10 Takes on the Energy and Resource Transition
The shift to a greener future is underway, but our survey shows it’s tough out there. Here’s what more than 1,000 energy and resource executives had to say.
Emissions reduction
01
Innovation, impact, and economics
02
Net zero
03
Comparing progress
04
Core business
05
Low-carbon assets
06
2030 technologies
07
Engine 2
08
Partnerships and acquisitions
09
10
Talent, culture, and policy
say reducing Scope 1 and 2 emissions is a key priority for their company
say that a net-zero commitment is critical
expect their company to change significantly in the next 10 years (up from 36% in 2020)
expect their industry to make progress toward net zero by 2030
88%
79%
47%
96%
Executives overwhelmingly believe that reducing carbon emissions and reaching net zero are top priorities.
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give meaningful weight (at least 10%) to each imperative
50%
22%
On average, executives assigned these weightings to each of the three factors in their decisions:
28%
Impact
Economics
Innovation
Executives believe all three are important.
2022
42% expect the world to achieve net zero by
2050
2057
2070
On average, executives think the world will reach net zero by
One in four think the world won’t reach net zero until after
Executives have very different ideas about when the world will reach net zero.
believe they will decarbonize faster than peers
37%
is the average reduction in carbon emissions that executives think their companies will make by 2030
expect to decarbonize faster than the world as a whole
61%
Most expect to reduce emissions significantly by 2030, faster than the world as a whole.
expect their core business to grow rapidly over the next decade due to more electrification
see their core business declining over the next decade, despite recent spikes in demand and price
Some companies are developing greener and more circular versions of their products
Others are exploring new growth markets including materials for electric vehicles and low-carbon hydrogen
Growth is expected from feeding and supplying the growing population, as well as from shifts in consumer preferences like bio products, supply transparency, and veganism
Portfolios are shifting as companies ramp up on commodities for the energy transition, electrification, and infrastructure while running down thermal coal
Power utilities
Oil and gas
Chemicals
Mining and minerals
Agribusiness
63%
Electrification will boost some sectors, but the energy and resource transition will prove more disruptive to others.
Low carbon-assets
expect significant progress from their investments in low-carbon assets or solutions by 2030
expect real progress from their low-carbon investments by 2030
expect to see real progress in decarbonization by 2030. Many are expanding into new markets related to the energy transition
Many are divesting from coal, focusing on minerals for the energy transition, decarbonizing operations
Most are focused on decarbonizing operations
Utilities
76%
62%
~50%
Some have had to move quickly and substantially, while others facing different challenges will take longer.
Three out of four chemicals executives expect circularity to become more important
expect AI and other digital technologies to have a big impact
of oil and gas executives see carbon capture, use, and storage as critical
Three out of four utilities and renewables executives expect energy storage to have a significant effect
About two-thirds of executives in chemicals, food, and agribusiness expect bio-based products to become more important
of executives across sectors expect renewables to have a big impact
67%
Executives expect these seven technologies and practices to have a big impact on their business by 2030.
of food and agribusiness executives think that organic and regenerative agricultural practices will significantly affect their industries
77%
Executives are bullish on their prospects for developing new growth businesses.
Across sectors, executives are increasing capital allocations to new growth areas
2020
16%
23%
72%
expect their new growth businesses to scale by 2030, and account for more than 10% of their companies’ profits or valuation
North American companies are investing less in new growth businesses than their peers in Europe and Asia. They're expecting less too
Share of capex for Engine 2
Share expecting significant contribution from Engine 2 by 2030
19%
25%
80%
North America
Europe
Asia-Pacific
Partnerships are emerging as the preferred way to manage transition risks, in part because there aren’t enough scale acquisition targets.
see partnerships as important to develop their new growth businesses
Most see partnerships as more viable and a better way to share risk than M&A, particularly since there are so few good candidates for acquisition
are pursuing large acquisitions
are pursuing smaller acquisitions
26%
48%
Partnerships and acquisition
Executives see the need for new expertise, but a skill shortage hampers their efforts, and too many companies are drawing from the same well of talent. As companies scale up new ventures, competition will become more intense, making retention even more important.
say they don’t have enough people with the right capabilities for their new growth businesses
among executives who expect their companies to see transformational change by 2030
About one-third of companies in mining and oil and gas say they’re having difficulty attracting and retaining talent for their core businesses, compared with 16% to 21% in the other sectors
of companies are already adapting their talent strategy
see diversity, equity, and inclusion as important for improving outcomes
45%
That rises to
~ 33%
16%–21%
Mining, oil, and gas
Other sectors
93%
57%
Across most sectors, executives see culture as the most pressing barrier after talent. Drilling down on specifics, executives said the biggest roadblocks for creating a successful Engine 2 business include:
Lack of entrepreneurship culture
Difficulties in creating a lean organization, updating old business processes and procedures
Inability to develop an innovative and agile culture within the current business
Challenges adapting company culture to new business dynamics and processes
Resistance of incumbent culture to change
Government policy is less certain in some places than others. But across regions, executives tell us that the speed of processing approvals, rather than uncertainty, is the first barrier to progress.
Executives expecting the most transformational change by 2030 are outperforming peers by:
Actively participating in shaping policies
Delaying investment in new business areas due to policy uncertainty
Executives expecting most change
The rest
North American oil and gas companies are almost twice as likely to be delaying investment in new business areas as those in Europe, perhaps due to greater clarity on regulations in Europe
42%
30%
43%
Talent
Culture
Policy
35%
Next
Executives see these three issues as the biggest impediments to success and returns.
~33%
