## ESG: A Strategic Business Imperative
The narrative surrounding Environmental, Social, and Governance (ESG) considerations has often been framed as a moral obligation or regulatory burden. However, the KPMG 2025 CEO Outlook findings, released this week, highlight a significant shift. Business leaders now understand that ESG is not just beneficial for the planet but is fundamentally advantageous for business. This shift reflects strategic foresight in addressing climate change, biodiversity decline, and societal challenges, which directly affect financial performance, organisational resilience, and enterprise value.
A recent survey of over 1,300 CEOs globally reveals a pragmatic recognition of the link between environmental and social factors and financial performance. Despite uncertainties in the global economic outlook, CEOs are integrating ESG considerations into their core growth strategies. They view ESG as essential for navigating market volatility and securing future value.
The KPMG 2025 CEO Outlook presents a growing confidence in achieving net-zero targets. Sixty-one per cent of CEOs now believe they can meet their 2030 targets, marking an increase from 51 per cent in 2024. In Spain, 82 per cent of leaders are confident of meeting their goals, while in Australia, just under half of CEOs believe they can reach net-zero. These findings reflect an understanding of the operational efficiencies, innovation opportunities, and risk mitigation benefits associated with decarbonisation. Leaders are recognising that investing in sustainable practices can lead to reduced operating costs, enhanced brand reputation, and improved access to capital.
The survey also indicates how sustainability is intertwined with other strategic priorities. Sixty-nine per cent of CEOs believe technology, such as AI, has the potential to support their company’s climate and sustainability objectives. More than three-quarters agree that AI offers opportunities to support responsible innovation aligned with climate goals.
The 2025 KPMG CEO Outlook confirms that forward-thinking business leaders are moving beyond superficial engagement with ESG and sustainability. They recognise that climate change, resource scarcity, and evolving societal expectations are fundamental forces reshaping markets and competitive landscapes. By proactively addressing these challenges through robust ESG strategies, CEOs are not only safeguarding their businesses but are also building more resilient, profitable, and sustainable enterprises for the future. While these findings offer optimism, there remains a need for greater commitment, collaboration, and action to reinforce the financial business case for sustainable action. At KPMG, we are working with organisations like the World Business Council for Sustainable Development (WBCSD) to play our part in solving this challenge. This is the era of pragmatic sustainability, where collaboration can reinforce the link between long-term value creation and responsible business practices.
**Simon Weaver, Global Head of ESG Advisory, KPMG International**
