PwC’s Global Investor Survey 2023

Trust, tech and transformation: Navigating investor priorities

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  • Insight
  • 10 minute read
  • November 15, 2023

Investors want to know how companies are managing sustainability and emerging technologies like AI, but they lack confidence in much of the information they have about both. It’s time for companies—and their leaders—to take action.

By James Chalmers and Nadja Picard

The Leadership Agenda

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Investors want to better understand how companies are managing crises and staying resilient, while creating and protecting long-term value in today’s fracturing world. They are looking closely at two areas—emerging technology and sustainability—to gauge whether companies can seize opportunities for reinvention and business transformation, or will instead succumb to rivals.

These are among the findings of PwC’s Global Investor Survey 2023. The survey, now in its third consecutive year, queried 345 investors and analysts across geographies, assets classes, and investment approaches for insights into the factors that most affect the companies they invest in and cover. Through the survey, and follow-up interviews with investment professionals, we explored how investors assess threats and opportunities, allocate capital and determine what is important to their decision-making. We also asked about the degree to which they trust—or mistrust—the information they have available to make decisions. (For more, see the Note on methodology at the end of this report.)

In our interviews, we heard repeatedly that investors want clearer, more consistent and more comparable information on the material issues facing companies. They want a better grasp of how companies are approaching the potential trade-offs between short-term crises and long-term business transformation. Addressing this challenge will benefit companies, too, as boards and management teams seek to better engage with their stakeholders and ensure that material risks and opportunities are embedded deeply in governance and strategy, and are transparently reported.

Among the key findings:

Economic worries ease

Investors’ worries about macroeconomic volatility and inflation have declined from last year’s high levels, although these risks remain significant relative to others. ‘A continuation from…last year is inflation,’ said one analyst we spoke to. ‘We’ve had free money for 12 or 13 years; now the cost of capital matters.’ Whilst less significant relative to others, it is also important to note that exposure to climate change and social inequality grew compared to last year—highlighting a shift in focus for investors.

A focus on technology

Artificial intelligence (AI) and emerging technologies are areas of prime investor interest. Sixty-one percent of investors said that accelerated adoption of AI is very important or extremely important, despite concerns about the risks. Investors identified technological change as the most likely factor to influence how companies create value over the next three years; and investors are interested to know how those technologies will be deployed and used in order to support their investment analysis.

Sustainability matters

Three-quarters of respondents said that how companies manage sustainability-related risks and opportunities is an important factor in their investment decision-making. Our data also shows that they want better information, including the cost of meeting sustainability commitments and a clear road map for achieving them, combined with a view of what it means for financial statement assumptions. Beyond that, investors want details on the impact of company actions on the environment, and on society.

A broad trust deficit

Investors depend on information from a range of sources, including companies and third parties, to make investment decisions. But they do so in an environment of diminished trust, our survey finds. When we asked investors about the degree to which they use—and trust—17 sources of information, the greatest variances were in narrative reporting and sustainability disclosures. Investors are triangulating one information source against another, likely because they don’t trust any single source entirely.

Awash in greenwashing

94% of investors believe that corporate reporting on sustainability performance contains at least some unsupported claims, an increase from last year. That may explain the support that investors expressed for new disclosure requirements, such as those from the European Union’s Corporate Sustainability Reporting Directive (CSRD) and International Sustainability Standards Board (ISSB), which could lead to more consistent, comparable reporting on sustainability. In line with our findings last year, the survey also highlighted that third-party assurance would increase confidence in sustainability reporting.

Our survey points to three areas where companies should act to address issues that matter most to investors. First, companies must convince investors that they are keeping up with the pace of accelerating technology. Next, they must find ways to prove to investors that they can continue to create value and meet their sustainability commitments. Finally, to meet investor demands for better information, companies must recommit to building trust in what matters.

1. Prioritising future technologies and business reinvention

Recent developments in AI and other emerging technologies have excited companies with the possibility of everything from improved productivity to new sources of top line growth and new business models. Investors are interested in this, too, ranking technological change (59%) as the factor most likely to influence how companies create and capture value in the coming three years. Further, investors ranked innovation and emerging technologies (including AI, the metaverse and blockchain) among their top five priorities when evaluating companies.

AI is of paramount interest. Accelerated adoption of AI is seen as critical to the value equation, with 61% of investors saying faster adoption is very or extremely important. When responses indicating ‘moderately important’ are included, the proportion jumps to 85%.

Nonetheless, investors are no stranger to the challenges, noting that AI could spur data security and privacy threats, misinformation, and risks related to insufficient governance processes and controls.

