Helping you grow in a changing energy and resources world. Advising and delivering strategy, assurance, tax and consulting services for a sustainable future.
Climate change and the accelerating need for sustainability are creating challenges for energy, utilities and natural resources companies. But the future also promises new opportunities, from advances in alternative fuels such as hydrogen, to the development of entirely new energy systems.
To thrive in this volatile environment and meet the evolving expectations of consumers, investors and regulators, you need to lead the way – setting the course to a future that will look very different from today. That means reinventing business models, redefining markets, incorporating sustainable technologies and delivering new products and services in new ways – while also maintaining trust in the reliability of the current energy system.
PwC’s global community of solvers understands the unique challenges of your industry. We are ready to help you manage the challenges of energy transition and capture the new opportunities that change brings.
The coming years will see several major trends driving the evolution of the energy, utilities and resources sectors. In addition to climate change itself, these trends include depleting resources, major shifts in the global energy mix, rising pressure to achieve net zero and converging business models across industries.
At PwC, we see a number of emerging trends that give cause for optimism. Business models across a range of industries are converging as the world shifts to green energy and renewable resources. Fossil fuel businesses are investing in wind and solar power production, becoming integrated energy companies over time to support sustainability efforts. Hydrogen and other alternative fuels will gain in prominence. Automakers will become a critical part of the electricity grid as electric vehicles provide an expanding source of energy storage. Other battery technologies will also play an ever-more important part in our energy networks. And information technology companies will become critical for sustainability, as data, analytics and automation make greater efficiencies possible across resource supply chains. All of these trends pose both risks and opportunities for businesses across sectors. Our professionals can help you navigate these to achieve your goals.
Energy companies have the opportunity to play a lead role in a green economic recovery. Economic stimulus programs around the world provide support for renewable energy, low-carbon technologies and sustainability, but many also include incentives for fossil fuels and other ‘business-as-usual’ practices. At the same time, businesses are feeling increased pressure from investors, consumers and regulators to reduce emissions and meet changing expectations around environmental, social and corporate governance (ESG) behavior. These sometimes-conflicting demands could create risks for energy, utilities and resources companies, but could also create the potential for new business models and markets.
Sustainable investment funds are seeing record growth, with many billions aimed at reducing the cost of alternative energy technologies and decarbonising power generation and industrial processes. As renewables grow in importance, our energy mix will become greener but also more complex. This will create challenges around balancing levels of supply and demand. Manufacturing and other industries that depend heavily on carbon-based inputs will need to adopt alternative feedstocks or find ways to recycle carbon from existing materials. Similarly, any processes that produce CO2 as a byproduct or waste product will have to incorporate carbon capture, recycling and storage technologies.
Over the next few decades, many industries – and the energy sector in particular – will confront a scale of change not seen since the Industrial Revolution. As industries converge and new energy systems emerge, opportunities will open for new types of business clusters. Funding for such clusters is likely to grow dramatically, fueled by investors looking to direct their money to innovative ventures focused on sustainability. Companies can also expect to see a growing number of public-private collaborations that will explore alternatives to traditional market-based approaches and work to find sustainable energy solutions.
Successfully navigating to a new energy and industry landscape is a challenge that neither governments nor private-sector businesses can take on alone. Companies and the public sector will need to work together in new ways to manage the transition to a green, net-zero economy. This will require a willingness to innovate and to act boldly in developing long-term visions and policies. Industries and governments alike must be ready to explore different tools and mechanisms for driving change: from tax credits and subsidies to public-private investment partnerships and novel incentives to encourage behavioral change across markets. To build resilience and sustainability, businesses need to embrace other changes as well, adopting advanced digital technologies, new models of working, cross-industry collaboration and more.
Realigning any business for sustainable ESG goals won’t happen overnight: It’s a journey that will take years and will require a dynamic approach by companies. The sooner an organisation can begin that journey, the better prepared it will be to manage future risks and take advantage of emerging opportunities. In fact, delaying action on sustainability and net zero will create risks in the near term as consumer, investor and regulator expectations for responsible business keep rising. Establishing a successful ESG roadmap requires setting clear targets and goals, then creating strategies to achieve those through transformed business processes, capital investments, innovation programs and other incentive mechanisms. In other words, it means dramatically reshaping how organisations do business to meet ESG goals. PwC has the global expertise and experience to help with this.
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