Even as COVID-19 cases continue to surge, U.S. CEOs are looking to aggressively grow their businesses. Early findings from KPMG’s 2021 CEO Outlook report show that 49% of the more than 400 CEOs at large companies surveyed reported that they planned to undertake acquisitions that have a "significant impact" on their business over the next three years.

An additional 37% of CEOs surveyed reported they have a moderate M&A appetite and will likely make acquisitions that have a moderate impact on their overall organization. The heightened appetite for M&A activity comes as CEOs are looking to transform their organizations, KPMG CEO Paul Knopp told Fortune. Already in 2021, global M&A activity is up, with 35,128 deals announced, a 24% increase from 2020, according to Refinitiv data.

CEOs have a lot of confidence in the growth potential of the U.S. domestic economy and their own companies, and at the same time, Knopp said, there's a tremendous amount of liquidity in the market with low interest rates and trillions of dollars of uninvested capital sitting on the sidelines.

“CEOs are feeling pretty good about the domestic economy and their own businesses—they're feeling their organizations are fairly resilient. So despite all the kind of cautionary signs, they feel like they need to move forward into the future and be somewhat bold in terms of how they approach the future,” Knopp said.

Yet many executives still see risks on the horizon, even beyond the effects of the COVID-19 pandemic. The top five risks CEOs identified were taxes, supply-chain disruptions, reputational hazards, climate change, and cybersecurity, KPMG reported.

“There's no doubt about it, CEOs are playing offense and defense right now,” Knopp said. On the offensive side, they’re planning for aggressive M&A strategies and employing measures to ensure rapid digitalization. On the defensive side, companies are bolstering their supply-chain resiliency and shoring up their ability to navigate cybersecurity threats such as malware and ransomware, Knopp said. Only 11% of CEOs surveyed reported their companies were well-prepared for a cyberattack.

And while CEOs identified talent as a major risk last year, this year executives categorized it as an operational priority. Many companies are facing labor shortages right now in a huge way, so executives are working on strategies to deal with this shortfall, Knopp said.

In order to ensure employees are engaged, motivated, and productive, companies are focusing on employees’ mental health and well-being, investing in worker training and upskilling, expanding diversity, and providing opportunities for employee voices to be heard on issues such as racism and climate change.

About 59% of CEOs reported they will be looking at shared office spaces to allow increased flexibility following the effects of the COVID-19 pandemic. Over half of executives surveyed, 53%, are also looking to hire remote positions and about a third reported their workforce will be working remotely at least two days a week.

There's a lot of uncertainty about this latest COVID wave, Knopp said, and that’s certainly causing many executives to reconsider the future of work, remote work, and flexibility. “It’s kind of a wake-up call to make sure that we focus our employees, focus on our labor, focus on diversity and inclusive environments to make sure that we have the kind of workforce for the future that is going to make us all more successful,” Knopp said.