72% of Business Leaders Are Disappointed with Their Companies’ Pace Regarding Global Megatrends, AON Survey Reveals

Aon plc (NYSE: AON), a leading global professional services firm, revealed the findings of its first Business Decision Maker Survey, showing that 72% of business leaders feel their companies are not moving quickly enough to address risks associated with global megatrends in Trade, Technology, Weather, and Workforce. This survey, conducted among C-suite and business executives in North America, the U.K., and Europe, highlighted the increasing complexity and volatility in making decisions amid these challenges.

The survey identified that the majority of respondents view all four megatrends as crucial to their organizations. However, Trade, Technology, and Workforce were seen as higher priorities, with over 80% rating them as “extremely important,” compared to 70% for weather.

Aon CEO Greg Case noted that these findings align with client feedback about the heightened volatility and complexity in the global economy. He emphasized the need for actionable insights and innovative tools to address critical risks and people issues linked to these megatrends.

Aon’s inaugural Business Decision Maker Survey, conducted online from April 24 to May 5, 2024, included responses from 812 business leaders, including C-suite executives and senior executives from companies with over 500 employees across the United States, Canada, United Kingdom, Germany, France, Italy, and Spain. Here are some of the key findings from the survey:

Trade: Business leaders expressed significant concern about trade risks, both physical and financial. 74% reported an increased responsibility for supply chain or distribution functions over the past year. Exchange rate fluctuations and commodity price risk were also among the top trade concerns.

Technology: Advancements in A.I. and data analytics offer competitive advantages but also introduce new risks. 63% of business leaders reported evaluating the ROI of cybersecurity initiatives, and 61% audited I.T. suppliers to manage third-party risks in the past year.

Weather: Climate change and extreme weather events are increasingly impacting business risks. 66% of respondents acknowledged the need for a significant shift in how businesses approach future climate-related challenges. However, action on weather risk is slower compared to other megatrends, with 59% quantifying the financial impact of extreme weather events, compared to 72% for cyber risks.

Workforce: Rising workforce costs are a significant challenge, with 57% of businesses altering benefits or healthcare offerings to improve affordability. Additionally, 52% have focused on reskilling workers for green technology and renewable projects, and 45% believe addressing climate issues helps create a mission-driven culture that attracts and retains talent.

The survey also revealed regional differences in risk preparedness between U.S. and European/U.K. organizations. For instance, 48% of U.S. leaders identified supply chain disruption as a top trade risk, compared to 27% in Europe and the U.K. Conversely, 44% of European/U.K. leaders cited war and political instability as top trade risks, compared to 28% in the U.S.

Regarding weather risks, 47% of European/U.K. leaders prioritized decarbonization and clean energy, compared to 33% in the U.S. However, U.S. leaders paid more attention to workforce safety related to heatwaves (45%) and property damage from natural disasters (37%) compared to their European/U.K. counterparts.

Building on insights from Aon’s 2024 Client Trends Report, the survey found that interconnected risks across megatrends put additional pressure on business leaders to manage challenges such as A.I. and climate risk. Macroeconomic and financial conditions further complicate these efforts, with 77% concerned about interest rate fluctuations and 73% about asset price volatility.

Confident leaders also benefit from effectively sizing and pricing risk exposures. 59% of confident leaders have quantified the profit-and-loss of scenarios related to supply chain, cyber risk, and weather events, compared to 36% of less confident leaders.

Aon President Eric Andersen emphasized the necessity of a comprehensive, data-driven approach to risk management to effectively navigate these challenges and seize opportunities. The survey revealed that confident business leaders rely on data and analytics to manage risks, with 60% of confident leaders having the necessary data, compared to 41% of less confident leaders. Modeling climate and weather risks remains a concern, with only 39% feeling very confident in their data and insights.

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