Ideas in action:
Using deeper insights to manage risk 

Seventy-seven percent of investors said that reporting on the use and deployment of new and emerging technologies was important or very important to their investment analysis—a finding that has implications for companies’ internal decision-making. As one analyst noted, ‘You have a brand new technology [coming and], at the same time that capital discipline matters. [The key issue is,] Who can deploy capital and leverage this new technology—and avoid throwing money down the drain?’

Investors are looking for more granular information from companies on how they deploy and use new and emerging technologies. Consider two examples: cybersecurity and data privacy, and emerging technologies more broadly. In both cases, about half of the investors we surveyed said that they possessed limited information, moderate information or no information at all. This was true of both quantitative and qualitative information that companies might disclose—examples of which might include the types of technologies employed, their intended use and effectiveness, and how they are governed.

Providing these kinds of insights will present a challenge for companies, particularly when it comes to AI, a field in which use cases are emerging and the appropriate policies or controls may not yet exist. For example, consider the use of generative AI for cyber defence, an approach that PwC research found seven in ten senior executives said they will adopt over the next year. To do so, CIOs will need to build new skills across their security teams to best use the technology, even as CFOs are tailoring (or still creating) the governance structures to ensure the technology isn’t leading to unexpected risk.

For additional insights on technology adoption and risk see “Artificial intelligence everywhere.”

2. Embedding sustainability to drive value

Sustainability is clearly on the minds of investors, and they are pressing to understand how companies incorporate sustainability considerations into strategic decision-making, risk management, and their financial statements. Investors want to know how a company’s sustainability plans square with its business model and, ultimately, its prospects for creating long-term value.

The survey responses reflect these broader concerns. For example, investors largely agree that ESG should be directly embedded into company strategy, and that companies should make expenditures that address ESG issues relevant to their business—even in cases where doing so would reduce short-term profitability. How a company manages its sustainability-related risks and opportunities is vital to investor decision-making. ‘We want to understand what those [sustainability] commitments actually mean for how [a company is] deploying capital or positioning the business,’ said one investor.

Notably, however, the strength of positive investor views about the integration of ESG appears to have diminished since our survey in 2021, particularly—as the chart below shows—among those who agree and strongly agree about ESG’s importance to strategy and investment decision-making.

Yet at the same time, the proportion of investors who strongly disagree about ESG’s importance in these same areas has declined as well. Do these findings reflect more—or less—of a backlash against the term ESG? Although our survey can’t provide a definitive answer, the findings can perhaps serve as a reminder that it’s easy to lose the connection to strategy when viewing ESG as an agenda of siloed topics, instead of as a way of better understanding market forces, and the potential to create value. PwC US research shows that even some boards of directors have difficulty making the link.

Regardless of what happens to the term ESG, respondents in our survey were clear about the underlying goal. In the words of one interviewee we spoke with: ‘We expect companies to prioritise and to take action on everything that’s material to their business.’ Where might this fall short? In our experience, companies may become exposed in part because they have been slow to manage sustainability risks, or they haven’t considered stakeholders’ desires for action and accountability on key sustainability issues.

Ideas in action:
Getting information that matters

In addition to better insights on how companies approach technology, investors also want a better read on companies’ sustainability plans. To be meaningful, reporting needs to be transparent, reflect the management challenges that companies face and clearly outline the road map to meet companies’ sustainability commitments. The mapping should include any milestones and progress towards, for example, net-zero targets or commitments to become nature-positive.

As one investor told us, ‘We want clarity that goes beyond [today’s] net-zero commitment, [and for companies to provide] visibility into what it means over [the next] three, eight, or 12 years.’

As we’ve described, investors are eager to have more robust and reliable data to understand how the management of risks and opportunities affect the assumptions that underpin financial statements. Executives will need to integrate sustainability into broader business strategy and operational decisions (see chart below)—yet today they’re often separated.

Beyond their interest in reporting on how sustainability affects financial performance (outside-in reporting), 75% of investors wanted to know about the impact a company has on the environment or society (inside-out reporting). That’s a big increase from 60% in 2022. Among those investors who said this latter form of impact matters, 75% agree that companies should disclose the monetary value of their impact on the environment or society—up from 66% in 2022. And 81% of investors said that knowing the monetary value of the company’s environmental and societal impact would help companies better integrate potential trade-offs between environmental and social issues in their decision-making. That said, evaluating monetary impact is complex, and will require more management attention. 

Still, there’s an upside for companies that get it right. Among respondents, 69% of investors said they would increase their level of investment in companies that successfully manage sustainability issues relevant to the business’s performance and prospects. Nearly as many (67%) said they would increase their investment in companies that change their business conduct to have a beneficial impact on society or the environment. All of this is in line with what investors are hearing from their clients: nine in ten investors said that client demand was a moderate, large or very large factor driving investor interest in ESG and sustainability investing.

