A study from PwC suggests the more business leaders think their company is likely to be impacted by climate change, the more likely they will take action.

What inspires C-suite leaders to take action on climate change? The PwC Global CEO Survey report believes the answer is straightforward – awareness of climate risk. The report spoke to business leaders about their exposure to the potential threats of climate change, and the data collected created an index determining the likelihood that respondents would initiate climate-related actions, like emission reductions or using climate-friendly products. The data from the study presented a pattern that a more significant exposure to climate change, as perceived by a leader, corresponds to a higher figure on the climate action index. Furthermore, similar studies show a direct connection between the perception of climate risk and their confidence about long-term success. The bigger threat that CEOs consider from climate change, the more likely they feel their business won’t be economically sustainable in the long term if it remains on its existing path. The connection between the considered risk and planned action suggests three critical factors for the C-suite leader:

Measuring your business’s climate risk exposure: Over or under-estimating climate risk can considerably impact business strategy and planning. The quality of climate data has improved, making it easier for business leaders to incorporate climate-focused factors into their business plans. Continued measuring of climate risk exposure can enable businesses to focus on actions that will strengthen and grow their competitive advantage.

Managing the supply chain – Climate change will impact the operations of a business and others across its entire supply chain – some of which may be in areas likely to experience more severe climate risks. As experienced during the pandemic, disruption to supply chains can result in business operations ending. Focusing on creating resilience against climate risk needs strong connections with key suppliers.

Work with your investors

Comparing the results of the PwC CEO survey with the findings from the Global Investor Survey indicates that CEOs are less likely than investors to voice their concerns about the potential financial implications of climate change on businesses. Furthermore, CEOs stated considerably less progress on climate actions that investors consider broadly effective. Collaborating with investors about the business’s climate plans may be required to create a clear understanding of how an organisation views climate risks and what it is doing about them.

Overall, the risk action link implies that business leaders understand the mounting pressures from climate risk and recognise that implementing the necessary actions to mitigate these risks must happen soon.

SolarPower Europe recently warned that time is running out to support European solar manufacturers and is urging decisive action. The trade association announced their concerns after a statement by the EU Finance Commissioner Mairead McGuinness in the European Parliament, highlighting the pricing crisis facing the European solar industry.

SolarPower Europe explained that the Commission will explore the impact of potential trade measures against European climate targets, bearing in mind that EU solar deployment targets rely on imports.

Walburga Hemetsberger, the CEO of SolarPower Europe, explains that history shows that trade defence measures didn’t necessarily revive the reshoring of solar manufacturing and came at a time when there were declines in solar deployment. Hemetsberger believes there are more stable solutions on offer. According to the CEO of SolarPower Europe, significant European plans for wind and hydrogen, SolarPower Europe is urging a specific EU Solar Charter.

The landscape for European solar manufacturers has changed since the introduction of the EU Solar Strategy in May 2022, with manufacturers now facing financial difficulties and requesting more support and better assistance. Hemetsberger recognises the acknowledgement of the Commissioner’s views on the role of the Net-Zero Industry Act and the EU Solar Strategy but believes further action is needed to support EU solar manufacturing.

The German industry is calling for a resilience plan for solar facilities developed with components manufactured in Europe and investment incentives for delivering new solar manufacturing sites to assist local manufacturers and reduce the dependence on China.

The action taken by the Federal Association of the Energy and Water Industry (BDEW) came after several businesses announced plans to close production facilities in Germany due to a lack of government assistance due to expansion plans for the US, lured by the benefits within the Inflation Reduction Act (IRA).

With global leaders working together to discuss a greener future, it has raised more questions about one specific challenge – achieving our net zero goals can only happen if we have the available talent with the necessary skills. New insights from LinkedIn have highlighted that we face a significant shortage of green talent who will support us on our journey towards a sustainable future.

The insights from the LinkedIn report highlighted that we face a significant shortage of green talent to support our path towards a sustainable future. The latest data indicates that green job postings increased by nearly twice the rate of rising green talent between 2022 and 2023, and only one in eight workers in the UK currently have the necessary green skills. The study interprets green skills as contributions to decreasing pollution or protecting resources, like climate action mitigation and sustainable procurement. The imbalances between the demand and talent with green skills are accentuated by gender disparity.

