Climate threat drops off business moguls' radar as pandemic hits
The number of New Zealand business bosses who rank climate change as the biggest threat to growth has halved, according to a new survey. Instead it's been replaced by a struggle to find talented staff in the wake of worldwide restrictions on travel thanks to COVID-19, and a reliance on technology like never before. "This latest pulse check really does show the challenges that have emerged through COVID, and also some interesting comparisons about what New Zealand CEOs are facing compared to their global cohort," KPMG executive chairman-elect Matt Pritchard told Newshub. KPMG surveys chief executives here and overseas a couple of times a year to get a handle on how they're going and what they see as the biggest challenges to business. Five key themes emerged this year, he said. Firstly, chief executives have "become more purpose-driven in the face of COVID-19 and the associated economic crisis... nearly 80 percent of global and New Zealand CEOs surveyed, feel a stronger emotional connection to their organisation's purpose since the crisis began." Secondly, with the walls put up around the world to prevent the spread of the virus, bosses are now having to look locally for new talent. "CEOs rely on top talent to execute change, and what we're seeing and hearing from CEOs in the face of the current crisis is they're making decisions in days that previously would have taken months, and they're executing change in a matter of weeks that previously would have taken years," said Pritchard. Those skills aren't always held by existing staff, he said, and there's no longer a global pool of talent to choose from. "Borders are shut and the global market for talent isn't as open as it used to be." Thirdly, half of the chief executives surveyed said their firms are now far more digitised than they expected to be at this stage, "which you might expect with the limitations of COVID-19 on physical operations". "Since February, digital sales channels have near doubled, marketing spend has shifted from traditional media to online and social channels, and all this change has led to increased customer expectations for their online experience," said Dinesh Naik, KPMG head of retail. This growing reliance on technology has made cyber risk CEOs' number one threat to growth, according to the survey. Fourth, in January 30 percent of CEOs said climate change was the biggest threat to their business growth - now it's only 14 percent. Pritchard said that was surprising. Lastly, supply chain issues are ranked second in Australia and globally in terms of threats to growth, but only 11th in New Zealand - this too surprised Pritchard. "We're an exporting nation and highly dependent on some quite complex supply chains. But when we went in behind the data... by July, when we were surveying CEOs in New Zealand, the most significant period of domestic operational disruption caused by the COVID-19 lockdown was over." Slightly more than two-thirds of CEOs said they had to rethink their supply chain approach due to the pandemic. New Zealand's economy held up better than most other countries' after appearing to have eliminated the virus earlier this year. Community transmission reemerged this month, putting the country's biggest city back under level 3 restrictions.