- 40% of respondents believe believed strong public sector leadership is crucial to achieving the energy transition
- 25% or respondents believe for COP26 to be a success legally binding net zero commitments in international law would be required
- 20% believed energy consumers should bear the costs of energy transition
- 73% expected the shape of their organization to change as a result of carbon factors
According to research from leading global law firm Baker McKenzie and Reuters Events launched today, 81% of respondents believe Carbon Capture Utilization & Storage (CCUS) are the crucial technologies to help drive to low carbon energy sources. The European Energy Transition Industry Insight Report also highlights that an international price for carbon will be a key requirement in enforcing change and that organization shape change, whether through M&A, divestiture or reorganization is anticipated across the region.
Surveying over 400 executive decision makers within the energy transition community and engaged on a range of energy, environmental, social and corporate governance issues, the report explores what corporate leaders think of Europe’s energy transition efforts and the strategies they are employing to deliver on their net zero ambitions.
Richard Blunt, partner and head of Baker McKenzie’s EMEA Corporate Energy, Mining and Infrastructure practice commented, “With COP26 taking place in Glasgow this week, this is the year when the governments are expected to step up their commitments to tackling climate change. Countries have been setting goals for net zero greenhouse gas emissions by 2050s, and intermediate objectives for cuts by the 2030s. The energy transition plays a fundamental part in achieving net zero. The focus for this survey is to ask: How does this play out thought at the corporate level and how far along are companies to delivering on these goals?”
Our research indicates that corporate leaders face a diverse risk landscape when confronting the energy transition, with changes in regulation representing the largest single area of threat. For European policymakers seeking to determine a path to a low carbon economy at COP26, the message is clear: companies are willing to do their bit but could be greatly helped by the removal of regulatory risk to their operations.
While the need to reach net zero is widely understood, the pathway to get there remains uncertain. The survey respondents selected a variety of potential solutions to the energy transition problem, with technology favored by just over a quarter of those surveyed. Almost one in five, meanwhile, felt it will be important to develop new business models, while 16 percent looked to regulation and governance for solutions. Notably, getting finance was seen as the least important factor in overcoming energy transition challenges.
Blunt continued, “The transition to a carbon-neutral economy is a seismic shift on a global scale, leaving no sector untouched. The urgent strategic, operational and reputational challenges are considerable, but so are the opportunities for growth.”
Baker McKenzie’s multidisciplinary global team helps energy producers, investors and users forge their energy transition journey in an increasingly complex regulatory environment and enables them to transform, powerfully.