U.S bosses out of step on climate change

Jan 25 2007 by Nic Paton Print This Article

Fewer than a fifth of American chief executives are worried about the threat from climate change, something that puts them increasingly out of step with their colleagues in Europe and Asia Pacific.

Scepticism among American chief executives about the threat from climate change is leaving them increasingly at odds with business leaders around the world, a new survey has suggested.

The report by consultancy PricewaterhouseCoopers has found that, led by President George Bush's robust position on the issue, fewer than a fifth 18 per cent of North American chief executives are concerned about climate change.

This compared with two out of five in Britain and nearly three out of five in Asia Pacific.

While American CEOs may be happy in their glorious isolation on this issue, they are also increasingly worried that cultural differences are stopping them successfully carrying out mergers and acquisitions.

The PwC study found North American bosses anticipated encountering more obstacles to M&As than chief executives elsewhere, with more than half citing cultural issues as a significant obstacle.

Worryingly, too, there appeared to be less appetite for cross-border M&As among U.S bosses.

Nearly half 45 per cent of British CEOs had completed a cross-border merger or acquisition in the past 12 months, compared with just over a quarter around the rest of the world.

Appetite for cross border mergers and acquisitions was, overall, strongest in Western Europe, which was also the most popular target region for CEOs.

Overwhelmingly, gaining access to new markets and customers was the main purpose given for cross-border M&A, cited by nearly two-thirds of CEOs.

However, the survey also cautioned that just 14 per cent of British CEOs said they were planning to complete such a deal in the next 12 months.

The main obstacles to cross-border M&As cited by CEOs across the board were cultural issues and conflicts, differences in regulations and unexpected costs.

CEOs from central and eastern Europe were generally more relaxed about the issues raised by cross border M&A, although they had significantly higher worries about political interference than CEOs in the rest of the world, said PwC.

In the UK, more than three quarters of CEOs were concerned about over-regulation and a lack of key skills.

A downturn in major economies was also cited as a concern that could dent confidence, as was low-cost competition and technology disruptions.

In Asia Pacific, concerns were particularly acute about a looming scarcity of key skills, cited by nearly nine out of 10 CEOs, compared with 72 per cent globally.

Around half of British CEOs were concerned about and spending resources on non-business risks such as terrorism and climate change.

When it came to business confidence, British CEOs were very upbeat about their prospects for revenue growth, with confidence levels at record levels.

Nearly twice as many CEOs now felt very confident about revenue growth over the next 12 months compared with five years ago.

And more than 90 per cent of the 1,100 CEOs surveyed across 50 countries were upbeat about revenue growth in the next 12 months.

Longer term this confidence was undimmed too, with 93 per cent confident of achieving revenue growth over the next three years.

Business expansion would be fuelled by improved market penetration, geographic expansion and M&As, they predicted.

Half of British CEOs were "very confident" and 45 per cent "somewhat confident" about the prospects for their companies' revenue growth over the next year; with half feeling more confident about revenue growth than they did 12 months ago, the survey added.

Kieran Poynter, UK chairman, Pricewaterhouse LLP said: "CEOs in the UK appear to share the confidence of their counterparts around the world for revenue growth in the coming year.

"UK businesses appear to be ahead of the curve in their global expansion to date, but they cannot become complacent about the competition," he added.

"A large number of businesses in emerging as well as developed countries expect to expand into new territories in the coming year," he concluded.