Navigator 2020

Now, next and

how for business

Together we thrive
Contents Context
1. Overview 3

THIS SURVEY OF OVER

10,000
2. A two-speed recovery 6

3. Business investment 9

4. Future strategy 10

5. International trade 12
BUSINESSES SPANS

39
6. Reshaping supply chains 14 COUNTRIES,
7. Sustainability 16 MARKETS &
TERRITORIES
Survey methodology 18

COVID-19 has challenged all businesses,

but not equally so. Some faced falling North America: Europe: Middle East & Asia Pacific:
footfall as streets and airports emptied. Canada, Mexico, Belgium, France, North Africa: Australia,
Whereas others experienced surging USA Germany, Egypt, Bangladesh,
demand, notably technology and Greece, Saudi Arabia, mainland China,
e-commerce companies. South America: Ireland, Italy, Turkey, UAE Hong Kong,
Argentina, Brazil Netherlands, India, Indonesia,
Poland, Russia, Rest of Africa: Japan, Malaysia,
This report provides fresh analysis following
Spain, Sweden, South Africa New Zealand,
July’s Navigator Resilience survey, covering a
Switzerland, UK Philippines,
period of increasing business activity post- Singapore,
lockdowns, when government support to South Korea, Sri
many businesses and employees continued. Lanka, Taiwan,
Comparisons with July’s survey, which This survey was conducted between 11 Thailand,
covered a narrower range of markets, will September and 7 October 2020. Signs of a Vietnam
track businesses' response to the pandemic. second spike were emerging across Europe,
And year-on-year comparisons with the larger there was no agreement on a UK-EU post-
annual Navigator survey from November 2019 Brexit deal, and businesses were contacted
will show the impact of COVID-19. before the US election.

Navigator 2020 | 2
1. Overview

The Navigator survey shows the pandemic

%
Change is short-term for most businesses
Level of change experienced in the last 12 months
to be a unique crisis because of the
unequal impacts on different sectors Have undergone long-term changes
or transformed for ever
Have undergone
short-term changes
Have continued
as before

Agriculture /
Fishing / Forestry 18 42 40
This reflects the nature of COVID-19 are conscious of downside risks, with further
spreading through face-to-face contact, waves of COVID-19 posing the greatest threat
meaning that demand and supply to the business outlook. Mining / Oil /
shocks have varied widely between Power / Metal 20 43 37
different sectors, with economic impacts These differences may persist because of the
depending on the make-up of national strategies companies are able to adopt. For
economies. Almost all businesses most, the pandemic has caused an evolution Automotive 27 45 28
surveyed have been adversely affected, rather than revolution in operations. Around
with only 8% currently seeing current half of companies have made short-term
Wholesale /
profitability ahead of pre-pandemic changes, with others evenly split between Retail Trading 28 49 23
levels. And while the revenue outlook is longer-term and no change.
significantly more pessimistic than last
year, most businesses project revenue Companies facing growth challenges are Services 25 49 27
growth this year. undergoing the greatest scale of change.
Through choice or necessity, these
There are emerging signs of a two-speed challenged companies favour a defensive Construction 22 51 27
recovery. Businesses growing over 5% this cost-cutting approach. And in common
year are making a majority of sales online. with higher-growth firms, they’re seeking
And a narrower group comprising 15% of to resuscitate consumer demand through Manufacturing 23 51 25
companies enjoy revenue growth of over marketing. Higher-growth firms follow a
15%. These leading companies are followed broader approach however – investing for
by a large pack of slower-growth firms. future growth through innovation, product
Then, the proportion of companies expecting development and new markets. Innovation, responsible business practices outcomes. And most firms have adopted
declining sales has doubled since 2019. A few and corporate culture are more significant targets, generally focused on environmental
sectors face particular challenges, such as Business leaders define corporate success factors. Nine in ten firms (86%) anticipate and social factors, rather than corporate
automotive and tourism. And all businesses as extending far beyond shareholder returns. revenue growth from improved sustainability governance.

