Summary of our 2020 Corporate Energy & Sustainability Progress Report
Progress on energy and sustainability was at an all-time high in 2019. How will that momentum fare in a new decade—and under radical new circumstances?
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Executive Summary
It is a pivotal moment for energy and sustainability as we enter the “Decade of Action”—so declared by the UN Secretary General.
To achieve the goals set out by hundreds of global organizations will require bold steps to reduce emissions and operate more sustainably. In this report, we examine the issues at hand and consider how the business community can and should act.
We’ve made massive collective progress on energy and sustainability in the past 10 years, and stand poised to go even farther in the new decade. In our report, we seek to make sense of the current trends and what must transpire to maintain momentum, and preview the changes that we believe are yet to come.
Our findings build on the results of our two previous reports (find 2018 here and 2019 here), and explore compelling conclusions in the areas of energy management, digital innovation, climate action, goal-setting and confidence, and fresh financing mechanisms.
Our original research was conducted in the fall of 2019, at a time when none of us could anticipate that the publication of this report would overlap with the proliferation of COVID-19.
To understand the effect that COVID-19 has had on corporate energy and sustainability programs, we surveyed industry professionals to create an addendum to our report. For an updated look at the impacts of COVID-19, please see our COVID-19 Addendum: 2020 Corporate Energy and Sustainability Progress Report.
About our 2020 Energy & Sustainability Progress Report.
Its purpose is to provide high-level insights into global energy and sustainability trends with the goal of supporting organizations on their journey to Active Energy Management.
For the third year in a row, we partnered with GreenBiz to survey the opinions of 265 global energy and sustainability professionals from corporations earning more than $250M in annual revenue and spanning 17 different industry segments. Respondents to the survey ranged from individual contributors to C-level executives representing multinational businesses.
Survey respondents were primarily located in North America (69%), Europe (21%), and Asia (7%), with operational sites all over the world.
Finding 1: Energy management rises in the ranks
Growing market complexity is demanding greater strategy and innovation from traditional corporate energy managers.
In 2020, energy managers find themselves core to business operations, with expanding responsibilities and regular interface with the C-suite.
An overwhelming 87% of respondents to our survey agreed that the changes in energy markets have led energy management to rise in the ranks as a core business operation. Today’s increasingly volatile global energy landscape means strategic energy sourcing is more important than ever. The difference between the right energy purchase and the wrong one could translate into millions of dollars.
Fewer than half of our respondents say their organization is prepared to respond to greater innovations in energy management, like autonomous grids. As the energy evolution continues, organizations with dedicated energy management roles will be able to capitalize on both the growth of new technologies as well as the increased convergence between conventional and renewable resources.
From shop floor to top floor, energy managers have become more visible within their organizations and more critical to business success.
“Over the last two years, we’ve developed a much more structured approach in terms of energy. Now we’re asking, ‘What is the opportunity for the future?’
- Multinational Pharmaceutical Corporation
Finding 2: Digital innovations ease market complexity
Complexity in energy management is driven, in part, by the mountains of energy and sustainability data that our survey respondents say they must manage.
The vast majority (86%) of respondents agreed that the high volume of data is impacting their energy and sustainability programs.
Respondents using advanced data management solutions and connected devices said that these tools make it easier to manage complexity. The number of respondents using IoT has doubled over last year’s survey results, jumping from just 18% in our 2019 report to nearly 37% in 2020.
“We’re seeing a rapid uptake in digital tools to manage our energy. Right now, we’re introducing smart facroty technology at one of our plants.”
- American Manufacturer
But data alone does not drive outcomes.
When paired collectively with human intelligence, data derived from connected and emerging technologies can radically impact resource management. Our survey respondents recognize this growing advantage. 48% report that they are adapting their energy or sustainability data management programs based on growth in connected devices and 24% say the same when it comes to growth in artificial intelligence.
Finding 3: Climate change tops the corporate agenda – or does it?
All categories of stakeholders are pushing organizations to lead when it comes to climate-related risks.
The momentum in 2019 was undeniable, with a record number of companies making commitments to climate action.The environment and climate change are top of mind. Respondents to our survey ranked environmental concerns as the top driver for energy and sustainability initiatives (51.5%) and climate change as the top risk to energy and resource supply (58%). Further, in the World Economic Forum’s (WEF) latest long-term risks report, for the first time in its 14-year history, the top 5 risks are all climate change-related.
From the data in our survey and the qualitative evidence, climate change appears to have cemented its place at the top of the corporate agenda.
“In the early ‘90s it was all about persuading senior management that environmental sustainability was critical and that we needed to set these goals. Over time, sustainability has finally become – or, is now – resonating in the C-suite; senior management is now demanding this.”
- Global Beauty Products Company
But has it?
The results of the annual Global CEO Survey from PricewaterhouseCoopers (PWC) released in the same week as WEF’s risks report appears to contradict both of ours and WEF’s findings. For the second year in a row, climate change/environmental issues did not rate in the top 10 business risks according to chief executives.
PWC’s report may point to an underlying skepticism and reluctance among executives when it comes to the actual benefits of climate action. The underlying question is: can any business afford to be shortsighted when it comes to climate change risk?
Finding 4: With commitments comes confidence
Setting energy and sustainability goals is nothing new – but goals are becoming increasingly ambitious.
In past years, we examined what goals 
companies are setting and if they choose to make them public. This year, we took it a step further to assess how confident companies are that they can achieve their goals—and that those achievements will make a difference.
Most respondents that have set goals feel confident (50%), very confident (17%), or extremely confident (15%) they will meet them. However, for many, that confidence didn’t translate into optimism that their goals were ambitious enough to affect global warming. 34% of respondents were less than confident that their goals would be effective against the 1.5-degree threshold, 14% were not at all confident.
“We want to be able to set targets that can help us solve for this crisis. But we also don’t want to set something that we can’t potentially hit.”
- Internet Cloud Computing Company
However, we discovered an intriguing trend among a subset of our respondents that deviates from the norm.
Those who shared that their organizations have increased their goals over those originally set feel both more confident that they will meet their goals, and more confident that those goals will contribute to meeting the 1.5-degree threshold. These results were amplified even further if respondents had announced their goals publicly.
This implies that the more ambitious and transparent the energy and sustainability goals, the more confident professionals across the organization are about meeting them and that they will be effective.
Finding 5: Fresh funding mechanisms unlock opportunities
Setting and meeting goals is only one potential result when it comes to the value of confidence.
We found that there was a relationship between confidence in meeting goals and the mechanisms used to fund energy and sustainability projects—the levers companies pull to reach their goals.
Specifically, respondents with higher confidence in meeting their goals are more
likely to use innovative mechanisms, such as energy-as-a-service and energy/green bonds, to fund energy and sustainability projects. Respondents that are investing in the use of energy/green bonds are also increasing their goals more than any other participants.
Despite their effectiveness, innovative funding mechanisms have relatively low adoption rates, with only 26.5% of respondents agreeing that innovative funding contributes most to their energy and sustainability programs getting funded and approved.
Our suspicion is that tried-and-true traditional funding models likely impede energy and sustainability progress because they inhibit the ability or desire to unlock new financial means. Innovative approaches have the potential to unlock funding sources outside of traditional CapEx/OpEx, which is, by definition, limited.
“Most people think financial barriers are the biggest hurdle to get a project started. And that can be true, but often the bigger hurdles are with time and risk. The financial problem really comes down to competing priorities for capital and balancing the opportunity cost.”
- Sparkfund