Sustainability investments decline as Singapore CEOs focus on AI

About 6 in 10  CEOs have deprioritised sustainability since last year.

Decarbonisation has taken a backseat in the investment priorities of Singapore CEOs as many have shifted their focus to artificial intelligence (AI).

According to EY, 33% of CEOs focus on technology investments, including AI, to boost growth and productivity within the next 12 months.

Besides technology, CEOs also prioritise data management and cybersecurity improvements (33%) and employee training and reskilling investments (23%).

EY ASEAN Strategy and Transactions Leader Vikram Chakravarty emphasised that CEOs must consider all aspects of AI and cybersecurity to "fully exploit the potential of technology on their company’s business performance and growth."

As more CEOs focus on technology, sustainability investments are increasingly deprioritised in Singapore.

Data from EY showed that almost six in 10 (58%) of Singapore CEOs have deprioritised their focus on sustainability from 12 months ago. 

When asked why, most of them cited challenging economic or financial circumstances (43%), whilst some (15%) stated a focus on other boardroom priorities. 

Additionally, CEOs worry about being accused of greenwashing (71%), and several (70%) indicated that shareholders prioritise earnings targets over long-term sustainability performance.

CEOs (73%) added that technology and AI hold the answers to the key sustainability challenges faced.

"Sustainability has obviously slipped as a business priority among CEOs. However, with governments continuing to focus on sustainability through regulations such as requirements for Singapore businesses to make climate-related disclosures in their sustainability reports, business leaders should not lose sight of their decarbonisation and sustainability strategies," Chakravarty said.

Meanwhile, the study also found that CEOs (100%) plan to pursue transaction opportunities in the next 12 months.

These transactions include IPOs, divestments or spin-offs (63%), joint ventures and strategic alliances with third parties (50%), and mergers and acquisitions (45%).

CEOs who want to pursue acquisitions in response to changing customer behaviour (50%) and growing market share (39%).

Accessing new geographies ( 33%) also stood out as the top driver for acquisition.