Navigator 2020 | 3
1. Overview (continued)

Higher-growth vs lower-growth sectors Emerging trends

Sectors expecting sales growth to exceed 5% over the next year 58
A Advertising & public relations
B Pharmaceutical manufacturing
57
1 Recovery
Most businesses expect to
return to pre-COVID profitability
54
C Oil & gas this year or next
D Metals and mining 54
E Infrastructure
F Chemicals manufacturing
G Media & publishing
52 2 Evolution not revolution
COVID-19 spurred short-term
change for most businesses
H Technology: IT
I Tourism 51
J Real estate
K Computer & electronic manufacturing
L Automotive services
A B
C
D 51 3 E-business
High-growth firms now make
a majority of sales online

E
M Automotive manufacturing

F
N Power & utilities

G
50

%
O Healthcare & social services

4 Sustainability pays

H
P Telecommunications services
Nine in ten companies expect

I
Q Telecommunications manufacturing
40 sustainability performance to

J
R Fintech
V

29 boost sales

K
S Other services
U

40
L
T

T Education M

5
32 S
U Wood, paper, rubber, plastic manufacturing R N
Regionalisation
39
Q P O
V Other manufacturing Mainland China surpassed the
34 USA as the main foreign market
39 for firms in Asia Pacific, a shift
The pandemic has had an 35
since 2019
38
unequal impact on different 35
38
36
sectors; demand and supply 38 38

shocks have varied widely

Navigator 2020 | 4
1. Overview (continued)

Most businesses expect to return to pre-COVID profitability this year or next

Year in which businesses expect to return to pre-COVID levels of profitability*

2022 30% 38% 20% 26% 35% 29%

2021
22% 27% 43% 43% 32% 29%

6% 7% 9% 10% 11% 12%

By the end of 2020

New Zealand Hong Kong Thailand Mexico Italy UK

7%
2022 25% 29% 26% 20% 23%

2021
41% 34% 35% 40% 35% 47%

15% 16% 17% 19%

By the end of 2020 22% 24%

Brazil Mainland China Russia USA Saudi Arabia Sri Lanka

* Selected responses Navigator 2020 | 5

2. A two-speed recovery

COVID-19 has
53
Most and least challenged sectors
% Current status of business
challenged almost
all businesses of businesses 50
Oil and Gas
have poorer
Infrastructure
growth
Signs of a two-speed recovery are 40

Thriving in the new normal %

expectations Metals / Mining
emerging: few sectors are benefitting Pharma
from increased demand, while many
than in the Power / Utilities
more face slow growth, and sectors such 2019 survey
30
as tourism and automotive grapple with
challenges. Online sales are a feature of globally (24%) expect declining revenues over
outperformance. the next year. A resurgence in COVID-19 cases 15 sectors 24-26%
is the primary threat to growth and recovery. 20
The pandemic has dampened business Advertising
optimism. A majority (53%) have poorer The profile of profitability reveals a lengthy Arts
Media / Films
growth expectations than in the 2019 recovery for many sectors. Half of firms Tourism
10 Manufacturing
survey and profits are above pre-pandemic globally expect to return to pre-COVID levels Glass
levels in only 8% of firms. Expectations of of profits this year or 2021 (53%). On the
future revenue growth have dropped by 15 other hand, for nine in 20 firms, pre-pandemic
0
percentage points since 2019, with two- profitability is not expected to return until
thirds of businesses (64%) projecting revenue 2022 or later. This is consistent with HSBC's 0 10 20 30 40 50
growth next year. And a quarter of companies economic forecasts which do not project a
sharp ‘V-shaped' recovery, at least in terms of Surviving day to day %
levels of activity.
Key HSBC GDP forecasts*
2020f 2021f 2022f A narrower set of leading companies is “We have been working with a certain mix of
World -4.1% 4.7% 3.1% emerging, with 15% of firms projecting
Developed -5.6% 4.0% 2.3% growth of over 15% this year (a third lower service offerings for a long time. This was one of
Emerging -2.0% 5.6% 4.1% than in 2019). As the pandemic reduced social those journeys where we challenged that. We had
contact, having an online presence enhanced
US -4.1% 3.1% 2.5%
business performance. Online businesses are
a certain way of doing business for many years.
Mainland China 2.4% 7.5% 5.6%
more optimistic about future prospects, and This was the first year we challenged it…”
Eurozone -7.6% 5.7% 2.5% this trend extends across the technology, IT Technosoft Corp, India

