Posted: 15 Feb. 2022 5 min. read

CFOs: eyeing off talent and ESG action

When it comes to COVID, 2022 may not be off to the smooth start we were all longing for, but Australian CFOs are still optimistic about the year ahead. In the latest edition of Deloitte’s biannual CFO Sentiment, uncertainty about economic and financial conditions has been rated as being at an all-time high, even more so than in June 2020 after the pandemic first hit.

CFOs know to expect the unexpected, and in spite of this, the survey’s net optimism rating (the share of CFOs that are optimistic minus the share that are pessimistic) of 79% is a strong result, just marginally below last survey’s 82%.

And at 23% (see Chart 1), the current survey sees the highest share of CFOs having reported being ‘highly optimistic’ in CFO Sentiment’s history. The bottom line? CFOs remain confident despite uncertainty with the response suggesting Australian businesses are in a strong position to deal with the challenges ahead.

Chart 1: How do you feel about the financial prospects of your company going forward?

Source: Deloitte CFO Sentiment

One thing CFOs are certain about is that difficulties in securing and retaining key talent will pose a risk to their businesses through 2022. This was on their radar six months ago, but now concern has only grown, with 93% of the CFOs surveyed rating it as one of the top risks on their mind this year. A global economic slowdown and recession is also still a concern, but to a comparatively smaller share (56%) of CFOs. 

Amid COVID disruption, environmental, social and governance (ESG) is increasingly important for many Australian CFOs. They recognise that investors, customers and staff all want action on ESG, and they are responding, although it’s still a work in progress.

Of the eleven ESG activities identified, only 13% (on average) of CFOs believe they have completed them or that the activities are in place, while 70% (on average) believe these activities are planned or in progress (see Chart 2).

Chart 2: Select the description that best describes the status of the following ESG activities in your organisation

Source: Deloitte CFO Sentiment

Further, a lack of capability and a lack of resources are both listed as key barriers to ESG efforts. Some 60% of surveyed CFOs drive/co-drive ESG or have oversight of it in their organisation, but of this group only 22% feel confident in doing so. More than half (57%) are somewhat confident and working on actively upskilling. That leaves a further 22% who don’t feel they have the skills, capability, or support they need to contribute meaningfully on ESG, despite understanding the urgency of action.

More about our authors

David Rumbens

David Rumbens

Partner, Deloitte Access Economics

David is a macro economist with extensive experience in applied economic and quantitative analysis of the Australian economy, along with considerable experience in labor market analysis.  David is a regular commentator on macroeconomic trends, and prepares a weekly economic briefing newsletter.