Despite economic challenges caused by COVID-19, the energy transition remains on track, according to a new survey conducted by Deloitte.
Despite the pandemic and the economic hardships it has caused, energy and industrial leaders are expected to remain committed to decarbonisation programmes.
- 89% of 600 surveyed executives (92% oil and gas, 92% power and utilities, 87% chemical, 87% industrials) have or are developing a strategy to reduce reliance on fossil fuels.
- Companies will not completely cancel planned spending on technologies despite current temporary pauses posed on budgets. Companies will wait for recovery.
- COVID-19 will likely not compromise momentum for action on decarbonisation, reinforced by growing consumer and stakeholder pressures.
- Top drivers of decarbonisation include customer focus and digital technologies supporting energy efficiency (i.e., cost savings).
- Meeting decarbonisation reduction targets are tied to board and/or executive compensation, says more than 50% of surveyed executives.
- The main benefit for investing in decarbonisation is to improve the environment, says 71% of CEOs surveyed.
- While environmental benefits will likely be deemphasized as companies regain their footing through the economic crisis, reducing costs and maintaining a competitive position are expected to remain important even in the downturn.
- Oil and gas executives cited consumer support and regulatory mandates including policy incentives, as the top drivers for the energy transition.
- 49% of oil and gas executives plan to switch to cleaner fuels or renewables in their facilities and field operations.
- 56% of oil and gas executives indicated that plan metrics to reduce reliance on fossil fuels were tied to executive compensation.
- Top accelerators to achieving decarbonisation goals among oil and gas surveyed executives included partnerships; mergers and acquisitions; and organic investments.
- Digital technologies that improve energy efficiency were ranked as the top priority for oil and gas (59%); and industrial products and construction (53%) executives surveyed.
Stanley Porter the vice president of Deloitte, said: “This year has turned out to be a decisive one for the energy transition. While 2020 brought tremendous headwinds for companies on multiple fronts, leaders across the energy and industrial sectors haven’t lost sight of the climate crisis. Decarbonisation priorities have become deeply embedded into business strategies and created a momentum for action that will not easily be compromised by present circumstances.”
Kate Hardin, the executive director of Deloitte’s research center for energy and industrials, adds: “The COVID-19 crisis has highlighted many of the attributes that could accelerate the energy transition as companies re-evaluate supply chains, collaborate within and across sectors and pioneer capex-light scalable solutions with digital technologies and analytics at the core. The coming months will likely show how enduring these innovations may prove.”
Click here for more information about the survey.