Women remain underrepresented by the green economy, with data showing they make up only a little over 30% of professionals in green industries, compared to 44% in other sectors. This gap extends even further in leadership roles, with women making up only 20% of VP roles and 21% of C-Suite positions in renewable energy markets worldwide. To improve the widening skills gap, HR and learning and development leaders will play a critical role in developing green skills within their company and ensuring the balance of opportunities for men and women improves.

The challenge is that while businesses continue hiring for green positions, in many cases, these are new roles, and there aren’t enough people with the skills to do these jobs. With the demand for green talent exceeding the growth of green skills, we will continue to see employers focusing on hiring and how they can train and develop professionals with the skills required for emerging and in-demand roles. To achieve a more green and sustainable future, employers will increasingly become educators, training individuals in green jobs through tailored programmes and implementing upskilling to support people’s transition into green jobs. Energy provider E.ON is one example of an employer that enables employees to secure access to green skills from entry-level to senior leadership. EOn UK understands that nearly 50% of young people between the ages of 16 and 24 will choose an opportunity to pursue a green job over taking a traditional path of higher education. Businesses must provide the relevant training and learning programs to facilitate this shift.

There is no definitive solution to this challenge, but clear actions associated with training and development can support the accelerated move to a greener future. Another way to support this transition is for business leaders to take the time to develop a thorough understanding of the skills businesses require to achieve their climate goals. By doing so, companies can implement customised and targeted reskilling plans and on-the-job training for their employees. Training and reskilling will be essential to reduce the gender gap in green industry roles. While women have been entering the green talent pool at an accelerated rate than men over the last few years, data suggest that the rate of change is too slow, and the green gender gap is continuing to widen. This gap is a significant issue as reaching our net zero goals will require an entire economic approach.

Tackling the talent shortage and levelling the playing field means businesses must focus on upskilling their employees and creating inclusive development plans, enabling everyone the opportunity to learn and develop. While there are challenges to entering green jobs, business leaders can tackle these barriers and reduce the green skills gap by creating a detailed understanding of the skills their business requires to achieve their climate goals.

Climate change and sustainability have become top priorities for global leaders and businesses. This focus influences discussions and strategies towards energy transition, driving us closer toward a green industry future. Environmental, social and corporate governance (ESG) processes are now critical skills for current and new leaders, and sustainability-focused positions are evolving.

Chief sustainability officers, ESG professionals, CSR managers and experts in sustainable supply chains are needed to support culture changes, drive long-term plans and strengthen business sustainability. Furthermore, the rising demand for renewables, electric vehicles, green finance and other sustainability-focused solutions will likely significantly increase the demand for sustainability leadership in the coming years.

At the leadership level, organisations are actively seeking renewable energy professionals. Individuals with diverse backgrounds in EPC, business development, engineering, and design and experts in policies within the solar and wind industries are in high demand. The requirements for green leadership positions vary across sectors.

Whether it be renewable energy in utilities or ESG integration in finance, green leaders must be agile to sector-specific challenges while achieving sustainability. This approach ensures that businesses can remain agile and adaptable in their commitment to environmental and social responsibility while continuing to satisfy the requirements of industry and stakeholders. 

There is rising demand for R&D and tech leaders in battery storage systems, material sciences and individuals with chemical science backgrounds. Another field gaining momentum is digitalisation in the renewables market. The solar and wind sectors continue to be more digitally connected, and analytics is becoming a prominent feature. Senior leaders in technology, cloud, data science and data security will rise in demand as more C-Suite positions open within the industry.

Green hydrogen will become a focus area in the coming years, requiring leaders in manufacturing, supply chain & procurement, project management and professionals in material sciences and chemical processes. According to industry experts, success in these emerging positions will depend on a combination of sustainability experience, strategic and creative thinking, data knowledge, agility and strong communication skills. Furthermore, experience in supply chain management, a strong understanding of the circular economy and stakeholder engagement are critical to support the sustainability goals of a business. 

One key challenge with emerging sustainability roles is the availability of talent with the necessary experience and background in some specific areas like solar modules or electrolyser manufacturing. The availability of talent at the leadership level in renewable energy is a priority focus area for the future success of climate and sustainability plans.

