As many as 62 percent of industry executives expect the world to reach net zero by 2060 or later, a new survey has revealed. This marks a significant uptick from the 54 percent recorded in the previous year.
Bain & Company’s fourth annual Energy & Natural Resource Executive Pulse survey offers a comprehensive look at 600 industry executives’ evolving sentiments, investment priorities, and challenges shaping the sector in 2024. With a focus on decarbonization, technological innovation and market dynamics, the survey highlights key themes driving strategic decision-making across the industry.
Optimism amidst challenges
Despite the energy and natural resource companies’ continued investments in decarbonization, Bain & Company reveals that 62 percent of executives now anticipate the world will reach net zero by 2060 or later. This outlook is consistent in most regions and is most strongly held among oil and gas executives.
Notably, executives in regions such as the Middle East, Asia-Pacific and Latin America are maintaining or increasing investments in renewables, hydrogen, bio-based products, lithium and other transition commodities. However, concerns persist regarding the generation of acceptable returns on investment (ROI), with 70 percent of executives in Bain & Company’s survey highlighting customer willingness to pay as a significant obstacle.
“This year’s survey found that energy and natural resource companies have not dampened ambitions for their transition-oriented growth businesses,” said Joe Scalise, head of Bain & Company’s Energy and Natural Resource practice. However, Scalise notes that customers’ willingness to pay and the ability to generate an adequate return on investment in energy transition-oriented projects are growing issues. “As a result, companies are focusing on projects with a viable ROI path,” Scalise adds.
Middle East: A beacon of innovation
Eric Beranger, partner and head of the Energy & Natural Resources practice at Bain & Company Middle East, underscores the region’s pivotal role in advancing low-carbon energy solutions. With access to capital, robust infrastructure and decisive governance, the region emerges as a leader in embracing sustainable energy initiatives and the global energy trade.
Raja Atoui, partner and member of Bain & Company’s energy & natural resources and sustainability & responsibility practices, further emphasizes the region’s commitment to energy efficiency improvements, renewable adoption, and sustainable fuel development. This positions the Middle East as a global leader in innovation and global efforts against climate change.
Read: Abu Dhabi named Arab Environment Capital for 2023
The rise of artificial intelligence
As digital technologies continue to reshape the energy sector, artificial intelligence (AI) emerges as a pivotal driver of transformation. Executives increasingly recognize the potential of AI in enhancing maintenance, production and supply chain operations. Meanwhile, they see AI applications in emission reduction as less promising. With 65 percent of respondents anticipating a significant AI impact on businesses by 2030, Bain & Company reveals that the industry will focus on applications with a clearer, shorter path to a return on investment. With time, Bain & Company expects the industry to pursue more advanced and potentially higher-value use cases, such as increasingly automated design and engineering work.
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