When it comes to building a resilient energy transition, an understanding of where we’ve been guides us to where we need to go. 

We’ve reached a milestone in the energy transition. Nearly 200 countries have signed on to the Paris Agreement. Companies around the world, including some in the oil and gas (O&G) industry, have set ambitious goals to reduce their carbon footprints and reliance on fossil fuels. Investors, for their part, have started to reward such companies—and punish those that drag their feet.  

For O&G companies, the decarbonization imperative has increasingly become a boardroom issue. Unfortunately, many companies are still procrastinating. They fret that they will move too fast, too slow or in the wrong direction. Amid this inertia, they continue to placate regulators, investors and consumers with promises of future action. Some industry leaders, however, have taken a bolder approach. For them, the past decade has been one of planning. Considering options. Setting ambitions. Identifying opportunities to retain their relevance—and profitability—to 2050 and beyond. They have used the last 10 years to prepare for the energy transition. The next 10 years will be about acting on the urgency of the shift. 

Ambitions + Actions = A Successful Energy Transition  

The good news is that all the prep work and, yes, soul searching, that has gone on in c-suites and political halls of power have paid off. We have better insights into what the transition needs to accomplish. We have a greater appreciation of the risks and rewards that lie ahead. And, importantly, we have guides to help navigate the complexities and challenges of the energy transition in the years ahead.  

One of these guides was recently published by the World Economic Forum (WEF), in coordination with Accenture. The 2021 edition of Fostering Effective Energy Transition marked the 10th anniversary of the WEF’s benchmarking of countries on their energy transition progress and energy systems’ performance. Strides have been made in all areas of the Energy Transition Index (ETI). For example:  

  • Aggregate ETI scores rose over the past decade, with the largest gains reported by countries with rising energy demand—namely, China, India and Sub-Saharan Africa. Yet only 10 percent of the 115 countries indexed were able to register consistent gains over that timeframe.  
  • Energy access and security have improved in 70 percent of countries, although the reliability of electricity services is still an issue in many areas.  
  • Strong gains were made in measures of environmental sustainability, as evidenced by a drop in global average energy intensity of 15 percent between 2010 and 2018. But progress is uneven and remains insufficient. 

Building on this momentum is critical, and while open questions remain, the WEF report identifies three imperatives that must be addressed by stakeholders moving forward: delivering a just transition for all; accelerating electrification and the move to renewables; and doubling down on public-private sector collaboration. These imperatives—which apply to O&G companies as much as they do to governmental bodies and investors—are critical for assuring the transition’s success.   

Another guide, Accenture’s Decarbonizing Energy: From A to Zero, defines the opportunity, and challenges ahead for the O&G industryIt proposes three future business models, or archetypes, to which today’s O&G companies should aspire. These include: Oil and Gas Specialists, which will sustain and grow value from a decarbonized O&G value chain; Energy Majors, which build or add clean energy businesses to existing O&G assets over time; and Low-Carbon Solutions Leaders, which will exit O&G and refocus, instead, on leading in one or more clean areas of the energy system. 

Our report also highlights the three sets of actions O&G companies need to take to achieve their 2050 ambitions. These include:  

  • Cleaning the Core  activities, which minimize emissions and maximize efficiency from current operations and value chains.  
  • Accelerating the Transition  actions, which replace existing sources of energy and demand with cleaner alternatives.  
  • Extending the Frontier  actions, which focus on adopting and scaling new energy sources, processes and technologies.  

Ultimately, the success of the energy transition requires O&G companies to activate all three action sets. Reducing the industry’s carbon intensity is needed first—not just to achieve short-term objectives, but also provide a foundation for longer-term structural shifts.   

Finally, the report describes why (and how) O&G companies must orchestrate actions in hydrocarbon-burning sectors. Our research has found that up to 25 percent of potential emissions reductions achievable through 2050 are dependent on collaboration between energy suppliers and their customers. Four sectors—power, transportation, heavy industry and buildings—will drive most of the projected rise in emissions. These are the industries that O&G companies must target and influence. That means more than investing. It means innovating and collaborating with them to make the transition to a low- or no-emission future a reality. 

The path of most resilience  

The WEF and Accenture reports converge on a central theme. It is resilience. As we enter our second decade of preparation and action, it is clear that the energy transition is still quite vulnerable to setbacks. We must be vigilant. And we must work together—industry and governments—to make the transition unstoppable.  

Consider the area of innovation. Within the O&G industry, the ability to build and scale low-carbon technologies will be game-changing. But pursuing innovation doesn’t occur in a vacuum. Innovations are most often developed in response to changing consumer expectations. They rely on having the right insights into changing consumer behaviors and the right policies to drive demand coupled with the right products and services. Industry leaders have the technical expertise, but governments and regulatory bodies dictate what companies can do, which business models they can adopt, and where their investments should be directed.  

Innovation risks are just one threat to the energy transition. There are many others, including market reforms, cybersecurity, cross-border infrastructures and urbanization, to name just a few. It is time for government bodies and O&G companies to come together to mitigate these threats and bolster the transition’s resilience.  

Public-private partnerships to fortify innovation will become increasingly important. So will common frameworks that allow business leaders and policymakers to concurrently evaluate the economic, environmental and social outcomes of potential energy solutions. One of these—the System Value Framework, which was developed by the WEF, Accenture and 30+ CEOs of global energy companies—shifts the political and commercial focus of new energy solutions beyond cost to include 12 value-creation dimensions such as air quality, reliability and investment competitiveness. A 360° value approach, such as the one adopted by Accenture recently, ensures that performance is evaluated on multiple dimensions, not just financial.  

The bottom line is that we are far enough along in the energy transition to have strong hypotheses about what solutions are necessary and viable. Governments and industry leaders, alike, have formulated plans and taken actions to move the transition forward. They now can—and must—learn from each other. Policymakers, O&G players, and even consumers all have a part to play in delivering a resilient energy transition—one that not only ensures long-term sustainability, but also makes inclusive growth and prosperity possible, if not probable.   

It’s time to share our insights and expertise. The coming decade of action demands nothing less.  

Disclaimer: The views and opinions expressed in this document are meant to stimulate thought and discussion. As each business has unique requirements and objectives, these ideas should not be viewed as professional advice with respect to the business.  


Muqsit Ashraf

Senior Managing Director, Lead – Energy Industry Sector

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