In a stage of growing climate consciousness and environmental commitment, the responsibility of C-Suite leaders is experiencing a significant transformation. The future C-Suite leader goes well beyond profit generation, representing the key to driving towards a sustainable and clean energy future. This shift requires new skills, values and a strategic change beyond profit. Energy Search Collective explores the defining characteristics of the future C-Suite leader and how they influence the rate of change towards a cleaner, greener and more sustainable future.

Visionary Leadership

The future leader prioritises a vision that incorporates the urgency of focusing on clean and sustainable activities. This form of leadership goes beyond adopting short-term priorities, acknowledging that long-term success is directly associated with environmental stewardship. C-Suite leaders should focus on guiding their business towards a low-carbon future, creating definitive goals directly connected with global sustainability targets.

Environmental Literacy

Compared to the more traditional leader, the future C-Suite leader understands environmental issues, climate science and clean energy technologies. This level of environmental literacy strengthens leaders to make strategic decisions, supporting plans that benefit the environment and improve the resilience and agility of businesses facing climate challenges.

Innovation and Agility

The transformation in clean energy technology means C-Suite leaders must be capable of being innovative and agile. Future leaders must be willing to embrace new tech, capable of adopting renewable energy and principles of circular economy into their business models. These leaders recognise that innovation is more than just a strategic advantage but a necessity for progression in a future sustainable world.

Focusing on the triple bottom line

The future C-Suite leader goes beyond the traditional bottom line to incorporate people and the planet equal to profits. Embracing people, the planet and profit should become a priority for all leaders. This type of leader focuses on delivering value for the shareholders, employees, communities and the environment. Social responsibility and environmental impact are critical elements of the decision-making process.

Lead with collaboration

Acknowledge the connections with global challenges, C-Suite leaders are prioritising collaboration. They work with stakeholders, government groups and other relevant industry members to support collective action towards sustainability. Collaboration supports creative partnerships, strengthening the impact of clean energy plans.

Stronger Risk Management

The future C-Suite leader manages a landscape dominated by climate-related risks and regulatory uncertainties. Taking a proactive approach to risk management requires scenario planning, building resilience and recognising that sustainable activities will minimise long-term risks. These leaders are resilient in new challenges, approaching potential issues as opportunities for further growth and innovation.

As we move towards a sustainable future, the C-Suite leader has become critical in guiding businesses through challenging times. The future leaders are more than executives; they’re environmental supporters, innovators and collaborators, shaping the future with clean energy and sustainability as fundamental principles for business and society. Embracing this leadership style isn’t only a strategic necessity but a moral responsibility for future leaders who will shape and redefine the future of our planet.

This year is forecasted to be significant for climate action, whether it be momentum with new policies, biodiversity playing a vital role in the energy industry or how we continue to tackle the green skills gap. The following year will be critical regarding climate for companies and how energy and climate action will progress throughout 2024. 

Many organisations today have established a sustainable business, which is critical for a competitive edge and defining longevity. While the UK is falling behind Europe and the US on climate goals, the next political successor will likely focus on strengthening the nation’s climate goals. Combined with accelerated climate policies, businesses must focus on long-term goals and prioritise climate progress.

Other industry specialists believe women will continue driving climate measures and tackle the green skills gap. There has been a significant rise in hiring for green positions in the UK over the last few years, adding to the ongoing green skills gap. As the requirement for climate skills increases and new green industry jobs emerge, women are in an ideal position to take up leadership roles across organisations. Women’s contribution and leadership in climate measures are connected with better resource governance and higher productivity. In the private sector, more gender-balanced corporate teams and C-Suite have proven to deliver more sustainable and efficient policies.

C-Suite will prioritise climate action to secure business success

Business leaders recognise that the success of their company largely depends on how they approach and manage climate action. As a consequence, more executive-level leaders will explore the incentives associated with climate action. Funding will also become more influenced by the sustainability rating of an organisation, such as in France, where public procurement requires companies to be sustainable. Reputation and penalty implications for non-compliance with climate measures could also impact businesses significantly.

