Most CEOs leading the world’s largest companies remain committed to prioritizing environmental, social and governance (ESG) issues, despite growing concerns over the threat posed by current economic and geopolitical headwinds.

That is the conclusion of a major global survey from consultancy giant KPMG, which quizzed CEOs at over 1,300 firms with annual revenues greater than $500 million — of which a third boasted revenues of over $10 billion — to gauge their views on the greatest risks and opportunities facing their businesses over the next three years.

Geopolitics and political uncertainty were ranked as the greatest risk to growth in this year’s survey, despite these issues not even reaching the top five of key concerns in the same poll in 2022, KPMG said, underscoring the growing desire among corporate leaders for stable business investment environments worldwide.

The consulting giant said the “persistent flux” in global politics, trade dynamics and international relations — most notably demonstrated by Russia’s war in Ukraine and tensions between the West and China — had compelled CEOs to reassess their strategic priorities and enhance their focus on business resilience.

The survey also found over three-quarters of CEOs — 77 percent — believe rising interest rates, tightening monetary policies and cost of living pressures risk exacerbating the threat of a global recession and negatively affecting their businesses over the next three years.

But despite these headwinds, the survey indicates that over 70 percent remain confident about the global economic outlook for the next three years, a proportion broadly unchanged from last year’s survey.

Moreover, the survey findings indicate most CEOs remain committed to embedding ESG practices into their businesses, despite a polarizing discourse on ESG issues which has fueled a backlash against sustainable investment and governance practices among right-wing U.S. policymakers.

“Despite increasing economic and political uncertainty, the latest survey findings reflect a growing sense of resilience and focus from CEOs on ESG,” said John McCalla-Leacy, KPMG’s head of global ESG.

“Topics like the climate crisis have become polarized in some regions, but business leaders have told us they’re prepared to take tough, ethical decisions and stances to ensure that they play a positive role in driving the transition to more sustainable operations, which benefits everyone.”

Just shy of 70 percent of the CEOs surveyed said they had fully embedded ESG strategies into their businesses. Meanwhile, around half anticipate a return on their ESG investments within the next three to five years, although many view the short-term value of ESG investments mainly in terms of boosting their customer relationships, brand reputation and M&A strategies, the survey found.

Indeed, delivering on ESG commitments appears to be a critical concern for CEOs, driven by pressure from both investors and customers. More than two-thirds of respondents said they were worried that their progress on ESG was not strong enough to stand up to stakeholder scrutiny, while 64 percent said they believe public expectations on ESG-related issues was on the rise as trust in government continues to decline.

Awareness and dialogue around ESG issues also appears to have shifted, with 35 percent of CEOs revealing their firms have changed the language they use to refer to ESG both internally and externally, which KPMG said signals a trend towards getting more specific about each individual aspect of the acronym “and prioritizing their efforts where they can have the most impact.”

“With continued financial and geopolitical pressures ahead, it will undoubtedly be a test of nerves for many CEOs, but the data shows that the vast majority of senior executives are now fully onboard and recognize that E, S and G are no longer optional extras for successful, sustainable businesses,” said McCalla-Leacy.

The findings came as many business leaders have grown increasingly frustrated by the uncertainty surrounding the U.K.’s climate and net zero efforts, particularly in the wake of the recent rollback of several key green policies announced by Prime Minister Rishi Sunak over the past fortnight.

Last month, Tesco CEO Ken Murphy called on political leaders from all U.K. parties to stand by their net zero commitments and deliver the stable policy environment needed to enable businesses to invest in green projects and technologies.

And this week Murphy doubled down on his calls for more ambitious climate policies in the wake of the Conservative Party Conference, as he called for further support from governments to help businesses hit their sustainability targets.

“To the government, I would say two things: one, the affordability of sustainability is a challenge — helping industry to invest in innovation is really important; and two, getting regulation right is really important,” he said in comments reported by The Times.

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