Indian CEOs adopt AI for future success: CEO Outlook Pulse Survey 2024

Sustainability, policy, and regulations

With 60% of CEOs acknowledging the importance of sustainability over the past year, it is gaining prominence on the corporate agenda. However, the sustainability discourse is still evolving with regulations, objectives and impacts being redefined. In such a fluid scenario, a phenomenon called ‘green-hushing’ has emerged. Even as companies adopt sustainability initiatives, they are opting to stay silent rather than engage in sustainability discourse to steer clear of accusations of greenwashing. Reflecting the flux in the sector, CEOs indicate in the outlook survey that there is a need for improved alignment between consumer behavior and sustainability objectives, underscoring the role of technology and AI in tackling sustainability challenges.

Interestingly, the survey reveals a divided perspective on sustainability due to financial pressures and shifting boardroom priorities. About 44% of CEOs are keenly aware of sustainability’s impact on supply chains, but 40% are also opting for ‘green-hushing’ to avoid greenwashing concerns. Putting forth a compelling financial case for sustainability investments is also a challenge (42%).

Sustainability, however, is a business imperative – over the next three years, for 42% Indian CEOs decarbonizing their business model and operations and achieving net zero targets is among the top strategic priorities.

CEOs advocate global governmental coordination and consistency in addressing climate change, even as they are mindful of the financial risks associated with stranded assets and ESG-related regulations. CEOs are in favor of subsidies and tax incentives for green technology investments, with 65% emphasizing the importance of government investment in sustainable infrastructure.

Mergers, acquisitions, and transactions

Business imperatives are also influencing CEOs’ growth strategies around transactions, motivated by the pursuit of technology and innovative startups, expansion of market share, adapting to shifts in customer behavior, and ensuring supply chain security.

The M&A trends show that a staggering 96% of CEOs are actively considering transactions. While 64% are contemplating divestments, IPOs, and spin-offs, 50% plan to explore M&A. Along with these, 28% are looking at joint ventures or strategic alliances in the transactions mix.

CEOs are confident of their organizations’ ability to navigate the complexities of structuring deals. This includes functional (52%) and advanced capabilities (42%) in managing tax implications of the deal, anticipating potential regulatory challenges ahead of the deal, integration challenges. All of this can include cultural alignment and data and cybersecurity risks, as well as opportunities.

However, the survey interestingly shows that the CEOs are most confident of their organizations’ ability to have a comprehensive narrative to engage all stakeholders (66%), covering areas such as inclusive growth, job creation, investing in communities and social impact.

Along with the above-mentioned factors, sustainability is increasingly becoming integral to M&A strategies, influencing integration plans, deal terms, target identification, and due diligence.