Build Resilience. Protect Value. Deliver Growth.

The realities of climate change are in greater evidence than ever before. As the world emerges from the COVID-19 pandemic, governments and businesses are facing crucial questions about how to best maintain and expand energy access in all corners of the globe in a manner that is sustainable and equitable.

Meanwhile, the threats from rising temperatures and a failure to adequately address climate change have intensified. New policy frameworks are emerging that challenge the status quo, creating both risks and opportunities for companies across all industries.

Read more

• 36% of G20 business leaders claim that they are under extreme pressure to improve ESG and Sustainability over the next 12 months.
• 31% expect to be investigated by regulatory or government bodies in relation to their sustainability and ESG practices.
• 86% agree that they have been spending more resources on ESG and sustainability, however, 28% still agree that their company is falling short when it comes to their climate action plan and 66% agree that they do not currently have sufficient ESG or sustainability expertise to cope with increasing scrutiny.
• 88% say they are shifting their approach to ESG from managing risk to identifying new business opportunities, an increase from 85% in the September 2021 report.
• G20 companies expect media scrutiny on a range of areas, with significant areas of concern relating to ESG related topics, including employee wellbeing (38%), sustainability and environmental impact (35%), and diversity, inclusion and equality (30%).

• 36% of G20 companies cite a surge in energy prices as a concerning resilience scenario. This is intertwined with growing concerns amongst G20 business leaders around climate change – including alarm at the rate at which economies are tackling the issue (cited by 26%) and how measures to tackle this might cause economic damage if they are implemented without a clear strategy or strong coordination across fragmented markets (cited by 24%).
• Across the G20, other major C-suite concerns include changes to global tax regimes (cited by 25%), the risk of large-scale cyber attacks (24%), escalation of US-China political tensions (23%), unsustainable government debt levels (23%), sanctions, export controls and tariff increases (23%) and an increase in corruption (18%).
• There are also concerns regarding disruptive megatrends, with 21% of G20 companies worried about technology rendering their company’s products obsolete (21%) and industries becoming unattractive to the next generation of talent (16%).
• Data privacy issues (which 55% are preparing for) and cyber attacks (53%) are the top risks which G20 companies are demonstrating the greatest proactivity in addressing in 2022.

• The diversity of these concerns demands that businesses be fully prepared, with a 360-degree perspective of different types of risks, to ensure comprehensive resilience in the face of uncertainty.

• The number of G20 companies impacted by a cyber incident rose by 6% over the last year, and 85% report some form of weakness in their incident response capabilities.

• 37% expect media scrutiny on data privacy, and 58% do not fully understand the cyber risks posed by third-parties.

• 29% of G20 business leaders report that their crisis communication plans for cybersecurity are not sufficient, yet 88% state that their organisation has become more agile by using predictive analytics to respond to change in real time.

• 43% of Chief Information Security Officers said new and emerging technologies, like blockchain and artificial intelligence, are the top cybersecurity risks.

• 34% of companies are still managing the risks of cyber attacks reactively, and 9% are not managing these risks at all.

• Business model innovation, customer experience reinvention and the integration of new technologies have become a key priority for all resilient organisations: 80% of companies agree that their business model needs to fundamentally change in order to maintain or restore competitiveness.
• 30% of companies have experienced a shortage of talent and skills in their business over the last 12 months, and 95% expect to continue with hybrid working – with 45% of G20 business leaders expecting their employees to work remotely at least 50% of the time as part of the ‘new normal’.

• 18% of G20 companies report that their business model became outdated in the last 12 months, whilst 37% say they are mainly reactive rather than proactive when it comes to addressing this issue.

• 88% state that they are planning on adjusting their approach to retain and attract top talent in 2022.

• 42% of companies are under extreme pressure to integrate technology into their working practices, and 66% report that they are struggling to embrace digital transformation.
• The changing risk landscape is also underpinned by  disruptive economic models driven by blockchain-powered technologies such as cryptocurrency, NFTs and other digital assets: 66% of G20 businesses are currently piloting or exploring how blockchain and digital assets can play a role in their products or services.

• Almost a third of G20 businesses (31%) are either currently facing, or expect to face, investigations by regulatory or government bodies in relation to ESG and sustainability in 2022. This makes it the most commonly reported area of concern around investigations, followed by tax practices (28%) and use of third-party data (27%). Over one in five (22%) expect investigations related to market dominance and/or antitrust, and 79% expect increased regulatory pressure around virtual assets in the next 12 months.

• 44% of G20 companies have invested, or plan to invest in the next 12 months, in dedicated technology to conduct due diligence, monitoring and investigations.

• However the risk of compliance vulnerabilities being exploited by bad actors is not managed proactively by half of the G20 businesses surveyed: Only 51% are fully proactive when it comes to financial misstatement and fraud. In addition, 33% of G20 business leaders stated that their detection and analysis capabilities are weak. A further 13% state that they do not have adequate resources to manage financial crime and sanctions risks.

• G20 companies' top 3 priorities for legal spend in 2022: Adapting to new regulation and legislation (16%), internal investigations and remediation (both 14%).

• While more than two thirds (69%) of G20 companies agree that the pandemic has caused lasting damage to their industry, our data shows that companies have developed greater financial resilience over the past year, with 58% having returned to or exceeded pre-pandemic levels for turnover and number of employees.
• Considering the resilience-damaging scenarios, more than 10% of the turnover lost by G20 companies surveyed was caused by disruption to supply chains – the highest proportion after shortage in workforce and skills (12%) and cyber attacks and threats (11%). Despite this, only 49% are taking proactive steps to manage supply chain disruption risk. In addition, 66% report that they are struggling to embrace digital transformation. As a result, 72% expect to require operational restructuring in 2022.

• Our data also reveals a strong rebound in expected M&A activity, which serves as a further indication of financial recovery. In February 2021, 13% of G20 companies said they did not expect to conduct any M&A – this has dropped by 5 percentage points to just 8% in January 2022. G20 businesses are most driven to conduct M&A to enter new markets (40%), to acquire new products (37%), and to increase share in current markets as well as acquire new technological platforms and systems (both 35%).