Balancing long-term positivity with near-term reality

Voice of the CFO | November 2021

KPMG hosted a cross-industry group of chief financial officers (CFOs) to discuss their most critical issues heading into 2022: the continued impact from the pandemic and new reporting requirements related to environment, social, and governance (ESG) matters. Carl Carande, U.S. Vice Chair and Global Head of Advisory, led the discussion; Constance Hunter, Chief Economist, and Rob Fisher, U.S. National IMPACT Leader, provided subject matter insights.

As 2021 closes out, U.S. CFOs are taking the good with the bad—or with the “getting better.” The impacts of COVID-19 linger, although vaccination and survival rates have improved. Container ships float offshore, and consumer excitement for the holidays is tempered by concerns over rising prices, slower deliveries, and empty shelves. Constant news about climate events and social unrest spurs both fears and activism to effect positive change.

The participants in our most recent KPMG CFO Exchange agreed that, while navigating the current state has been difficult, much of this too shall (mostly) pass.

Key takeaways

CFOs brought similar key issues to the discussion, regardless of industry: the inflationary environment, supply-chain disruption, and labor shortages largely related to COVID-19, as well as increasing demands for ESG reporting.

The friction in the labor market and supply chain will largely work itself out over time. Until then, goods and services inflation remains a factor, and labor shortages are tipping the balance of power toward employees.
CFO exchange participants anticipate a challenging operating environment into next year before dynamics normalize. However, supply chains have likely changed forever, and CFOs said they are taking a longer view of adapting to a new reality and making more permanent changes to their strategies.
Finance is assuming greater responsibility for ESG reporting as stakeholder demands intensify, quality expectations increase, and reporting standards solidify, several CFO participants said. They added that they recognize the importance of well-executed ESG strategies and transparency to corporate brands and reputations.

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