For more on how companies are moving forward, see How CFOs further value creation by leading on sustainability.

3. Addressing the reporting trust deficit

Our survey highlighted a strong undercurrent of doubt among investors as they assess the reliability of the information they use. They are clear about areas where they want more and better reporting across both technology and sustainability. We have also noted that they lack trust in the sources of information they are using.

Against this backdrop, companies will need to think hard about what matters most to their investors and other stakeholders. With better information in hand, companies will be better able to communicate a more complete, interconnected and coherent narrative to investors. Investors still place their greatest trust in financial statements and note disclosures. By contrast, sustainability disclosures were among the least trusted information sources published by companies.


of investors surveyed believe corporate reporting contains at least some level of unsupported sustainability claims (i.e., greenwashing)

Nearly all investors believe that corporate reporting on sustainability performance contains at least some level of unsupported claims, often referred to as greenwashing. And although investors viewed both sustainability disclosures and narrative reporting sceptically, they expressed confidence in assurance when it came to assessing the accuracy of the sustainability information reported by companies. Today, much of sustainability reporting is not subject to assurance.

Ideas in action:
Building confidence is a journey

These perceptions of greenwashing may explain why investors are looking to regulators and standard setters to create clarity and consistency in companies’ reporting. Indeed, 57% of investors said that if companies meet upcoming regulations and standards (including the CSRD, the SEC-proposed climate disclosure rule in the US, and ISSB standards), it will meet their information needs for decision-making to a large or very large extent.

The new regulations will require significant attention from senior management. The challenge for companies will be gathering data for sustainability-related metrics that are material to their business. That means identifying or building new reporting systems that ensure that data quality meets the same standards as financial reporting. Although the first set of corporate reports under these new standards are yet to be published, the timelines are real. Companies are already taking action, and grappling with the challenges of preparing to report new information.

Better engagement is the starting place to build confidence with investors. Among this year’s respondents, 85% said they engage with companies regularly or when issues of interest or concern arise. How do investors respond when companies fail to demonstrate they are taking sufficient action on sustainability or ESG-related issues? Here, investors favour direct engagement, and seek to enter into a dialogue with the company (58% said they do this with some frequency). Just over half of investors said they have turned to incentives such as incorporating progress on meeting ESG targets into executive pay, and 50% said they have submitted shareholder resolutions on ESG. Finally, 42% of investors said they have divested their stakes in companies that haven’t demonstrated sufficient action.

As investors—and executives—address issues around trust, independent assessment of reported information will be valuable. Among respondents, 85% say that reasonable assurance (the level of assurance obtained in an audit of financial statements) would give them confidence in sustainability reporting—to a moderate, large or very large extent. ‘We’re keen to get to the point where this kind of information is routinely available, if not required by regulation, then assured by either the auditor or another provider,’ said one interviewee.

Survey respondents said that confidence in assurance practitioners is tied to specific attributes and characteristics. They want assurance practitioners to have access to experts with specific subject matter knowledge (80%), have a complete and interconnected view of business across all types of corporate reporting (79%), have experience in auditing complex organisations (77%), and have expertise in applying professional scepticism in assessing management’s forward-looking estimates and judgments (76%).

For more on trust and value, see The CSRD is resetting the value-creation agenda and Sustainable Value Governance.

Sustainability and AI are key areas where investors are pushing for progress—and for higher quality information. Better reporting is a necessary first step, but ultimately the information must serve a strategic purpose, too. For CEOs and their leadership teams, the key is to use these insights to spot opportunities and threats, take their business models to the next level, and sharpen their competitive edge, sustainably.

Note on methodology

In September 2023, we surveyed 345 investors and analysts across 30 countries and territories, and conducted in-depth interviews with 15 investment professionals. Respondents were predominantly institutional investors, comprising portfolio managers (19%), analysts (18%) and chief investment officers (17%), with 48% having more than ten years of experience in the industry. Their investments covered a range of asset classes, investing approaches and time horizons, and the assets under management (AUM) at their organisations range from <US$500 million to US$1 trillion or more; 65% of respondents are at organisations with total AUM of more than US$1 billion.

The authors thank Eleanor Larner, Gary Rapsey, Kirsten Turner, Elliot Whittingham and Gale Wilkinson for their contributions to this report. They also thank the survey respondents and interviewees for taking the time to share their views.

Further reading

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Nadja Picard

Nadja Picard

Global Sustainability Reporting Leader, Partner, PwC Germany

Tel: +49 (0)211 9812978

Wes Bricker

Wes Bricker

Global Assurance Leader, PwC United States

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