See why energy strategies are getting lost and what can get them back on track
As organisations focus more on sustainability, energy management has become a critical component of their overall strategy. It's not just about being efficient anymore or meeting regulatory requirements – energy now plays a key role in driving innovation, enhancing brand reputation and improving competitiveness. In short, energy is no longer transactional; it sits at the heart of sustainability. Yet 57% of the businesses we spoke to fail to reflect this in their energy strategy, despite acknowledging that consumers want to do business with organisations that offer sustainable goods and services.
Misaligned priorities across stakeholders is causing problems for 28% of businesses who say it’s a barrier to net zero. From the data, it seems managers are more likely to take a long-term approach compared to their more senior colleagues. And when the opinions of those at the top diverge from those at site level, the path forward can become unclear.
With momentum slowing, nearly a fifth (17%) of businesses say their emissions reduction strategy is below expectations and a third think they’re likely to miss their 2030 emissions targets. As well as threatening net zero goals, a vague energy strategy can also lead to a variety of problems including fines from regulators, damage to your reputation, and a loss of investors who value ESG performance. However, there is some good news – and green shoots – ahead.
Despite stalling progress, businesses are poised to react proactively, with a third saying they’re ‘very likely’ to revise their net zero or decarbonisation strategies over the next 12 months. And although just 13% of the businesses we spoke to currently run on more than 70% renewable energy, 47% expect to reach this milestone within three years.
Innovation and energy independence are the main focus with nearly half of businesses saying they’re ‘very likely’ to invest in onsite energy generation. Upgrades to equipment and infrastructure, energy management software, and AI tools, are a close second. It seems that with market volatility ongoing and net zero targets fast approaching, the promise of uninterrupted operations and reduced dependence on the grid have never made more sense. It’s likely why many businesses are now open to new ways of funding this technology. With 34% of the businesses we spoke to saying they’re ‘very likely’ to adopt a new financing model – such as power purchase agreements (PPAs) and energy-as-a-service (EaaS) – in the next 12 months.
Markets and technology are changing fast and a strategy that was developed a year ago might not be right for your business today. So, while energy strategies must plan for the future, they must also be flexible and adaptive to the evolving energy landscape and changing business needs. That’s why important to take stock regularly to make sure you’re still on track. Restate your goals, assess your progress, and define a new path to net zero if needed.
For insight on how 500 organisations, from a range of energy-intensive sectors across Europe, are dealing with divergent strategies and defining a new path to net zero, download our report, ‘Navigating the Energy Labyrinth: Where next for the energy transition?’
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