*Source: HSBC Economics, Bloomberg Navigator 2020 | 6

2. A two-speed recovery (continued)

Expected sales growth How business outlook has changed

%
and telecommunication sectors. Businesses in
sectors such as advertising and PR, food and over the next year over the past 12 months*
pharmaceuticals also reported an increase in
demand thanks to the COVID-19 pandemic. 2019 2020 More pessimistic More optimistic or
expect to stay the same
At the other end of the spectrum, the
proportion of no-growth companies has 15%+ growth 22 15 20 2019 80
doubled in a year. And while a majority of Asia Pacific
firms expect to grow between 2 and 15%, this 32 2020 68
grouping has reduced by seven percentage
points since 2019, reflecting growing
pessimism. 20 2019 79
Europe
A quarter (24%) identify as thriving, against
2-15% growth 57 50
36 2020 62
a fifth (19%) that identify as surviving. Fewer
than one in five businesses in tourism (15%)
and automotive (17%) expect to return to pre- 12 2019 88
pandemic profitability this year. Components North
America
manufacturers are particularly vulnerable, 26 2020 73
relying on upstream demand.
Sales flat 8 11
Within Asia, open economies such as Hong 13 2019 86
South
Kong, Singapore and South Korea reportedly
America
face greater challenges, whereas strong 18 2020 80
optimism permeates emerging markets such Sales declining 12 24
as Bangladesh, Vietnam and India. Businesses
in the Americas and the Middle East are Middle East & 15 2019 85
most optimistic with European firms most North Africa
%
pessimistic about growth. 22 2020 77

“I think the hardest thing is that I probably had to focus on the

latest Quarter more than I felt I should, when I really wanted 18 2019 82
Rest of Africa
to look after 2020, 2021 and 2022.” 32 2020 67
Nielsen, Market Information Provider, UK

*Excludes businesses answering 'Don't know' Navigator 2020 | 7

2. A two-speed recovery (continued)

Asia: divergent outlooks E-commerce has driven growth Winning

Expectations of sales growth in the next year However, there is wide variability of sales
Proportion of business sales coming from online
strategies
have declined in Asia Pacific, going from just expectations within the region – featuring the
under four out of five (77%) in 2019 to three most positive (Indonesia) growth – as well as 51
out of five (60%) businesses in 2020 expecting the most negative (Japan) markets across all
sales growth. 39 markets surveyed.
The 2003 SARS
epidemic catalysed
34 mainland China’s
Proportion of Indonesia Mainland China South Korea Japan development as
businesses that 28 the world’s leading
expect growth e-commerce market,
of overall sales
99% now larger than the
in the next year 86% next ten markets
64% 57% combined.1

2019 This pandemic is

accelerating that trend
globally, as digitally
enabled businesses
serve customers online.
91% High-growth Low-growth No-growth
High-growth firms now
>5%
62% make a majority of
46% 35% sales online.2

2020 The proportion of

“The movement to online has consumers that are
digital natives will
been dramatic… every retailer, double this decade,
every market with online creating compelling
opportunities.3
commerce has gone up.”
NielsenIQ, a consumer intelligence
business based in Singapore

1 McKinsey: China digital consumer trends 2019 2 51% high-growth firms (annual revenue growth >5%) are >50% online.
Navigator 2020 | 8
3 HSBC Global Research, The booming digital economy, September 2020
3. Business investment

Companies are investing for growth The outperformance of digitally enabled

businesses may intensify if this investment
More than a third of businesses are increasing
investment in technologies that promote
gap continues. skills development and transfer (36%),
agile management (35%) and employee
Long-term investment priorities include communications (33%). Only one in ten
Despite an uncertain external process innovation (46%), supply chain businesses plan to decrease investment in
environment, heightened by COVID-19, transformation (44%) and sustainability (45%). these technologies.
two-thirds (67%) are increasing Notably, the oil and gas sector places greater
investment in their business. And one emphasis on sustainability, with around Consistent with wider findings, there is little
in three (34%) will significantly increase half increasing investment. And product sign of firms foregoing investment to boost
investment by more than 10% in the innovation was highest amongst the innovative short-term shareholder returns. Rather
next year. electronics (54%) and IT sectors (50%). the prioritisation of post-COVID recovery,
digitisation, and sustainability are clear; firms
Higher-growth businesses may steal a march A drive to enable collaboration, identified in are prepared to invest now to deliver value in

67
with significant anticipated investment the Navigator Resilience report, continues. the long-term.