AI will drive further climate action but requires the right people in place

Innovation concerning AI in the climate tech industry will transform the rate of climate action, especially by measuring emission calculations and enhancing the overall process. This progress will allow companies to generate more reliable data on carbon emissions, enabling them to act and respond quickly. While there are many opportunities for implementing AI in climate data generation, it’s critical to have the right team that effectively understands and interprets the technology. CTOs and Chief Sustainability Officers will work closer to harness new technologies and avoid other solutions, which could impact their emission and overall impact on the environment.

Nature-based solutions will become a priority of climate strategies

While carbon has become the focus of sustainability discussions, 2024 will likely see biodiversity and corporate nature-related disclosures become a priority. In the UK, developers must achieve a 10% biodiversity net gain from January 2024 onwards.

With evident biodiversity and environmental challenges, companies will be committed to measuring and limiting their impact on ecosystems. Sustainability leaders must have the tools to measure their impact on biodiversity and the environment.

 

According to a new study from Carbon Brief, fossil-fuel-powered electricity in the UK declined by 22% in 2023 to its lowest level since 1957. Interpreting data from the Department for Energy Security and Net Zero’s (DESNZ) Energy Trends with Balancing Mechanisms Report, the Carbon Brief discovered that electricity generated by fossil fuels has declined by two-thirds (199TWh) to 104 TWh since peaking in 2008. Within this, coal decreased by 97% (199TWh) and gas by 45% (80TWh).

The continued decline of coal and gas

In total, fossil fuels accounted for 33% of the UK’s electricity generation last year, gas represented 31%, coal 1% and oil just under 1%. Carbon Brief highlighted the considerable decline in fossil fuels within the UK electricity mix compared to 1957 when fossil fuels represented nearly 97% of total electricity generated. This figure remained relatively balanced until the increase of nuclear power began in the late 50s, replacing a segment of the fossil fuel market.

Even with the rise in nuclear capacity, fossil fuels still provided 76% of the UK’s electricity in 2008, with gas making up 45% of the total energy mix and coal 30%. In 2023 however, gas generated 98TWh (a decrease of 80TWh from 2008), and coal produced 4TWh, representing a 115TWh reduction since 2008. Data suggest that coal has nearly disappeared from the UK’s electricity mix, with only one coal power station remaining active in 2023.

What else created the significant decline in electricity generated by fossil fuels last year? Carbon Brief suggested that this decline was down to two factors: the considerable rise of renewables, which has increased by 113TWh from 2008 and a reduction in the electricity demand, which dropped by over 20% since 2008. According to the Carbon Brief, the combination of these two factors had a significant impact on electricity generated by fossil fuels.

The rise in renewables

According to a study by Carbon Brief, renewable electricity output increased from 23TWh in 2008 to 135TWh in 2023, matching the record output in 2022. Electricity generated by renewables last year consisted of: 14TWh solar, 82TWh wind, 5TWh hydro and 35TWh bioenergy

Studies by Rystad Energy indicated that the rate of solar installations in Britain tripled in 2023, with 2.9 GW of domestic and utility-scale solar installed between 2022 and September 2023. The study also highlighted that the solar installation rate in 2023 meant the installed capacity was higher than in the previous six years combined.

The accelerated rate of solar is likely to continue rising, with expectations for solar capacity to exceed 25GW by 2025. Carbon Brief also emphasised the decline in demand reduction as a major influence on low carbon generation in 2023. The organisation highlighted that demand dropped by over 20% and speculated that this was due to the UK moving towards a predominantly service-led economy and the implications of high wholesale gas prices. These factors have contributed to the UK generating the lowest-carbon electricity mix since records began.

Despite a positive decline in the dependence on fossil fuels, Carbon Brief warned that current figures are still some way off the government’s target for 95% low electricity by 2030 and achieving a fully decarbonised grid by 2035.

Recent studies suggest that over half of executives believe their efforts to make business regenerative aren’t working effectively. Companies are under mounting pressure to adapt their focus from being resilient to becoming regenerative from their customers, but only a little over 40% are operating in this manner.

Climate action is considered a top priority for all companies and governments worldwide. Critical sustainability measures, like diverting our dependence on fossil fuels toward renewables and waste reduction, all intend to create less impact. However, as customers continue demanding more from businesses in terms of taking effective climate action, polluting less and minimising their impact on the environment isn’t necessarily considered enough.

