The future of work, environmental, social and governance (ESG) performance, growth and tax have been top of mind for CFOs over the past two years as they charted new paths for their companies. Now that were well into 2022, I expect the same issues will likely stay high on finance leaders’ agendas. But this year, CFOs and their counterparts face new headwinds, with inflation a big concern. Our PwC Pulse Survey shows that talent, transformation and growth are the biggest issues for executives this year. These complex challenges add another layer of difficulty to executives’ efforts to build trust with stakeholders and deliver sustained outcomes those stakeholders expect.

Recently, I led a series of CFO Roundtable events to hear what was on CFOs’ minds. I connected directly with finance leaders from companies ranging in size, industry and location, and after those conversations, this is what I believe CFOs should consider as we move deeper into 2022.

Inflation, capital and growth

Inflation is a big worry for CFOs, with consumer prices rising 7% in December, the fastest pace in nearly 40 years. As a result, many companies are increasing prices and considering cost-cutting measures. While the Federal Reserve announced plans to raise interest rates, I believe sustaining growth, inflation and access to capital will play off one another in a pronounced way this year.

CFOs and other executives haven’t worried about inflation in a long while. But after a surge at the end of 2021, the vast majority of CFOs (79%) responding to our PwC Pulse Survey say they believe inflation will remain elevated at the end of the year. This is far higher than what all executives expect (69%). Companies face higher costs for products and services, and now, talent. Many CFOs are worried about margin pressures and already have plans to raise prices. In fact, 59% of CFOs say reevaluating pricing strategies is very important to growth this year, and 53% say they will prioritize pricing strategies to maintain or increase margin. But only companies with that pricing power can pass on increased costs to consumers without worrying about hurting sales or even their reputation.

Rising inflation can also increase the cost of capital and could prompt greater demand for capital, which could strain supply. Margin pressures can also lead to less cash flow from operations to finance investment plans, which means companies may need to look for external financing sources. It could also lead to more M&A activity.

Return to work and the changing workplace

The question about what work will look like this year is still very gray for many companies, as new variants, an incredibly competitive talent market, workers quitting at a record pace and continued worries about well-being compromise return-to-work plans. Companies know they need to pay for key talent, and many have budgeted for pay increases this year.

The majority of CFOs (83%) responding to our Pulse Survey say hiring and retaining talent is very important to growth this year, and two-thirds are planning to invest in talent to achieve those growth goals. But they face a big challenge: the extremely tight labor market. And 63% of CFOs say talent acquisition and retention challenges are the biggest risk to achieving growth goals this year — far higher than what all executives say (48%). While finance leaders may be thinking longer term — having a broader talent strategy, managing compensation for that strategy and the impacts to the bottom line — their concerns underscore a shift in thinking around talent. Talent, digital transformation, the supply chain and now, inflation, are all business issues that matter across the C-suite. CFOs have to work with their peers in human resources, operations and tax, for example, to look at and tackle these challenges in a collective, holistic way. Taking a unified approach to business issues will be critical to success — and to building and maintaining trust.

Walking the walk on ESG

Environmental, social and governance (ESG) issues, long priorities for many institutional investors, have made their way to the broader business agenda across the C-suite. In fact, our survey shows that 60% of executives believe ESG and sustainability issues will be integral to longer-term planning at the end of the year. This is critical, as ESG issues can be material to a company’s core strategy and long-term value creation strategies.

Still, CFOs report that their companies are at mixed stages of operationalizing their ESG plans. Only 34% of CFOs said that championing ESG issues is very important to their company’s ability to grow this year, compared with 43% of all executives. CFOs are dealing with the short-term urgency of inflation, pricing and margin pressures as they focus on getting costs in line. It’s important, however, for CFOs to stay focused on the longer-term value creation strategies, such as ESG. CFOs must remember that strategic ESG initiatives are not only good for a company’s stakeholders, its community and our broader society, they are also good for the company’s bottom line. CFOs will also want to get ahead of any new disclosure rules and regulatory changes related to ESG.

Finance leaders will have to address this mosaic of business issues as they make decisions. I look forward to hearing more from finance leaders about what is on their minds when I connect with CFOs again this spring.