The survey, which captures the views of 345 investors and analysts across 24 countries and territories, finds that investors see technological change as the most significant driver of change for the businesses they invest in (71%), ahead of government regulation (64%), changes in customer preference (61%), and supply chain instability (60%).
Notably, investors are also not seeing a trade-off between AI and workers. 74% of respondents urge the businesses they invest in or cover to invest in upskilling their workforce. 32% expect AI to lead to headcount increases of 5% or more - on par with the proportion who expect little to no change in headcount (31%).
Wes Bricker, Global Assurance Leader, PwC US, said:
"Investors expect to see real outcomes from GenAI over the next year and recognise that achieving this will take investment in people and upskilling, as well as technology. Management can expect scrutiny on how they deliver AI productivity gains and support for an approach that extends beyond the tech itself to reinvent the way businesses operate."
Investors are optimistic about global economic growth
The survey finds that investors are cautiously optimistic about the global economy - half (51%) expect the economy to grow over the next 12 months, with macroeconomic and inflationary concerns falling from their 2022 highs (respectively, from 62% to 34% in 2024, and 67% to 31%). At the same time, investors' greatest concerns are cyber risks (36%) and geopolitical conflict (36%), both of which are largely unchanged over the last two years but have slightly risen from 2023.
With these risks remaining top of mind for investors, almost nine in ten (86%) agree that the ability of a company to manage through a crisis is an important factor in their investment decision-making. 60% of investors believe it is also very or extremely important that companies re-think their business models in response to supply chain instability - and 68% say they should increase their investment to de-risk them.
Investors eye action on the impact of climate
Investors continue to prioritize action on the impact of climate. 30% expect that the companies they invest in will be highly or extremely exposed to threats from climate change within the next 12 months, up eight points from 2022, although down two points from 2023.
75% of survey respondents agreed that they would moderately or significantly increase their investment in companies that are taking a range of climate-related actions, with the greatest support for taking action to build sustainable supply chains by working with suppliers and communities (80%). When assessing companies' net-zero transition plans investors say governance (72%) and associated capital or operating expenditures (68%) are very or extremely important. Additionally, 71% say companies should incorporate ESG/sustainability directly into their corporate strategies - a similar level to 2023.
However, challenges remain - 44% of those surveyed agreed that to a large or very large extent, corporate reporting about a company's sustainability performance contains unsupported claims - marking little change over the past two years. Not surprisingly, 73% are demanding a level of detail in assurance reports on sustainability information that is comparable to that of financial audits.
Nadja Picard, Global Reporting Leader, PwC Germany, said:
"Investors continue to prioritise action on the impact of climate. They are increasingly interested in the governance and financial impact and commitment of companies' net-zero transition plans. Companies should embed sustainability in their strategies, particularly as investors continue to look at sustainability-related disclosures and communication to assess action."
Investors look beyond financial statements
Investors value a wide range of data beyond financial information, particularly around corporate governance (40%) and innovation (37%). Most investors also report relying on multiple sources of information, including investor-focused communications (61%) and direct dialogue with the company (57%). Indeed, significantly fewer investors (55%) than in 2023 (66%) report relying on financial statements and note disclosures to a large or very large extent. As investors look to qualitative data, AI may provide significant opportunities in analysing information published by companies - nearly two-thirds (62%) say it has significantly or moderately increased their ability to do so.
Kazi Islam, Global Assurance Strategy & Growth Leader, PwC US, said:
"Reliable information is the lifeblood of capital markets, yet today's pervasive flow of data can be a blessing and a curse. The expectation on business leaders is to communicate to investors what is material to their business, doubling down on transparency and consistency to ensure they are building trust through communication. As AI provides the capability needed to sift easier through these qualitative and quantitative data, ensuring consistent and effective communication from company leaders is imperative."
Pisit Thangtanagul, CEO of PwC Thailand, added:
"Thai investors expect the companies they have invested in to leverage AI to increase efficiency and generate revenue and profits, in line with global investors. Business leaders now realise they should use this technology to create new business opportunities, expand capabilities, and build stakeholder trust. Several Thai companies are now investing in AI alongside upskilling their employees, and this trend is likely to increase in the future. Furthermore, institutional and general investors are increasingly interested in sustainable investment, examining information through a company's sustainability report. Most listed companies in Thailand disclose this information through the One Report, but only a few large companies disclose ESG information and risk management processes through a separate sustainability report. Receiving an ESG assurance audit from a credible source is key to building credibility in a company's report disclosed to investors."
Source: PwC