A stark 40% of global CEOs think their organisation will no longer be economically viable in 10 years’ time, if it continues on its current course.

Over 4,400 CEOs from 105 countries were responding to PWC’s 26th annual global CEO survey. The outlook was consistent across a range of economic sectors.

Over half of CEOs cited changing customer preference, regulatory change, skills shortages and technology disruption as the factors likely to impact on their industry’s profitability in the next decade, as 40% flagged the transition to new energy sources and supply chain disruption.

While none of these are new issues, their scope, impact and interdependence are growing, according to PWC, with varied magnitude across industries and geographies.

CEOs in Japan and China were most concerned about the long-term viability of their business models, while CEOs in the United States were found to be most optimistic.

Short- and medium-term risks

CEOs reported that they are most exposed financially to inflation, economic volatility and geopolitical risk, reflecting the challenges facing businesses today.

However, looking longer to the next five years, cyber risks and climate change combine with inflation, economic volatility and geopolitical risks as key business risks.

The majority of CEO respondents project that global economic growth will decline over the next 12 months.

However, confidence in their own organisation's prospects has fallen by about 25%, which is larger than in any of the past 15 years.

Time running out on climate change

Most global CEOs surveyed expected some impact from climate change in the next 12 month, where 50% expect a moderate, large or very large impact on their cost profiles and 42% on their supply chains.

The study indicates that many companies are trying to decarbonise, innovate and devise climate strategy in parallel. Almost 60% are developing a strategy for reducing emissions and mitigating climate risks.

The CEO outlook reported is the bleakest regarding global economic growth since PWC started asking the question 12 years ago.

Yet, the finding that four in 10 businesses think their organisation will not be economically viable in a decade if they continue on their current path stands out.

It underlines the breadth and magnitude of challenge facing organisations in the short and medium term.

Questioning the business's economic viability if it stays on its current path is a good litmus test for all businesses at this time.

Robustly challenging the business's ability to withstand short- and long-term issues, new competitive challenges and new costs such as carbon and nature costs would be a good exercise this quarter.

Of course, it’s also worth considering how your customers and different markets would stack up also.