The core of regenerative business is doing more good, rather than controlling the impact of your actions. A regenerative company focuses on implementing considerate measures to strengthen its socio-ecological impact by regenerating the health and wellbeing of people, communities and the planet.

The problem is while many businesses already believe they are prioritising sustainability, many struggle to convert ideas into decisive action. Research suggests it is a similar case of companies pursuing a regenerative business model.

A study by Kearney of 800 executives worldwide showed that, while regenerative business is yet to be on the mainstream agenda, nearly every leader interviewed believed that transforming their operations to this format was critical. In the study, 58% of C-suites stated that developing more regenerative business models created an opportunity for their business. A further 60% strongly believe that a regenerative culture delivers confidence and commitment in its employees.

Alex Liu, Managing Partner and Chairman at Kearney explained that the survey results clearly show that companies want to move from a predominant resilient strategy to a regenerative one that focuses on transformation, whether inspiring sustainability in the workplace or integrating innovative technology in business activities. 

A regenerative business model can enable significant change at the heart of an organisation. Businesses must take a holistic approach, explore their offerings and then assess how they can generate maximum value for all stakeholders.

Despite recognising the benefits of a regenerative system, only 43% of C-suite executives reported that they were operating effectively in this manner. Attitudes towards progress differ across the C-Suite. The study suggested while 48% of CEOs worldwide believed their business was very effective at operating regeneratively, 58% of COOs stated that their companies required more progress. In total, 56% of global C-suite executives informed Kearney that their plans to become a regenerative business were not working.

According to Kearney, some industries were performing more effectively, such as the retail sector, where many businesses are utilising technology to minimise the waste of energy and resources. The energy industry is also adopting a regenerative approach to sustainability, with 46% of C-suite executives stating that they are already operating efficiently in a regenerative manner.

Looking to the future, companies adopting regenerative strategies could learn from these other organisations. Aside from adapting the supply chain, energy executives believe one of the main opportunities for regeneration is systematic changes to the business model and applying a more holistic and responsible attitude towards analytics.

Becoming regenerative goes beyond restructuring and alleviating the challenges faced in business. Any plan should consider the long-term success of an organisation, enable knowledge sharing and allow for value-added processes. Companies must expand on their strengths and find new opportunities for development and progress in the future. Resilience was the priority in the last few years, but today, we must adapt towards regenerative.

 

A combination of technological, economic, regulatory and geopolitical powers has transformed the global energy market. The challenge of managing energy security and future decarbonisation plans is creating an uncertain future concerning the energy industry. The energy industry is now facing several risks and opportunities. The rising pressure of climate change and reducing emissions is accelerating the transition towards a clean energy future.

Many nations and businesses are raising their commitments to net zero. Emerging organisations focusing on clean energy are leading the disruption to conventional business models and making long-term changes to these markets. However, the revival in demand for energy after the pandemic, combined with supply issues, has highlighted the extent of the challenge in achieving our climate goals. The search for secure, sustainable and affordable energy will remain a top priority worldwide.

 

How leaders can drive progress in the changing energy market

The rise of new challenges and opportunities must be managed by corporate leaders, from emerging organisations to more established energy businesses, maintaining traditional and new business models, varying risks and their cultures. Many factors that will determine progress and success in today’s energy industry have changed from previous years. New demands on leaders are likely to occur, and creating an agile approach to leadership will be needed for businesses, both big and small. 

Overall, businesses and their leader must be capable of working at an accelerated pace and more creatively. Leaders may have to explore new ways of collaborating within their organisation and with new emerging energy systems. A challenge is attracting and retaining talent at a time when the energy industry is under scrutiny and mourning public pressure.

McKinsey recently talked with several C-Suite executives in the energy industry to gain an understanding of the leadership traits required to succeed in the new energy transition. 

The results indicated a general agreement that leaders today recognise the importance of emerging leadership qualities and mindsets to progress in the future energy market while also recognising the importance of traditional leadership qualities. 

Regarding emerging qualities, many leaders indicated the importance of meeting stakeholder expectations, especially with the rising pressure on energy businesses beyond delivering value for vested shareholders. There is also a belief that leaders must be capable of operating within reduced decision cycles and willing to try new approaches and take advantage of market change and other emerging opportunities. 

