The path to net-zero emissions is delayed
Net zero isn’t happening anytime soon. According to Bain’s latest survey of more than 700 executives across oil and gas, utilities, chemicals, mining, and agribusiness, nearly half of them (44%) expect the world to hit net-zero emissions by 2070 or later. That’s up significantly from previous years when less than a third said the same. Only 32% still believe it’ll happen by 2050.
Last year saw record-breaking global funding in clean energy. What we’re facing is the continued tension between what people want and what physics and infrastructure can currently support. Demand for traditional energy is still strong, especially in developing countries experiencing population and economic growth. At the same time, low-carbon alternatives continue to scale, but not fast enough to fully replace legacy systems.
There’s no mystery here. You can’t shut off legacy operations without alternatives ready to meet rising demand. That’s why we’re seeing this delay in optimism. And executives are becoming more realistic. They’re not going to bet the company on timelines that ignore rising global energy needs or underestimate system complexity.
This shift in mindset speaks directly to a broader reality, it’s hard to decarbonize while scaling up energy delivery. The real challenge is producing cleaner energy faster and doing so while maintaining energy security, reliability, and economic growth. C-suite leaders should evaluate transition strategies in terms of feasibility, capital efficiency, and system integration. Optimism is important. But clarity is essential.
A growing focus on ROI
The energy sector is shifting focus. The era of wide-eyed ESG spending is being replaced by a sharper emphasis on financial returns. Executives are demanding clearer payoff timelines and stronger ROI to justify continued investment in low-carbon technologies. Bain’s 2025 survey confirms this recalibration. Budgets are tightening. Balance sheets are under pressure. And most companies are responding by re-evaluating where their capital dollars go.
The result? Projects related to the energy transition, especially those with vague or delayed revenue streams, are being paused, re-scoped, or shelved altogether. Simultaneously, legacy projects with well-understood payback models are still getting funded. This is a push for financial clarity in uncertain conditions. Executives want proof that new investments in renewables, hydrogen, carbon capture, and similar assets will contribute meaningfully to cash flow or asset value by 2030.
For leadership teams managing multi-billion-dollar portfolios, every percentage point of ROI matters. Decarbonization only scales if it also performs financially at scale. That means developing just cleaner technologies and better business cases. If the economics don’t hold up, expansion stalls. And when capital costs jump, as they have, decision-makers become more selective. Executives evaluating sustainability-linked projects can’t just focus on environmental impact or public relations. They have to anchor decisions around hard numbers, risk mitigation, and speed to value.
Rising capital project costs
Cost escalation is hitting capital projects hard. In Bain’s latest energy and resources executive survey, nearly one-third of companies reported double-digit increases in project costs over the last year. That’s not sustainable, especially in the context of accelerated deployment needs. Companies are being asked to do more, faster, with less slack in their budgets. The result is clear: the traditional approach to capital planning is being reworked.
Energy and natural resources executives are no longer just scaling investment, they’re redesigning how that investment gets executed. Many are planning to double or even triple capital deployment over the next few years, but they know that without better execution, those dollars won’t deliver the needed outcomes. We’re seeing growing interest in procurement changes, faster permitting processes, and modular project designs that reduce lead time and manage risk. A few players are already achieving 15% to 50% improvements in schedule and cost performance through these kinds of changes.
C-suites need to recognize that capital discipline now defines competitiveness. Volume of investment is no longer the differentiator, precision, timing, and efficiency are. The margin for error is shrinking. Project portfolios that can’t meet financial and operational expectations compromise both the balance sheet and strategic flexibility. Teams need to link performance targets to decision cycles, make faster calls on underperforming projects, and leverage new technologies that reduce approval bottlenecks.
Transition-related business optimism has waned
Across the industry, confidence in the profitability of transition-focused business lines is softening. Executives are less certain that these new lines, such as hydrogen, carbon capture, or broad sustainability platforms, will deliver meaningful contributions to profits or company valuations by 2030. That uncertainty is creating hesitation around scaling these units.
But there’s a countertrend worth attention. Some technologies are standing out. Executives remain positive about the commercial potential of renewables, energy storage, and artificial intelligence. These are forming the core of targeted investments backed by stronger business cases. Leaders are focusing on areas where adoption curves are clearer and where returns are more measurable.
For executives making capital allocation decisions, this is the moment to be selective. Not every “green” innovation warrants scale. Some technologies will take longer to mature; others already fit into operational models where they drive clear results. C-suite teams should evaluate each transition investment based on near-term financial impact, scalability, and integration simplicity. The drop in optimism doesn’t reflect disinterest, it reflects sharper analysis, stronger filters, and a growing preference for technologies that plug into real business outcomes now, not just future potential.
