Insights on the Energy Transition: What every leader needs to know
2022 Survey results
Drop in confidence in the doability of the energy transition from 2021
Increase in confidence in the Industry leaders to deliver the transition
75% (2021) vs 50% (2022)
Confidence in doability of the transition
Women
60.5%(2021) vs 82% (2022)
Confidence in industry leaders to deliver the transition
Middle management less confident than new entrants & senior managers
Leader takeaways
More realistic view of the transition
- Not just about technology
- Complex problem – energy prices/energy security
- Behaviour change
Leaders are well regarded and have an opportunity to drive the change
Key to the change is middle management
- Engage and understand
- Be realistic about degree of change
- Stop activity
- Fresh inputs eg Reverse mentoring
Changing industry
- Over the last few years investment in renewables and other energy transition areas has been increasing
- Bloomberg NEF* reported in 2022 a record amount of $1.1T (up 31%) was invested in energy transition which for the first time matched that of fossil fuel investments
- Shift to renewables 18% growth in 2023 and the IEA states they will be top electricity growth and are starting to replace fossil fuels
* Bloomberg NEF energy transition investment Trends 2023 Jan 2023
Challenges it faces
- How do mature companies, transition to a new commercial model with clean tech and renewables and utilise the profits from oil and gas to enable this
- How do the new entrants in the market take advantage of the growth opportunities and scale their operations effectively
What are people seeing mature companies do?
People feel that mature companies need to be investing more in the transition and the challenges of transiting to a different commercial model
A number of respondents also mentioned that they felt more investment should be focused on renewables & clean tech technology
Bloomberg NEF* states we need to triple the investment global to get on track for net zero
37% (2022) vs
75% (2021)
Using data to build new products
Mature Company challenges
Respondents felt the following challenges were similar to last year
63% (2021) vs 68% (2022)
Shifting operating models
71% (2021) vs 63% (2022)
Faster decision making
60% (2021) vs 56% (2022)
Learning different technologies
However there were some differences
34% (2021) vs 62% (2022)
Increase in the challenges in adapting to people coming from other industries
63% (2021) vs 37% (2022)
Decrease in being more customer focused
What leaders need to consider
Be Careful of Greenwashing
- Be transparent
Operating Model Transition
- Set up for skills transition and development
- Models for end of life
Speed of change, Legacy vs invest
- Resource allocation
- Value staff on legacy assets
Culture change
- Inclusion
- Decision making
Overall the barrier to entry for individuals new to the sector is not seen as an issue
- Individuals scored it 6 out of 10 for new entrants to join the sector (10 being the easiest)
63%
of respondents are working with people new to the sector
For leaders to consider
- Ensure individuals can clearly see how their role/activity aligns and furthers the company’s purpose
- Inclusion, particularly for a company that is bring new people with different experience and skills.
Challenges for new entrant companies
- Demonstrating returns and establishing themselves as being credible in the sector – 74%
- Keeping up with demand – 50%
- Protecting / unique technology – 55%
- Investment into the energy sector – 57%
What leaders need to consider
- Leadership team
- Relationship with investors
- Operating model and scaling operations
Individuals score themselves 6.4 out of 10 in terms of clarity and future roles
Individuals are taking action ….
People taking time out of the day job to learn
Actively networking to understand opportunities and make connections
People working on transferable skills
Actively looking for opportunities to change career
Do nothing
Companies support individuals with…
Individuals are investing to build their energy transition plan. Are companies doing enough?
What should leaders consider to keep their staff engaged?
- Demonstrating career paths
- Link their jobs to the energy transition
- Career conversation
- Company-wide events
- Adapting organisational models to foster skill transfer and learning
So how ready are we?
As an industry
82% (2022) vs 68% (2021)
Felt the industry was starting to get ready
As an organisation
52% (2022) vs 44% (2021)
Felt their organisation was starting to get ready
As an individual
43% (2022) vs 42% (2021)
Felt they were starting to get ready
Overall there is an increase in readiness from last year
What leaders need to take away
- Individuals have confidence in their leaders so capitalise on it
- Transition is now – make sure you move fast enough. Key pain points for leaders to address
- Operating model- how does it need to change?
- How will you engage your middle management?
- How do you ensure balanced allocation of resources in the transition?
- Plan to support your people’s development through the transition?
And Finally
The Path toward sustainable energy sources will be long and sometimes difficult
…(we) cannot resist this transition we must lead it
Barak Obama
What action will you take first to lead the Energy transition?
