The energy transition and sustainability are intricately connected, shaping a future that harmonizes environmental, social and economic requirements. The energy transition involves moving away from fossil fuels (such as coal, oil and natural gas) and embracing cleaner, more sustainable energy sources. This shift includes adopting renewables like solar, wind, hydro and geothermal, while also enhancing energy efficiency. Ultimately, the goal is to reduce greenhouse gas emissions, bolster energy security and establish a resilient energy system.

The key catalyst behind the energy transition lies in our commitment to environmental sustainability. By shifting away from fossil fuels, we actively combat climate change, safeguard ecosystems and uphold biodiversity. Embracing sustainable energy sources not only ensures a dependable energy supply but also reduces reliance on finite fossil fuels and the volatility of global markets.

A successful transition fosters economic growth and development by enabling access to affordable and clean energy. This, in turn, fuels industries, promotes job creation and contributes to overall prosperity. Energy access is not just a luxury; it is essential for human well-being. Sustainable energy solutions play a crucial role in ensuring equitable distribution, particularly in regions where electricity access is limited.

Energy companies approach sustainability within their energy transition strategies by striking a delicate balance between environmental responsibility and energy security. Energy companies recognize that sustainability is not only about decarbonization but also about ensuring energy security and access. Companies are investing significantly in low-carbon energy solutions that include:

• Renewable energy sources (such as wind and solar)
• Nuclear energy (as a low-carbon option)
• Electrification of transport and industrial processes
• Energy efficiency measures

Energy companies must fortify both their security and sustainability agendas. Accenture states in its article A balanced energy transition: Sustainability & security that “Energy security cannot be achieved in a vacuum. It must be accompanied by a strong focus on sustainability, Scope 1-3 emissions reductions and scaling and expanding clean energy technologies and supplies". This involves increasing investments in an energy system that requires up to $5 trillion annually while balancing accessibility, affordability and environmental impact.^[i]

Energy CEOs now recognize the importance of Environmental, Social and Governance (ESG) initiatives in their corporate strategies. They believe that sustainable energy is the key to securing future growth and market value. For instance, Bernard Looney, CEO of BP, has articulated BP’s commitment to sustainability by stating: "Providing the world with clean, reliable, affordable energy requires reimagining our approach. Today, that becomes BP’s new purpose: reimagining energy for people and our planet. We’ll remain an energy company, but a leaner, faster-moving, lower-carbon, and more valuable one."^[ii]

This shift toward sustainability extends beyond the energy sector. According to McKinsey’s recent analysis, chemical companies with low-carbon product portfolios or significant exposure to sustainability-driven end markets have seen more than double the rate of shareholder returns compared to sustainability laggards since 2016. This underscores the positive impact of integrating ESG priorities into growth strategies, demonstrating that financial success and sustainability goals can go hand in hand.^[iii]

We are already seeing that low-carbon energy is growing significantly. McKinsey states that renewables share of energy will grow to 65-85% of the power mix by 2050^[iv] We’ve witnessed significant progress in renewables during 2023. According to EEI “Among renewable sources, wind, solar, hydro, biomass and geothermal accounted for 22% of the total generation (in 2023), which translates to 874 billion kWh”.^[v]

Going forward, energy companies must accelerate development in key areas like carbon capture, hydrogen production and energy storage. Embracing low-carbon strategies is crucial for long-term health. Secure energy drives compelling business outcomes and by prioritizing security and sustainability, companies create a resilient and thriving energy ecosystem.

 

 

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[i] Energy Transition Strategy: Sustainability & Security | Accenture

[ii] https://www.bbc.co.uk/news/business-51475379

[iii] Achieving sustainable profitable growth with ESG | McKinsey

[iv] Global Energy Perspective 2023 | McKinsey

[v] Solar and wind to lead growth of U.S. power generation for the next two years - U.S. Energy Information Administration (EIA)