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November 15, 2023

EU CEOs confident they will get green investment support

Female chief executive
Almost 90% of the European CEOs surveyed say they are optimistic that policy actions in the next couple of years will strengthen incentives for green investments (Photo: Pressmaster/Envato)

Wars, rising geopolitical tensions and continuing high energy prices are not filling business leaders with much confidence. But expected actions from policymakers to boost clean energy and the circular economy offer some hope for the coming years

European chief executives are largely optimistic that policymakers will take ambitious actions to strengthen incentives for green investments in the next three years, according to a survey from the The Conference Board, a US-based business membership club, and the European Round Table for Industry.

Its 2023 “Measure of CEO confidence” study is a fairly gloomy read, but among the downbeat expectations about the economy, which are also prevalent among CEOs in China and the US, relatively positive vibes about the move to net zero offer some bright spots.

Almost 90 per cent of European CEOs surveyed, a larger share than in any other area of policy action listed, are “somewhat” or “very” optimistic that policy actions in the next couple of years will strengthen incentives for green investments. Only 13 per cent of respondents say they are not optimistic on that front.

A similarly upbeat mood was found around actions to strengthen the circular economy. Seventy-four per cent of CEOs say they expect to see policymakers launch ambitious actions to support higher circularity, such as the reuse or recycling of materials or products, in the EU over the next three years. Twenty-four per cent are less enthusiastic, while 2 per cent say they “didn’t know”.

There is, however, less positivity around energy infrastructure, with only a thin majority (54 per cent) of CEOs saying they expect policymakers to launch ambitious actions to boost action in this area. And more than half of the CEOs surveyed (57 per cent) are not optimistic about policymakers taking ambitious actions to counteract skills shortages in Europe.

A Eurobarometer study published this week concluded that skills shortages represent a serious challenge for small and medium-sized companies across the EU. “Skills shortages are a growing problem for the European economy,” said EU commissioner for the internal market Thierry Breton in a statement. The EU executive is “already working on addressing skills shortages in key strategic sectors like batteries or other net zero technologies”, he added.

As part of its recent wind energy package, the European Commission has announced large-scale skills partnerships for renewable energy and European net zero industry skills academies, including one dedicated to the wind sector, to help ensure the EU has a workforce trained to lead and implement the energy transition.

Incoherent regulations?

Away from the world of sustainability, CEOs seem to find little to be optimistic about, with a majority (56 per cent) suggesting a “complex and/or incoherent regulatory environment” will have a “very important” impact on EU competitiveness over the next three years. An additional 30 per cent cite the expected impacts of the regulatory environment as important.

“Excess bureaucracy and complex or unnecessary regulation can hinder companies’ ability to invest and innovate,” says The Conference Board report. “With Europe in the midst of a green and digital transition, regulatory clarity and consistency are imperative to drive innovation, attract investment, bolster growth, and eventually restore the region’s competitive position in the world.”

The CEOs in the survey were, however, not asked to explain on which policy areas their regulatory concerns focused, and so it is impossible to know if regulations aimed at increasing sustainability reporting and disclosure were included in their thinking. Certain EU policymakers seem increasingly focused on fighting against such requirements in the name of “simplifying” life for businesses.

The company leaders also cite high energy prices and exposure to geopolitical tensions as likely to have a dampening effect on the economy.

A service from the Financial Times