With increasing focus on environmental, social and governmental (ESG) issues over the past decade, more and more CEOs are renewing their commitment to ESG and sustainability as a source of value creation, according to the latest KPMG CEOs survey.

In 2015, CEOs ranked environmental risk as their least concerning priority risk; fast-forward to 2024 and almost a quarter (24 per cent) acknowledged that failing to meet ESG expectations could give their competitors an edge.

“In our islands, we have recently seen first-hand the encouraging shift of many CEOs prioritising sustainability, with most planning to formalise their ESG strategies within the next two years,” Arnaud van Dijk, head of ESG, KPMG Islands Group commented.

“At the same time, many corporates in our region indicate that they are grappling with meeting the sustainability reporting requirements. Reporting in a meaningful way to stakeholders is taking up significant resources,” he added.

Despite the increasing politicisation of the ESG agenda in some countries, leaders are particularly sensitive to the impact ESG issues can have on the trust in and the reputation of their organisations.

About 76 per cent of CEOs said they would be willing to divest a profitable part of the business that was damaging reputation, while 68 per cent of CEOs say they would take a stance on a politically or socially contentious issue, even if the board raised concerns with them doing so.

“The exciting opportunity now is unlocking the full potential of ESG—turning these strategies into real value that drives both meaningful impact and long-term business success,” van Dijk explained.

In response to growing stakeholder and external pressures, CEOs also appear to be shifting in how they communicate their ESG efforts. In this year’s global survey, 69 per cent of CEOs revealed that while they’ve retained the same climate-related strategies over the last 12 months, they’ve adapted the language and terminology they use to meet changing stakeholder needs.

Now in 2025, 30 per cent said the greatest barrier to achieving their climate ambitions is the complexity presented by the decarbonisation of their supply chain—an issue further compounded by current geopolitical tensions around the world and activities impacting major global trade routes.