%
to spur growth. Nine in ten fast growth
companies, those which anticipate revenues
to rise by over 5% this year, are increasing
investment. Yet even for businesses which
expect declining sales in the next year, two Most high-growth companies plan to increase investment
in five (38%) plan to increase overall financial Businesses intending to increase overall investment in the next year
investment.
of businesses
Investment is geared towards boosting
demand and enhancing customer experience. globally intend to
increase financial
89% 61% 38%
Immediate priorities include marketing (47%)
and sales channels (45%).
investment
Investment decisions appear broadly
consistent across sector and company size.
Yet digitally enabled companies selling
online are investing more, with three-
quarters of these firms increasing investment
High-growth Low-growth No-growth
(76%), against 61% of offline business.

Navigator 2020 | 9
4. Future strategy

Despite the challenge of COVID-19, High-growth firms are investing,

low-growth firms are cutting costs
the scale of change businesses are Strategies companies are using to benefit from

undertaking appears modest growth drivers and address threats

1% NA / prefer Growth Low-growth No-growth businesses

not to answer businesses businesses

3% 49%
Most companies have not fundamentally
changed strategy. Yet approaches differ
between growth companies investing Have Have undergone
for the future, and challenged business transformed short-term changes Cutting costs

31% 36% 56%

models focusing on resuscitating for ever
consumer demand.

Three distinct groups emerge. The largest,

comprising around half of businesses, have
undergone short-term change but expect to Level of
return to previous operations. The remaining Improving
change in
half of businesses split almost equally. A
quarter (26%) expect to continue as before, the past
the quality of
products or 37% 32% 31%
with a quarter (21%) experiencing long- 12 months services
term change. Only 3% have transformed
permanently.

Growth expectations are highest among the Expanding

37% 31% 31%

first two groups. Therefore, greater change into new
appears to have been forced on vulnerable
companies by the pandemic. Future 21 %
26 % markets

uncertainty is the most important factor in Have Have continued

undergone as before
driving change.
long-term
changes
Investing in
customer
experience 30% 26% 24%

Navigator 2020 | 10
 Human-centric leadership 36
Agility/capacity for change 47
Technical innovation 49

4. Future strategy (continued)

Diversified workforce at all levels 36
Open-mindedness/inclusivity 39
Speed to market 40
Invests in people/puts people before process 37
Great place to work 36
Collaborative (rather than competitive) 39
Preparedness to take risks 38
Recognises value of failure 31
Revenue growth informs strategy. Companies Drivers of entrepreneurialMeritocratic 27

projecting declining sales are adopting a

success in the future 49 Winning
defensive approach, with more than half
(56%) cutting costs. This compares with A Technical innovation 47 strategies
fewer than a third of high-growth businesses
B Agility/capacity for change
(31%). Defensive measures seek to revive
consumer demand through marketing and C Speed to market
sales channels. And while all firms are turning
to marketing to boost demand, the differences
D Open-mindedness/inclusivity
40 July’s Navigator
E Collaborative (rather than competitive)
emerge among higher-growth firms that are Resilience report
taking a broader approach to target future F Preparedness to take risks showed that companies
were pulling through
growth. G Invests in people / puts people before process A B 39 the crisis by pulling
H Human-centric leadership together. Despite

C
Higher-growth businesses are more likely to
%
physical distance,

D
invest in improved product or service quality, I Diversified workforce at all levels
four in five businesses
27

E
customer experience, and expansion into new J Great place to work 39 felt closer to their

F
markets. The effect may therefore be long- G
customers, employees
K Recognises value of failure
J H
I
lasting as companies emerging strongest and suppliers.
from the pandemic invest for long-term L Meritocratic 31
growth. 38 Collaboration looks
set to continue. Two
in five businesses
There are signs of an evolution in thinking 36 37 (39%) believe
among business leaders. Responsibility,
resilience and reputation are viewed as 36 36 collaboration, rather
than competition, will
more important to long-term success characterise successful
than returns to shareholders. Only 17% of entrepreneurial
firms view shareholder returns as defining businesses.
future success. Innovation is the defining Collaboration is rated
characteristic identified by almost half of “The one thing that has become evident is that above shareholder
businesses (49%). This broader conception
digital transformation is not a choice. It is not returns as defining
future success.
of the drivers of corporate performance
appears consistent with rising expectations something that you should leave to the junior
for companies to act in accordance with engineer with a bit of a budget to play with.”
consumer values. Hitachi Solutions, Germany

