93 percent of CEOs believe business should have a positive impact on society, according to a new survey. The Global Leadership Survey by YPO shows the changing attitudes of business leaders, who increasingly feel responsible for tackling climate change and supporting the UN’s Sustainable Development Goals through CSR programs. We were there for the report’s launch at the World Economic Forum (WEF) in Davos.
The Global Leadership Survey identifies the priorities of CEOs and the next generation of business leaders. Between 23 December and 4 January, YPO polled more than 4,000 senior executives in 110 countries. More than 2,200 are chief executives and nearly 2,000 are younger than 31. The survey was carried out by YPO, which is a collection of more than 27,000 chief executives in 130 countries who run businesses which turnover $9 trillion every year and employ 22 million people.
Environmental, Social and Governance (ESG) considerations have gained traction in recent years, and the survey confirms the trend. Key findings include:
* 93 percent of CEOs and the younger generation believe business should have a positive impact on society beyond pursuing profits and wealth.
* 93 percent said purpose drives how they run their company.
* 74 percent of CEOs say they have changed their perspective on the role of leadership in the past five years—they now believe that businesses should play a stronger role in society.
* CEOs and younger leaders both picked climate change as their top area of concern related to the UN’s Sustainable Development Goals. Other top choices were education, poverty, peace and the availability of work opportunities.
* Young people are the most concerned about the environment—55 percent of young leaders said they are acting to reduce their company’s environmental impact, compared to 37 percent of current CEOs.
* 67 percent said society as whole is a “very important” or “extremely important” stakeholder of a business, and 66 percent said the same of the planet.
The report was launched in front of a packed audience at the Hilton Hotel in Davos on Friday 25 January. Its authors said the report is clear evidence of a change in thinking of the current and next generation of business leaders.
The report notes, “Business leaders, and society in general are moving from considering a business’ interest completely focused on its traditional shareholders to having a significant impact on more stakeholders, including society as a whole. Chief executives are working to ensure that their businesses make a positive impact.”
The motivations for this shift are not purely altruistic. In addition to mitigating risk of compliance failures or reputational damage, businesses have noticed that prospective customers, investors and employees are more likely to buy from, invest in and work for ethical companies. As the survey shows, more companies are realising that ‘good profit’ is possible: greater investment in CSR and placing purpose at the heart of their business strategy will lead to more profitability and sustainability in the future.
Maurice Ostro, Vice-Chair of YPO, said the report’s findings have been confirmed by other reports and conversations during this week’s WEF summit. “Here in Davos 2019, we have had multiple reports that make it very clear that the purpose agenda is important, that business needs to be a force for good,” he said. “Our challenge is how do we do that in a collaborative manner so that governments, NGOs and corporates work together to be an effective force for good.”
1. Check out another post from this year’s World Economic Forum at Davos.
2. Read our eBook on Ethical Expectations to understand what’s driving the trend toward impact investing.