Utilities are preparing for an increase in demand
AI is changing how we think about electricity demand. Data centers, already energy intensive, are growing fast, driven by exponential AI deployment. Utilities are already planning for a major increase in load. They’re seeing early signs across regions, with infrastructure demand projected to expand considerably within just a few years.
Utilities aren’t panicking. They’re approaching the problem methodically. The scale of the challenge is clear: if the current trajectory continues, energy consumption from data centers could double by 2027. Executives in the power sector know this isn’t a temporary spike. It’s a durable shift in baseline demand resulting from AI processing, cloud services, and digital infrastructure buildout.
That kind of growth requires decisive action. Utilities are evaluating grid expansion strategies, new generation capacity, and more resilient transmission architectures. They’re also factoring in growing regulatory scrutiny and permitting bottlenecks. Getting this right is about readiness, building the assets needed before bottlenecks hit critical thresholds.
The future of AI adoption depends as much on power infrastructure as it does on compute hardware. Utility executives understand this, and their planning needs to reflect more than load projections. It also means reassessing capital agility, regional energy mix, and cost of delivery. Regulatory relationships, site prioritization, and power sourcing strategies all become executive-level priorities.
Digital transformation has become a strategic imperative
Enterprise systems are now at the center of competitiveness. For years, many companies delayed ERP upgrades, viewing them as large, inconvenient IT undertakings. That period is over. Executives now recognize that legacy ERP systems are limiting business performance, reducing agility, and slowing decision-making. As vendors begin phasing out support for older platforms, replacement is fundamental to staying operationally fit.
In Bain’s 2025 Executive Survey, 62% of industry leaders across sectors said they plan to transform their ERP systems within three years. The reason is straightforward. A modern ERP platform connects forecasting, field operations, finance, and supply chain in real-time. It forms a base layer for AI-driven functions, including predictive maintenance, demand planning, and smart resource allocation.
C-suite leaders are treating ERP transformation as a core business initiative. The right system upgrades unlock efficiency across the entire organization. They also enable faster execution of capital projects, better customer service, and smarter cost control. The competitive gap between companies with strong digital infrastructure and those without is closing fast, and those who fall behind are doing so visibly.
Executives must drive digital alignment across finance, operations, and engineering. Timing matters. Those who delay could find themselves locked into outdated processes just as competitors expand capability and reduce cost through automation. ERP transformation is also foundational to integrating AI tools, without updated workflows and clean data structures, AI output is limited or unreliable. Success needs clear executive sponsorship, phased implementation, and tight coordination between business and IT leaders.
Innovation remains central
There’s no slowdown in complexity. Energy and natural resources companies are facing cost pressure, uncertain transition timelines, and rising demand, but none of that is halting innovation. In fact, many executives are accelerating it. Their focus is on execution that delivers measurable results. Companies are redefining how they deliver capital projects, manage operations, and integrate digital tools.
Some are already seeing significant gains. In the most effective organizations, innovation is producing cost and schedule improvements of 15% to 50%. These reflect structural changes, in procurement, project delivery, and cross-functional collaboration. This kind of innovation is targeted. It’s focused on scaling what works and killing what doesn’t quickly.
At the same time, executives are deploying new technologies with more purpose. Digital capabilities, once treated as optional upgrades, are now core to how businesses run. AI-supported forecasting, predictive maintenance, and field operations automation are active projects. Transformation is applied, not hypothetical.
Leaders shouldn’t confuse transformation with broad disruption. Innovation today means upgrading performance in focused areas with speed and precision. This posture also requires executive alignment, clear direction on priorities, disciplined resource allocation, and accountability on delivery. In a high-pressure environment, innovation that improves how capital is deployed, how people work, and how systems perform sends a clear signal to investors and stakeholders: this leadership team is controlling what it can and preparing for what’s next.
In conclusion
Progress is happening where leadership is focused, precise, and willing to adapt fast. Executives across energy, resources, and infrastructure aren’t waiting around for market stability or perfect conditions. They’re executing transformation now because the cost of delay is rising.
Technology has moved from support function to strategic lever. Transition initiatives are being filtered through ROI logic. Capital deployment is being measured in speed, not just scale. And those leading the shift are the ones building systems that perform under pressure.
Innovation is embedded in how work gets done, how teams make decisions, and how companies move capital. In this environment, leaders who treat uncertainty as permission to rethink their edge will define the next phase of global energy. Not through promises, but through execution that delivers.