Navigator 2020 | 11
5. International trade

COVID-19 hit global trade volumes Looking to the future: expansion markets
Europe is the most attractive region looking ahead 3-5 years (36%).
less severely than feared given the USA is the single most attractive market (13%), followed by Canada,

depth of recessions around the world

Germany (both 10%) and mainland China / France (both 9%).

Markets & territories

Regions
The World Trade Organization forecasts
a fall in goods trade by 9% in 2020,
rebounding by 7% in 2021.4 This relative
resilience is evident in businesses
remaining confident about future
growth, while expecting international
trade to become harder.

Two-thirds (63%) of businesses believe trade

has become more difficult as a result of events
29% 28%
Mainland China USA
over the last year, but their commitment to
pursuing international opportunities appears
undiminished. Seven in ten firms (72%)
expect their international trade prospects to
Mainland China
be positive over the next few years, down is now the largest
from 81% in 2019. Only one-fifth (22%) hold a
negative outlook. trading partner
Positive Negative for Asia Pacific 10% 9%
81 2019 14 companies,
72 2020 22 overtaking the USA Canada 13%
10 %
9 %
36% Mainland
China

USA Europe
Germany France

4 WTO: Trade shows signs of rebound from COVID-19, recovery still uncertain, October 2020 Navigator 2020 | 12
5. International trade (continued)

%
The global trade map is not being radically China surpassing the USA as the main foreign Trade outlook remains positive
redrawn by COVID-19 or protectionism. Most market for regional firms. Percentage of companies with a positive view Winning
companies do not plan to withdraw from an
international market within the next two years. Around two-thirds of companies (64%) believe
of trade prospects over the next 1-2 years
strategies
Rather, they are looking within their region for protectionism is growing, broadly consistent
expansion. with recent years. Almost all companies 89
87 88
fear negative consequences, including firms
The growth in regional trade is strongest in that operate only domestically. And these 81
South America, where more than three in five concerns run deeper than difficulties sourcing 78 79 Businesses fear
77
(63%) are currently trading with Central/South raw materials, supplier partnerships, or negative impacts from
America, up six percentage points on 2019. reaching customers overseas. 72 71 growing protectionism.
This pattern is replicated in Asia Pacific, with 67 This perception is
regional trade up by four percentage points Trade fosters innovation and the exchange of strongest among
in a year, amid a marked shift with mainland ideas. Two in five firms see broader horizons US and Mexican
and new sources of insight (37%) as a benefit, companies, rising
Percentage of businesses that think helping them enhance products and services around 10 percentage
protectionism is on the increase (35%), which ultimately benefits consumer points over four years.
choice (34%). Businesses believe international This may reflect the
61 63 65 64 trade promotes positive social outcomes domestic political
through boosting local economies (30%) environment and the
and supporting the development of local desire to end trade
infrastructure (24%). reliance of critical
2017 2018 2019 2020 goods on single foreign
suppliers in the wake of
COVID-19.
“If you want to grow [internationally] you have to bring new
ideas and new products and new innovation… We now In response, companies
are seeking to boost
have a joint venture with a Chinese customer in robotics and competitiveness (35%),
digitalisation… this company has been able to grow very partner with local firms

2020

2020

2020

2020

2020
2019

2019

2019

2019

2019
(32%), and utilise online
fast… to be highly price competitive… to take back some e-commerce platforms
market share.” Global Asia
Pacific
Europe North
America
South
America
(29%).
Danieli Group, steel production, an Italian company operating in mainland China

Navigator 2020 | 13
6. Reshaping supply chains

With supply chain disruption becoming

more commonplace, businesses are
Factors threatening supply chain resilience
%
reviewing and reshaping their supply
Suppliers in countries / territories which are
unstable or at risk of tariffs / sanctions 40
chains to build resilience
Increasing cost 39

Research suggests supply chains will Suppliers are too distant from target
face disruptions lasting a month or customers or from our business 33
longer every four years.5

