Bain & Company has released its fourth annual Energy & Natural Resource Executive Survey, having surveyed over 600 industry executives across the globe to gain insight into industry leaders’ views on the energy transition, new technologies, investment opportunities, and the biggest decarbonisation challenges.
The survey results reveal that fewer executives now expect the world to achieve net-zero carbon emissions by 2050.
In fact, 62 per cent think the world will reach net zero by 2060 or later, up from 54 per cent in last year’s survey.
The report shared that this was consistent across most regions and is most strongly held among oil and gas executives.
That said, it was also found that most companies are maintaining or increasing investments in their transition-oriented growth businesses.
In particular, the Middle East (61 per cent), Asia-Pacific (55 per cent), and Latin America (51 per cent) are more optimistic about the prospects of their transition-oriented growth, such as renewables, hydrogen, bio-based products, lithium, and other transition commodities that will contribute to their company’s valuation and profits by 2030.
Further, executives are more concerned than ever about generating acceptable returns to scale up their transition-related businesses.
Executives say the greatest obstacle to scaling up their transition-oriented businesses is finding enough customers willing to pay higher prices (or having equivalent policy support) to create sufficient return on investment.
The percentage of executives identifying this as a “very significant” roadblock jumped 14 percentage points from 2023 to 2024, to 70 per cent.
Finally, it was also found that Artificial Intelligence (AI) is increasingly seen as a difference-maker.
More executives now believe AI (including generative AI) and digital technologies will have a “significant effect” on their businesses by 2030, at 65 per cent compared to 56 per cent last year.
The most promising AI applications include:
- Improving maintenance,
- Production, and
- The supply chain.
Emissions reduction is seen as the least promising, it was shared.
Most companies are focusing first on applications with a clearer, shorter path to a return on investment.
Over time, Bain & Company said it expects the industry to pursue “more advanced” and “potentially higher-value use cases,” such as increasingly automated design and engineering work.
“This year’s survey found that energy and natural resource companies have not dampened ambitions for their transition-oriented growth businesses. However, customers’ willingness to pay is a growing issue, as is the ability to generate adequate return on investment (ROI) in energy transition-oriented projects. As a result, companies are focusing on projects with a viable ROI path,” said Joe Scalise, head of Bain & Company’s Energy and Natural Resource practice, based in San Francisco.
Eric Beranger, partner and head of the Energy & Natural Resources practice in the Middle East for Bain & Company, noted, “The Middle East stands out in the energy sector thanks to its access to capital, top-tier infrastructure, and decisive governance. These strengths position the region as a leader in adopting low-carbon energy solutions and the global energy trade.”
Raja Atoui, a partner and member of Bain & Company’s Energy & Natural Resources and Sustainability & Responsibility practices further added, “The region’s journey towards a sustainable energy future is marked by significant strides in energy efficiency improvement, renewable energy adoption, and sustainable fuels development. By prioritizing these areas, the Middle East not only contributes to global efforts against climate change but also secures a competitive edge in the evolving global energy landscape, demonstrating a commitment to innovation and sustainability that resonates worldwide.”
Full insights can be found here.