Almost All CEOs Are Preparing For A Recession, More Than Half Are Considering Layoffs

Over 90% of CEOs at large American companies believe that a recession will occur within the next 12 months, with a majority planning to rework investments with social goals or lay off employees to compensate, according to a Wednesday report by accounting firm KPMG.

While just 34% of CEOs believe that a recession would be “mild and short,” 80% believe that a recession would significantly harm their business’ growth over the next three years, according to KPMG’s survey of 1,325 CEOs at companies with more than $500 million in annual revenue, conducted from July 12 to Aug. 24. In response to mounting pressure from high inflation and declining GDP, 59% of CEOs said that they were reconsidering or pausing their environmental, social and corporate governance (ESG) goals, while 51% said they were considering layoffs.

Supporters of ESG investing, such as major investment firm Blackrock, believe that by tailoring their investment strategy to include considerations for social and environmental impact, companies are able to build more diverse portfolios that will perform better than traditional investment strategies. Detractors include 18 Republican state attorneys general, who allege that the strategy is not always in the financial interest of clients, and have claimed that managing retirement portfolios and pension funds using ESG strategies may violate state laws requiring investors to operate in the “sole financial interest” of their clients.
Black Bear by Marc-Olivier Jodoin is licensed under Unsplash