Firms view these disruptions as the biggest Suppliers which are not sufficiently agile 23
internal factor hindering growth (19%). More
than nine in ten (93%) have concerns relating
Financial resources / time spent on
to their supply chain. These concerns are
managing the supply chain 23
consistent across industries. In response,

93
businesses are making changes to how they

%
select suppliers and manage their supply chain. Deteriorating / variable quality of suppliers 23
In terms of suppliers, July’s Navigator
Resilience showed more businesses were Lack of transparency on
supplier (and their suppliers) 20
diversifying rather than restricting suppliers.
This trend continues with more firms
diversifying (28%) than reducing (20%). This
gap widens for higher-growth businesses
have concerns Suppliers not meeting our
sustainability requirements 20
and companies that perceive protectionism
rising. Automotive and manufacturing firms,
relating to their
Suppliers not matching our
particularly in the computer and electronics supply chain digitisation requirements 19
sector, are diversifying most through adding
new suppliers.
No concerns 7

5 McKinsey Global Institute: Risk, resilience, and rebalancing in global value chains, August 2020 Navigator 2020 | 14
6. Reshaping supply chains (continued)

Diversifying vs reducing the number of suppliers: the regional picture

Winning
34% 33% 32% strategies
24% 21%

Diversified COVID-19 highlighted

the risks of
concentrated and
Reduced
opaque supply chains.

Mapping supply
19% 17% 20%
25% 22% chains right down
to component level
can ensure no single
Asia Pacific South Middle East & North Europe point of failure. Supply
America North Africa America chains can maintain
efficiency while
adding geographic
diversification that can
This diversification is a strategy to deal with the immediate priority (48%). Companies based on sustainability practices (24%) and be flexibly deployed.
external uncertainty, enhancing control and that identify as thriving are making greater increased transparency deep into the next tier Transparency,
reducing risk. And consistent with increasing changes to their supply chain, particularly in of suppliers' supply chain (26%). digitisation, resilience
trade flows within regions (Section 5), for two- digital adoption. and incorporating
fifths of firms, focusing on suppliers in their Businesses are prioritising resilience across ESG factors will set
home region will be their immediate priority for Supply chains shape sustainability outcomes. their supply chain. To achieve this firms companies apart.
2021 (40%). The most significant short-term Large corporates place considerably are enhancing control, reducing cost and
change is choosing suppliers based on their greater emphasis on this. One in five firms increasing speed. And as volatility
country’s control of COVID-19 (32%). hold concerns around suppliers' lack of increases, trade finance
transparency and ability to meet sustainability can bridge spikes in
On supply chain management, half of requirements. Over the past year, around the need for working
businesses see digital and technology as a quarter of firms have selected suppliers capital.

Navigator 2020 | 15
7. Sustainability

Companies anticipate direct commercial

benefits from embracing sustainability 41%
Up to 5% growth

Environmental, Social and Governance More firms have 28%

(ESG) targets are increasing. And targets than last year 6-9% growth
external pressures to do so are broad
based, but firms feel it most from
consumers, government, and supply
Environmental
17%
chain partners. Over 10% growth

The vast majority of companies expect

sustainability performance to boost sales 2019 68% 78% 2020 +10%
(86%). While a plurality of businesses (41%)
expect increased growth of up to 5% over
the next year, for a sizeable minority the
opportunity is far greater. More than a quarter
(28%) expect sustainability to boost growth Social

86
by between 5% and 10%; and one in six (17%)

%
expect increased growth in excess of 10%.

Larger companies expect the greatest

increases, as do companies in South America,
2019 65% 77% 2020 +12%
the Middle East and North Africa. Firms in
these regions also anticipate sustainability
will help attract investment. In terms of
sectors, natural resource-intensive industries of companies expect their sales
such as agriculture and mining companies Governance
see the highest growth benefits. Whereas to grow over the next year, from
the automotive sector has the lowest
expectations. 2019 48% 46% 2020 -2%
a greater focus on sustainability

Navigator 2020 | 16
7. Sustainability (continued)

