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CEOs fear AI & climate change could sink firms – report
Thu, 18th Jan 2024

As per a recent pre-Davos survey conducted by PricewaterhouseCoopers (PwC), global business chiefs express a rising concern about the long-term sustainability of their respective firms. With the evolving advancements in generative artificial intelligence (AI) and the increasing pressure due to climate disruption, the apprehension seems more pronounced than ever.

In the survey including over 4,700 global CEOs, about 45% shared that they do not foresee the survival of their businesses in the forthcoming ten years unless significant changes are adopted. PwC Global Chairman Bob Moritz remarked on this, saying, "There's the 55% who think they don't have to change radically, and I would argue that's a little naive because the world is changing so fast around them."

The survey brought to light that the advancements in generative AI were the central concern for the majority of respondents. Three-quarters of them anticipate significant business transformation due to AI within the next three years. While most expect the requirement for upskilling employees in order to adapt to AI advancements, there are concerns about issues of cybersecurity, misinformation, and potential bias towards particular groups of customers or employees.

Juergen Mueller, SAP's chief technology officer, emphasised the impact on the tech sector and echoed the need for better skills, saying, "If you just look at the same skills, I think yes, there will be an impact, there will be job losses and a freeze on hiring for junior positions. Therefore, what you do need is even better-skilled people."

The PwC survey also revealed an augmented focus on environment-related apprehensions, which are putting pressure on profit margins. Four out of ten executives proactively stated their acceptance of lower returns on investments that are climate-friendly. However, fewer than half reported progress in incorporating climate risks in their financial planning, and a third stated they had no plans to do so.

Derek Mackenzie, CEO of Investigo, highlighted the necessity for organisations to keep pace with these transitions. He said, “AI will bring seismic changes to the way businesses operate, shaking up traditional job roles and leaving firms in urgent need of staff with the latest digital skills. Against the backdrop of deeper economic issues, companies need to meet these tests head-on by investing and building stronger talent pipelines. Failure to do so will leave organisations poorly equipped for the inevitable changes and challenges ahead, missing out on a major digital revolution”.

Nevertheless, the survey found that compared to 2023, this year witnessed a surge in company confidence about global growth, with 38% being optimistic. However, the confidence in revenue growth over the next year took a hit, dropping from 42% in 2023 to 37% this year.