CEOs Optimistic About Growth, But Challenges Loom Large
As the world grapples with geopolitical tensions, economic uncertainty, and the pressing climate crisis, the Energy, Natural Resources, and Chemicals (ENRC) sector is surprisingly optimistic. According to KPMG’s 2024 ENRC CEO Outlook, 78% of CEOs in the sector foresee robust economic growth over the next three years, driven by resilient energy prices and surging demand for both renewable and fossil fuel-based energy.
Navigating the AI Revolution
This optimism is tempered by the recognition of significant challenges. One such challenge is the rapid advancement of generative artificial intelligence (Gen AI). While AI offers immense potential to streamline operations and drive innovation, it also poses risks to jobs and business models.
- A Double-Edged Sword: 79% of CEOs believe that Gen AI will not lead to significant job cuts but will necessitate upskilling and redeployment of the workforce.
- A Long-Term Play: 65% of CEOs expect to see a return on investment from Gen AI within three to five years, reflecting a cautious but optimistic outlook.
- A Strategic Priority: Gen AI is a top investment priority for 58% of ENRC CEOs, with a focus on applications across IT, sales and marketing, research and development, finance, and strategy.
The ESG Imperative
The ESG agenda remains a cornerstone of the ENRC sector’s strategy.
- A Personal Commitment: 83% of CEOs are willing to take public stances on ESG issues, even if it conflicts with their personal beliefs.
- Adapting to the Evolving Landscape: 74% of CEOs have adjusted their climate communication strategies to align with changing stakeholder expectations.
- Integrating ESG into the Core Business: 72% of CEOs have fully integrated ESG practices into their value creation strategies.
The Talent Challenge
The ENRC sector faces a dual challenge of attracting and retaining talent across generations.
- Bridging the Generational Gap: 93% of CEOs recognize the need to balance the needs of experienced and younger workers.
- Diversity and Inclusion: Two-thirds of CEOs believe that increased scrutiny of diversity and inclusion performance will continue.
- Gender Parity in Leadership: 77% of CEOs believe that gender equity in the C-suite is essential for growth.
A Path Forward
The ENRC sector stands at a crossroads. To capitalize on the opportunities presented by AI and ESG, CEOs must:
- Embrace AI Strategically: Adopt a measured approach to AI implementation, focusing on building expertise and establishing robust governance structures.
- Prioritize ESG: Integrate ESG into the core business strategy, beyond mere compliance, to drive long-term value.
- Invest in Talent: Focus on attracting and retaining top talent, addressing generational differences, and promoting diversity and inclusion.
By navigating these challenges and seizing the opportunities, the ENRC sector can emerge as a leader in sustainable and innovative business practices.