UAE CEOs confident of strong earnings this year

ESG and AI investments are top priorities: KPMG report

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Published: Thu 23 Nov 2023, 11:17 PM

UAE CEOs are feeling the pressure of adopting AI technology to drive business competitiveness, with 56 per cent agreeing that AI is a top investment priority even though most don’t expect to see a significant return on their investments for three to seven years. This is according to the findings of the latest edition of the KPMG UAE CEO Outlook report, which polled 1,325 CEOs worldwide, including more than two dozen business leaders in the UAE.

Despite Gen AI witnessing acceleration, many respondents don’t feel confident about regulation within the space and believe this could impact their organisations’ success. However, the UAE Government is already addressing these concerns by appointing the UAE Artificial Intelligence and Blockchain Council to propose AI policies and develop guidelines for AI adoption in the future.

KPMG’s research also revealed that ESG is rapidly climbing the business agenda, with 64 per cent of CEOs in the UAE fully embedding ESG as a strategy, although this is still below global peers at 69 per cent. UAE business leaders view it as key to building brand reputation and attracting the next generation of talent, even though a vast majority (88 per cent) expect it will be at least three years before they see major returns on ESG investments.

Emilio Pera, CEO and senior partner at KPMG Lower Gulf. — Supplied photo

Furthermore, an overwhelming 88 per cent of local CEOs reported strong earnings and growth prospects this year, including increased revenue compared to 2022, in contrast to only 77 per cent of global CEOs. An impressive 84 per cent expected their businesses to grow by more than 2.5 per cent over the next three years, and despite inflation and geopolitical pressures, 40 per cent have a high M&A appetite.

Emilio Pera, CEO and senior partner at KPMG Lower Gulf said: “The findings of the latest edition of the KPMG CEO Outlook Report reveal that UAE business leaders feel relatively insulated from global instability, and consequently, remain focused on business growth. Many are deploying new strategies to accelerate their growth ambitions in 2024 and beyond – including investing in emerging technology and expanding their focus on environmental issues. This points to a growing awareness and commitment to transition to a digital future to deliver improved products and services that reduce environmental impact and create social benefit.”

The research also showed that UAE CEOs favoured a more collaborative leadership style, as 72 per cent expect employees to be back in the office full-time, up from 60 per cent last year. Only 20 per cent envision hybrid working, compared to 27 per cent of CEOs worldwide, while eight per cent plan to allow fully remote work. This reflects a belief among UAE business leaders that shared management and operational responsibilities lead to greater success. While most CEOs worldwide plan to lure employees back to the office with favourable assignments and other perks, most local leaders (60 per cent) said they were either neutral or not likely to reward in-person workers, implying that on-site work would simply be expected.