Priorities for environmental targets

Energy usage (82%) External pressures are growing. Consumers Target timings and focus*
Winning
Recycling of materials; (80%)
Diversity in all levels; (80%) are the strongest driver for automotive and
construction firms to enhance sustainability,
Executive salaries/compensation (80%)
Energy usage Impacts on local communities/local community investment 79
whereasfootprint
Product/service environmental impact/carbon government
(all 79%) action influences 4% strategies
Recycling of materials natural
Net zero emissions in own operations and 76
resource-intensive businesses in the
across supply chain (all 76%)
Have set a target by 2050
Water use; 75 agricultural, oil and mining sectors. But while
82
Diversity in all levels governments
Net zero emissions in own operations; 75
Diversity at board level (all 75%)
are also looking
may exert pressure, companies
72 to the state for support.
14%
80 Adopting UN Sustainable Development Goals Framework;
Have set a target by 2030
Executive salariesEmployee
/ compensation
travel/ air miles; 72
Around two in five firms (37%) report that Companies that
80 Gender pay gap (all 72%)
government incentives would support their identify as thriving
80 Impacts on local
communities
sustainability efforts.
27% see the greatest
opportunities from
Have set a target by 2025
Three in four companies have set improving sustainability
79 sustainability targets. One-third favour annual performance. A
Carbon footprint targets (35%), 27% are setting a target for majority of businesses
79 2025, and 12% for 2030.6 There is a marked recognise it will create
increase in the use of targets relating to short-term commercial

% 30%
Net zero emissions environmental and social outcomes since opportunities, boosting
76 in own operations
2019, but targets for governance issues are Have annual targets in place growth.
across supply chain
unchanged and far less prevalent.
Today’s lower
75
Water use Companies expect the benefits of improved borrowing costs create

75
sustainability performance to extend beyond
the bottom line. Expected benefits include
17% an opportunity for ESG
investments which will
Net zero emissions in No plans
employee wellbeing (37%) and recruiting pay off tomorrow. And
75 own operations
talent (28%), with attracting investment sustainable financing

72
72
Diversity at board level
(30%) another sign of the financial benefits
that accrue alongside enhancing corporate
7% solutions, cited by 30%
of firms as an enabler,
72 Does not apply
reputation (32%). can help unlock these
Adopting UN Sustainable opportunities.
Development Goals Framework
“Consumers are digging deeper and spending more time
Employee travel / air miles analysing whether a product’s claims are actually truthful,
Gender pay gap
and if not they are harder on brands than in the past.”
NielsenIQ, a consumer intelligence business based in Singapore

6 The proportions mentioned here are indicative averages across a pre-defined set of commonly accepted ESG targets. * Selected responses Navigator 2020 | 17
Survey methodology For further information about the research please contact:
The Navigator survey is conducted on behalf
of HSBC by Kantar. It is compiled from Kate Woodyatt
responses by decision-makers at 10,368 HSBC Global Communications
businesses, ranging from small and mid- [email protected]
market firms to large corporations, across a Or click on www.business.hsbc.com/navigator
broad range of sectors.
Note: There may be a slight discrepancy between the sum of individual items
The respondents hold influence over their and the total as shown in the tables due to rounding.
company’s strategic direction and represent a
broad range of roles: including c-suite, finance, Whilst every effort has been made in the preparation of this report to ensure
procurement, sales and marketing. accuracy of the statistical and other content, the publishers and data suppliers
cannot accept liability in respect of errors or omissions or for any losses or
A total of 39 markets were surveyed between consequential losses arising from such errors or omissions. The information
11 September and 7 October 2020. provided in this report is not intended as investment advice and investors should
Europe: Belgium, France, Germany, Greece, seek professional advice before making any investment decisions.
Ireland, Italy, Netherlands, Poland, Russia,
Spain, Sweden, Switzerland, UK
Asia Pacific: Australia, Bangladesh,
mainland China, Hong Kong, India, Indonesia,
Japan, Malaysia, New Zealand, Philippines,
Singapore, South Korea, Sri Lanka, Taiwan,
Thailand, Vietnam
Middle East & North Africa:
Egypt, Saudi Arabia, Turkey, UAE
North America: Canada, Mexico, USA
South America: Argentina, Brazil
Rest of Africa: South Africa

Results have been weighted to be

representative of markets' international trade
volume (World Trade Organization data for
2017-2018).

Issued by HSBC Bank plc

8 Canada Square
London E14 5HQ
United Kingdom
www.hsbc.com

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