EY Finds CEOs Prioritise AI Investments Over Sustainability

EY: 50% of survey respondents are prioritising AI to improve enterprise growth
EY’s CEO Outlook Pulse survey reveals AI is taking priority over enterprise green targets, with CEOs struggling to justify sustainability business cases

EY has found that technology investments, including AI, remain a crucial strategic priority.

The company’s Outlook Pulse survey confirms that UK-based CEOs in particular are feeling more optimistic about their immediate prospects, leading them to favour AI investments. This, according to EY, is so that they can gain a competitive advantage within the global business landscape.

However, the survey also confirms that AI is being prioritised over sustainability targets. Nearly half (47%) of CEOs have confirmed that they are struggling to present a strong business case for sustainability investments.

As a result, strategic priorities are being placed with technology, with 50% of survey respondents prioritising AI to improve enterprise growth and productivity. This is closely followed by improving data management and cybersecurity (49%). 

Harnessing AI with sustainability in mind

AI is fast becoming the main event for lots of organisations, with technology investments continuing to dominate business strategy moving forward.

However, during a time of immense energy demand, partly as a result of rapid technological growth, EY says that achieving net zero and making good on sustainability pledges is set to also remain a priority for companies in the long-term.

EY study: The key facts
  • 61% of CEOs feel more optimistic about their company’s profitability compared with 12 months ago
  • 56% of CEOs said sustainability was a higher priority compared with 12 months ago
  • 98% of respondents said they will be actively pursuing a strategic transaction in the next 12 months

Over half of respondents (56%) to the survey highlighted that sustainability was a higher priority compared with 12 months ago. However, CEOs are now facing challenges in implementing robust environmental, social and governance (ESG) strategies, with 47% agreeing that their management teams struggle to present a strong business case for sustainability investments that clearly outlines their financial benefits. 

Likewise, 71% agreed that shareholders are more concerned with their company meeting quarterly earnings targets than its performance against long-term sustainability metrics. In order to prioritise sustainability, EY suggests looking at it in connection with technological innovation.

AI could hold great potential to accelerate sustainability efforts around the world. Respondents to the EY survey believe in these opportunities, with 70% agreeing that technology and AI hold the answer to many of the environmental challenges society currently faces.

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Also in 2024, Gartner found that sustainability and digital sovereignty will be the top consideration when businesses select public cloud generative AI (Gen AI) services.

“For UK CEOs, by far the most compelling immediate priorities involve enhancing existing technology to improve growth and productivity, as well as boosting data management and cybersecurity,” says Silvia Rindone, UK&I Managing Partner for Strategy and Transactions at EY. 

“However, this has come at the expense of achieving sustainability targets which are now considered more long-term priorities. This divergence between short-term financial returns and decarbonisation is shortsighted, so business leaders must ensure they remain committed to delivering these targets to move towards a more sustainable future.”

Strategic partnerships remain crucial to business success 

Strategic transactions remain high on the agenda for UK CEOs, with 98% telling EY they expect to pursue transaction initiatives over the next 12 months. Of these, 42% said they were doing so to access new geographies, 39% to secure supply chains and 36% to acquire technology, new production capabilities or innovative start-ups.

Silvia adds: “UK CEOs are using strategic transactions to achieve their near-term priorities, with most looking to divest assets over the next 12 months to future-proof their business. It’s imperative that boards look beyond the short-term efficiency and productivity gains these transactions can bring and ensure they are continuing to focus on core operations, while actively looking for opportunities to raise capital to invest in their remaining portfolio.”

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