"I'm cautiously optimistic," says Colin Hunt, CEO of AIB, about his outlook for the year ahead. "I'm optimistic because we seem to be putting the extraordinary pandemic behind us, and cautious because there are challenges ahead."

While the Irish economy is returning to a more normal operating environment in relatively good health, thanks in large part to Government support, Hunt is balancing the significant rebound in activity and labour market recovery with the prospect of near-term threats to growth.

Challenges emerging

"There are challenges emerging, not least extreme stresses in international politics and a significant increase in price pressures around the world," Hunt says, speaking to PwC for the 25^th Annual Global CEO Survey. "We've spent the last decade or so living in a world with abnormal monetary policy and ultra-low interest rates, but 2022 is likely to bring the first interest rate increase in over a decade."

Hunt also cites cyber-risks as a continuing threat to global business, but one that is actively and aggressively mitigated at AIB given the company's reliance on its digital infrastructure. There are 2.86m interactions completed on any given day in AIB, of which digital accounts for 95%. That statistic alone highlights the importance of digital security in a world with ever-increasing cybersecurity threats. "To minimise our exposure, we updated our cybersecurity strategy, conducted an independent evaluation of our maturity in this space, adhered to various industry standards and invested heavily in a dedicated 24/7 security operations centre that continuously monitors our systems to detect and respond to cybersecurity incidents," says Hunt.

"The cyberthreat is becoming more frequent and more sophisticated, and it is incumbent on us to invest in capital and resources to ensure that our systems are robust, and also that our customers and staff are aware of the threats posed by bad actors."

ESG in the spotlight

While Irish CEOs cited cyber-risk as the dominant threat for the year ahead, climate change was a close second. Hunt believes that those who fail to adopt an ESG-aligned approach to business will suffer in the long-term, but he perceives ESG in all its forms as more of an opportunity than a threat.

"Climate change is a terrifying phenomenon, and we have to do all in our power to arrest and reverse it. As a bank, AIB has three roles to play – as a provider of green finance, as a business operator in our own right, and as a buyer of products and services. In real terms, we have doubled our Climate Action Fund to €10 billion, established a €500 million fund for the development of social housing, and implemented a new 'responsible supplier' standard that will help us reach net zero by 2030."

We, businesses and individuals, are very much in the foothills of the ESG movement, in Hunt's view, and it is an issue that will only become more pressing with time. "The pandemic exposed the frailty of the planet we all inhabit, so this is a theme that will become ever more pressing for our stakeholders – our customers, employees, shareholders and regulators," he says.

To provide a transparent view of the bank's ambition and progress in this area, Hunt uses AIB's annual Sustainability Report essentially as a management tool to hold the business to account on its overall ESG strategy. "There's no point in having a grand ambition to be a leading contributor to the greening of the planet unless businesses set out clear metrics, measure their performance against those metrics, and report on them," he says. "It isn't enough to be ambitious. You have to be transparent and clear in terms of what you will do to bring about the necessary change, recognising the fact that this is a multi-year, multi-decade piece of work."

Remarkable resilience

Rather than push the ESG agenda to the side, Hunt maintains that the pandemic in fact brought it centre-stage. And although the longevity of the planet is at stake, at a personal level, COVID-19 taught him a lesson that has boosted his optimism – that humankind is a remarkably resilient species.

"When radical change is necessary, we've proven our capability to respond and implement at pace. At AIB, the pandemic significantly accelerated three long-term trends: digitalisation, our ways of working, and sustainability. And although change can be frightening, we now know that we can respond to extraordinary circumstances and extraordinary change in ways that change our lives – I hope, for the better.