Changing the mindset and embracing a more emerging leadership role can be difficult for leaders who follow a more traditional path. There are new opportunities that come with this approach. There is enthusiasm among many leaders about displaying greater purpose in their organisation, supporting employee empowerment and working with more agility and innovation. 

 

What is needed to enable this leadership transformation?

 

Defining your direction

The purpose of any business is to deliver value for its stakeholders. With more information and supporting technology available, leaders feel more empowered to understand how their business can add value to customers, investors and other stakeholders. While profit remains a priority, we must look equally, at how their organisation will benefit society.

The energy industry, in particular, is well aware of its need to broaden its value-added solution. From a leadership perspective, the traditional leaders broadly focused on engineering, finance and accountancy, but today require collaborators and those who can work closely with people. 

Focusing on purpose reinforces the identity of a business and represents what it stands for. Companies looking to the future appreciate that purpose will help attract and retain talent, and investors recognise why this is valuable and will carefully consider purpose in their decisions. Leadership transformation will help position an organisation and its culture to tackle new challenges.

 

Reshaping value

Business leaders looking to succeed in the new business world may need to rethink their growth mindset by exploring new opportunities and working with other customers and stakeholders to deliver solutions that lead to new products and services. Leaders must be willing to collaborate with other external organisations and explore mutually beneficial opportunities. 

There are several existing and new challenges emerging in the energy market, and this all requires a new way of thinking and action. It can be hard to move away from traditional business processes, especially those that aren’t familiar. Many leaders, however, recognise that this agility and innovation will lead to future success. 

Both the old and the new require consideration in the energy transition. Profit remains a priority, but leaders must be willing to explore new markets and technologies to enable further success. 

 

Collaboration is critical

To maintain progress, energy companies and their leaders should embrace their position to ensure people feel connected. The power of trust and cohesion is increasingly important in building a resilient organisation. When employees and leaders trust one another, they will be more engaged and willing to work together.

 

Achieving the necessary work

Energy businesses operate in a disruptive and volatile environment where opportunities and challenges emerge consistently. As energy markets and policies evolve, companies must focus on the future while maintaining business stability and progress. 

Success leaders have traditionally focused on planning and control via comprehensive analysis while minimising possible disruption. Today, leaders must become more willing to work within shorter, rapid cycles, which requires focusing on accelerated, low-risk decisions and scaling the ones that succeed. 

In a market where it is becoming more challenging to drive revenue, a structured and agile approach creates opportunities. Energy leaders must become creative and act as entrepreneurs. A traditional, slow and considerate strategy doesn’t necessarily work in the new energy space.

Other leaders have emphasised the importance of enabling more employees to make decisions at various levels, empowering people to determine and make decisions without liaising with their managers. Many leaders emphasise the necessity to take risks to succeed in the emerging energy industry. Energy industry leaders may increasingly need to balance their focus between existing activities and new opportunities. 

Acting as a person and a leader

Tackling the future challenges and harnessing opportunities will require the best talent available. As traditional business models change, companies must retain their core workforce while attracting new talent. Talent competition is rising, and individuals are seeking more than financial compensation in employment. Offering an attractive option for the best talent requires an inclusive employee experience. 

Leaders at all levels play a vital role in creating an environment where individuals can feel valued and empowered to balance work and their personal lives. Since the pandemic, leaders have been forced to become more authentic, which remains a critical element in future leadership. It resonates with the previous discussion on flexibility in leadership and being capable of adapting business plans when necessary. The same level of flexibility applies to employees, and those who need to adjust to these conditions could gain out on the best talent available.

These adaptations in mindset and behaviours could create a more innovative and powerful type of leadership. Once leaders determine the culture they want to build, they can focus on attracting the right talent to support values and accelerate performance. This stage of transformation, however, comes with challenges and changing current operational systems will inevitably result in some disruption and resistance. 

It’s a challenging but exciting period for the energy industry. Meeting the sector goals will require incorporating many of the leadership qualities mentioned. People recognise the challenges and are beginning to be inspired and adapt and rethink their leadership qualities.