared commitment across the corporate world.”

Technology, AI Top Strategic Priorities

Technology appears to be seen by the survey respondents as a key approach to help their companies address challenges – from enhancing business performance to sustainability.

The survey found that investing in technology, including AI, to improve growth and productivity, is a top priority for 33% of Singapore respondents (global 47%) over the next 12 months.

Other top priorities are enhancing data management and cybersecurity (Singapore 33%, global 45%) and investing in employees’ training and reskilling (Singapore 23%, global 15%).