Energy & Sustainability Insights

In April of 2020, we released our Corporate Energy & Sustainability Progress Report. Our 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. Knowing full well that the impact of the global health crisis could affect the outcome of our research, we decided to continue with the publication of our report despite these extraordinary circumstances. We recognize that as the world begins to recover, the work of energy and sustainability professionals will be more important than ever.

Despite the far-ranging social and economic ramifications of the pandemic, we have been encouraged to see that the findings from our original research have remained relevant, and in some cases more so than before. For instance, the first takeaway from our research, Energy Management Rises in the Ranks, has become more true than ever as corporate energy teams rose to the occasion during COVID-19 disruptions to identify critical cost savings opportunities for their organizations.

However, we still find it important to take the pulse of the industry in this changed world companies are now navigating. To understand the impact that COVID-19 has had on corporate energy and sustainability programs, we surveyed energy and sustainability professionals to create an addendum to our report.

Here are the results.

1. Companies are not slowing down on their energy and sustainability goals

Perhaps the most promising result of our survey is that respondents told us—loud and clear—that they are not taking their foot off the gas when it comes to energy and sustainability goals. In fact, when asked to compare how confident they were in meeting their goals before the pandemic and now, respondents demonstrated increased confidence even in a COVID-disrupted world. Not only did the number of respondents who were confident, very confident or extremely confident increase by 5% (82% before pandemic to 87% now) but the number of respondents who were not at all confident in their goals decreased to zero.

Furthermore, almost a quarter of respondents said they are using this opportunity to accelerate progress toward their goals, which could help explain the increase in confidence levels.

2. Many organizations are prioritizing sustainability in their return to operations

We were curious to hear what businesses saw as their role in society’s recovery from COVID-19. From providing sustainable goods and services, to using decarbonization to kickstart the economy, to keeping the long-term vision of climate protection intact, respondents surprised us with how integral they felt sustainability is in their plans to come back stronger from the pandemic. Their responses indicate that companies are taking creative and diverse measures to embed sustainability principles in their organizations as they rebuild and recalibrate their strategies.

To quantify this sentiment, we also asked respondents if they were considering using energy and/or sustainability programs to build resilience post-pandemic. The overwhelming majority (89%) said yes. This is backed up by the types of strategies companies say they are pursuing after having experienced COVID-related disruption. In addition to the strategies you’d expect companies to pursue, like regular remote work options and reduced air travel on a regular basis, respondents are also looking at new energy and sustainability initiatives. Proactive crisis planning, efficiency/healthy buildings, digital solutions for energy and sustainability, renewable energy, and adapting business models, goods or services to be more circular also made the top of the list. 

3. There may be a delta between sustainability ambition and financial constraints

When asked if they anticipated financial constraints in pursuit of energy and/or sustainability initiatives, 45% of respondents said yes, and another 33% said they were not sure yet. It is logical that companies have many competing priorities right now, with business continuity being the center of focus for many organizations. But when compared to their confidence in meeting energy and sustainability goals, the pervasive uncertainty among respondents when it comes to funding is perplexing. If companies are even more confident than before in their energy and sustainability goals, then how do they plan to fund the initiatives they need to get them there?

We anticipate the funding hurdle to continue to be a challenge as access to traditional financing mechanisms becomes increasingly competitive. When compared to how respondents said they typically fund energy and sustainability projects before the pandemic, intent to use CapEx or OpEx as standalone finance vehicles dropped dramatically. Before the pandemic, 40% of respondents planned on using CapEx and 23% planned on using OpEx, whereas in our addendum survey, these numbers dropped to 12% and 9% respectively. Companies with ambitious goals will need to think innovatively when it comes to building business models and funding methods that will enable them to make sustainable investments.

Although the full impacts of the pandemic on energy and sustainability programs are not entirely clear, one thing is certain: corporate sustainability is not going away. Companies have reached a tipping point where strategic energy management and sustainability are top-level priorities; customers, employees, and investors are demanding it, and CEOs realize the long-term advantage of running business sustainably. Now the work begins to bridge the gap between increasingly ambitious corporate energy and sustainability goals and the financial strains organizations around the world are feeling.