Energy CEOs bet on emerging technology despite economic risk and skills gap
Energy CEOs remain optimistic about growth, with focus on AI, workforce upskilling, and ESG goals amid global challenges.
Energy CEOs remain optimistic about growth, with focus on AI, workforce upskilling,....
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- 78 percent of CEOs are confident in the economy’s growth over the next three years — similar to findings last year.
- Almost two-thirds view generative AI (Gen AI) to be the top investment priority for their organizations.
- 79 percent believe AI won’t reduce jobs in their organization.
- 58 percent of CEOs expect to achieve net zero by 2030, with 35 percent stating that their greatest barrier to achieving net zero, or similar climate ambitions, is the complexity of decarbonizing supply chains.
Bangkok, 16 December 2024 – CEOs in the energy, natural resources, and chemicals (ENRC) sectors are displaying surprising confidence despite economic uncertainty, geopolitical risks, and evolving technologies, a survey of 120 sector leaders from across the world finds.
The KPMG CEO Outlook, now in its tenth year globally, revealed that 78 percent of CEOs are confident in the economy’s growth over the next three years — similar to findings from last year’s survey. Yet, 55 percent of CEOs believe geopolitical tensions pose the greatest risk to this, followed by economic uncertainty, and the race to embrace AI and other technologies (both at 43 percent).
Gen AI remains firmly on the CEO agenda, with 58 percent stating it will be the top investment priority for their organizations over the next three years. But leaders are taking a cautious and structured approach to avoid risks, while planning significant investment in AI-driven transformation as 65 percent are anticipating that it will take three to five years to see return on their investment in the implementation of Gen AI (compared to 48 percent in 2023). As for the workforce, 79 percent of CEOs believe that these emerging technologies will not significantly impact the number of jobs but will instead require upskilling and redeployment of existing resources within their organization.
Environmental, Social and Governance (ESG) also remains a critical component of business strategy. Fifty-eight percent of CEOs expect to achieve net zero by 2030, but most acknowledge the barriers they face to achieve decarbonization, with 35 percent reporting the complexity of decarbonizing supply chains as the main one. This is followed by a lack of skills and expertise at 22 percent, making investing in talent development, upskilling around AI and new technologies, and strong knowledge transfer processes even more important.
The prevailing mood in the boardroom may be positive for ENRC CEOs, but there is no shortage of issues to test their mettle. AI and ESG are flagged as the two major strategic domains that are seen as both an opportunity and a risk for businesses, and rightly so.
In terms of AI, while there is hardly an area of business where AI can’t bring value, the risks of falling behind and/or making a fatal error in privacy, ethics or integrity have to be managed. CEOs should feel confident about this as long as they have the fundamental guardrails in place. Integrating AI really comes down to change management, and that’s something CEOs have to personally focus on.
As for ESG, while CEOs are embedding it deeper into their businesses, there is a sense that most of what they are doing is compliance driven. There is a cost to ESG, especially around net zero and the deep decarbonization of the supply chain which that requires. But these things will have to be done — and those organizations that move further and faster toward an ESG-led transformation could gain a significant market advantage.
We are at a tipping point. The conditions are aligning for the ENRC organizations that get their strategy right around the key areas of their business – operating footprint, cost model, emerging technology, ESG – to forge ahead and realize even greater commercial returns.
Anish De
Global Head of Energy, Natural Resources, and Chemicals
KPMG International
Global Head of Energy, Natural Resources, and Chemicals
KPMG International
Gen AI and ESG remain firmly on the agenda of the CEOs in the energy, natural resources and chemicals (ENRC) sector. These initiatives can indeed drive long-term value beyond compliance. KPMG’s expertise can assist with this through strategic guidance and the development of operating models that embed ESG into the business, and that adopt a human first approach to Gen AI.
Tidarat Chimluang
Partner, Consulting, Head of Business Transformation and Head of Industrial Markets
KPMG in Thailand
Partner, Consulting, Head of Business Transformation and Head of Industrial Markets
KPMG in Thailand
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About KPMG in Thailand
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