Europe’s major company leaders are re-evaluating net zero timelines in light of energy market complexities.
- A recent survey reveals 95% of CEOs have adjusted their timelines due to energy-related challenges.
- Despite sustainability being important, only 12% of CEOs make quick decarbonisation a top priority.
- Firms plan to modestly boost their investment in energy transitions over the coming year.
- Supply chain concerns and lack of a unified energy procurement strategy are prevalent among businesses.
In response to the dynamic and uncertain energy market, chief executives from leading firms across the UK, Germany, France, and Italy are revisiting their strategies to meet net zero goals. A comprehensive survey conducted by Aggreko, involving 400 CEOs from companies with significant turnovers, reveals that an overwhelming 95% have re-evaluated their net zero timelines. The prime reason cited for this shift is the challenges related to energy supply and pricing.
While environmental concerns remain vital, the survey indicates a nuanced prioritisation among these leaders. Only 12% of the sampled CEOs placed rapid decarbonisation at the forefront of their agendas, with a larger focus being directed towards reducing energy costs and securing commercial benefits. This shift in priority underscores the delicate balancing act between profitability and sustainability that these companies must navigate.
Aggreko’s report, “Rebalancing the Energy Transition,” sheds light on the continued commitment of businesses to embrace energy transition investments. Although four in five companies are poised to increase their investment over the next year, the anticipated growth in investment is expected to be modest. Businesses are carefully weighing cost implications, commercial viability, and commitments to environmental, social, and governance (ESG) standards as they move forward.
The report further highlights a trend towards decentralised energy solutions, with over half of the surveyed CEOs expressing intentions to expand in this direction. However, the road to achieving energy transition is fraught with hurdles, notably supply chain issues, which 49% of executives cited as a substantial risk. For 21%, these supply chain challenges represent the most significant obstacle to their energy transition plans.
Interestingly, there is no dominant preference emerging for a single energy procurement model. The current market sees many firms favouring capital purchases, with 36% regarding it as the best fit for their organisational needs. Aggreko advocates for leveraging supply chains to support energy transition strategies while maintaining a focus on profitability.
Robert Wells, Aggreko’s Europe president, articulates the sentiment driving these shifts: “It is not surprising that our research has uncovered leaders across Europe are looking for change when it comes to their energy supply chain. In a tough economic landscape, grid instability and connection delays, price uncertainty and looming ESG targets are impacting many businesses’ energy transitions.” His remarks reflect the broader challenges facing industries as they seek to adapt and innovate.
The evolving landscape of energy transition requires European businesses to deftly balance economic demands with sustainability commitments.
