Clean energy investment remains a priority on the business agenda

The requirement to accelerate the shift to clean energy is more important than ever, but defining this next stage of this transition requires careful consideration.  A recent survey from global law organisation Ashurst, explored the opinions of over 2000 senior business leaders and discovered that companies anticipate their investment plans in green energy to progress quickly.

Where is this investment going?

According to the survey, solar represents the most popular investment technology, with over 70% of the respondents already investing or planning to invest in solar energy.

Aside from solar, multiple existing and emerging technologies are receiving significant financial backing. Survey respondents believe that investment in renewable energy will focus on offshore wind (28%), followed by hydroelectricity (26%).

Aside from these two established technologies, there is a belief from business leaders that new and emerging technologies will progress and secure significant investment. Over half believe green fuels will mature and gain additional investment over time. More than 50% anticipate green fuels to mature as a vital technology over the next five years, with 42% expecting a similar scenario with air storage and tidal generation. The survey highlighted that 60% of respondents believed deploying these new technologies was a top priority for their organisation.

Investors are continuing to explore energy transition options beyond energy generation. Aside from systems that support the energy transition, three energy solutions are considered popular investment choices – electric vehicles, battery storage systems and CCUS. There is a genuine drive for renewable energy investment within the G20. Over 80% of survey respondents believe investing in renewables is critical to their business’s strategic growth, with over 60% expecting a shift away from traditional fuels to accelerate over the next year.

 

Who is supporting and driving this investment?

The driving force for this transition is coming from all directions. Businesses have experienced mounting pressure to commit to their energy transition investment plans. Studies emphasise the rising pressure from corporate boards to display clear energy transition plans. Over 70% of respondents said they face mounting pressure to invest in renewable energy and decarbonisation. The figures from the study highlight that the transition to renewables has strong support from the corporate world.

It’s clear that directors, CEOs and other managers are increasingly focusing on the energy transition, and the data shows that investors are equally committed to seeing clear progress. Business leaders are facing growing pressure to adapt their businesses and meet the expectations of their customers and investors.

 

The challenges of the transition

Scaling your organisation: Companies want to invest, but several factors are hindering the scalable efforts of renewable energy investment. In the report, 40% of businesses said they face challenges with their manufacturing capacity, while others highlighted a lack of raw materials, regulations and skills shortages impacting progress.

Disputes: Companies should consider the potential legal implications in the future. Nearly 70% of businesses surveyed anticipate a rise in legal disputes associated with renewable energy in the coming years, with over 40% expecting an increase in disputes connected with ESG factors. 

Despite increasing global challenges and a geopolitical landscape, sustainable energy investment is a corporate priority. While it’s no surprise that businesses forecast a rise in the energy transition investment, it’s unclear about the next stage of the transition. When exploring the targets created by governments, there are significant opportunities for companies willing to take a decisive and strategic approach. It will be these companies that will make considerable progress in achieving their goals.