Energy leaders focus on talent and technology as uncertainty continues

KPMG’s 2021 CEO Outlook finds industry focused on resilience as concerns grow about climate change and talent crisis.

KPMG’s 2021 CEO Outlook finds industry focused on resilience as concerns grow about ...

  • More than a third of energy leaders now view climate risk as the greatest threat to their organization’s growth
  • Almost a third of CEOs view attracting and retaining talent as their top priority
  • Majority of energy CEOs planning to increase investment in innovative technologies

Leaders of the world’s largest energy sector businesses are focusing their investments on talent and technology as the industry faces continued uncertainty from COVID-19 and the climate crisis, according to new research from KPMG.

KPMG’s 2021 CEO Outlook asked 1325 CEOs across different sectors and specifically 133 energy chief executives about their strategies and outlook over a 3-year horizon. The latest survey reveals an industry that remains resilient and focused on long-term, sustainable growth, despite facing an uncertain future and witnessing a period of rapid transition.

With COP26 a matter of weeks away, the latest survey findings reveal energy CEOs are increasingly concerned about both climate risk and an emerging talent crisis within their sector.

Climate risk

Climate change risk continues to be the top threat for energy leaders, with 37% of energy CEOs choosing it as their top risk category as it relates to their organization’s growth. This was substantially higher than any other industry surveyed.

CEO Outlook risk bar graph

Meanwhile, more than half (63%) of CEOs report the lion’s share of demand pressure stemming from investors and regulators for increased reporting and transparency on ESG issues today, and 27% say their top operational priority will be ensuring ESG reporting is integrated into their future measurement and reporting processes. 84% said they want to lock in the sustainability and climate change gains they’ve have made as a result of the crisis.

Nearly half (46%) of the CEOs state their single biggest challenge is crafting their ESG narrative in a compelling fashion and that this is most critical for keeping employees engaged. Over half (56%) report their pay is already tied to ESG performance with 85% indicating the annual bonus as the key mechanism.

CEO Outlook circular percentage graphics

Attracting and retaining talent

The ‘war for talent’ emerged front and center for energy CEOs as a top operational priority, with 29% highlighting attracting and retaining talent as key to achieving their growth objectives over the next three years. Attracting and retaining talent also appears to be driving up recruitment, with 86% of energy leaders planning to increase their headcount over the same period.

Meanwhile, more than a quarter of CEOs believe the greatest benefit of being a diverse and inclusive organization is the ability to attract talent, including Gen Z and millennials – the highest response rate in that category.

The acceleration in new working practices and a greater focus on wellbeing is also driving energy CEOs to think differently about talent, with almost half (43%) focusing on employees’ mental health and wellbeing as the key success factors to ensure employees are engaged, motivated and productive in a world where hybrid working is increasingly common.

Technology and innovation

Another key area of focus for energy leaders is investment in technology and innovation to help unlock long-term growth. 86% of energy CEOs see technological disruption as more of an opportunity than a threat, indicating a strong sense of optimism around tech innovation and the impacts to come.

Collaboration is also playing a key role in driving the industry’s focus with more than half (59%) of CEOs planning to join industry consortia focused on development of innovative technologies and more than a third (37%) looking to collaborate with innovative start-ups such as FinTech, InsurTech or HealthTech firms. Meanwhile, 50% of CEOs are looking to set up their own accelerator or incubator programs.

There also remains a consistent appetite for strategic market activity and investment in new growth opportunities. 26% of industry leaders say M&A will be a part of their strategic objectives over the next three years, while more than a third (31%) of CEOs are exploring strategic alliances with third parties, and a quarter (25%) are considering organic growth options, such as innovation, R&D, capital investments, new product development and recruitment.


Regina Mayor

In a matter of weeks, all eyes will be on Glasgow as the world’s political leaders gather to decide what action should be taken to tackle the vast challenge of decarbonizing the planet. For the energy sector, it means more prolonged uncertainty. The vast majority of the industry’s leaders (79%) believe world leaders must inject the necessary urgency in the climate agenda when they meet for COP26. The industry has taken more than its share of pain throughout the pandemic, with a plunge in demand for oil and profound operational challenges. Many energy businesses have been at the forefront of driving forward the energy transition and they’re fully behind a shift towards a more robust energy mix that sees a larger share of renewable energies. But the potential for significant, bold political action is naturally creating more uncertainty at a time when the sector is working to rebuild and rebound.

The 2021 KPMG CEO Outlook survey reflects this mood. Such a significant rise in the number of leaders viewing environmental risk as the greatest risk to growth reflects the growing unease about what lies ahead. That’s also the case on the talent front. The industry has faced talent and skills shortages before, but there’s a sense that, this time, we may not be able to win the hearts and minds of the talented individuals who have gotten us to where we are today. Nearly a third of CEOs say recruiting and retaining employees is their number one operational priority. Leaders need greater certainty and more consistent, collaborative and global approaches to tackling the challenges ahead.

Despite increased uncertainty, our global energy sector remains resilient and focused on long-term, sustainable growth. The 2021 CEO Outlook survey reveals that 77% of industry leaders are confident about their industry’s growth prospects. While the figure is down from 100% in our Pulse Survey at the start of the year, it remains in positive territory, driven perhaps by greater organizational efficiencies, with more than half (58%) of energy CEOs saying COVID has allowed their organization to better ensure its supply chain is resilient in the event of further global lockdowns or travel restrictions.


Regina Mayor
KPMG’s Global Head of Energy & Natural Resources


Click here to read the Energy & Natural Resources summary from KPMG’s 2021 CEO Outlook.

For media queries, please contact:

Brian O’Neill, Senior Manager, Global External Communications
+44 7823 668 689
Brian.O’Neill@kpmg.co.uk

About KPMG’s CEO Outlook:

The energy & utilities data is a sub-sample of data from KPMG’s CEO Outlook, using survey findings from 133 CEOs working in energy, natural resources and utilities. The KPMG 2021 CEO Outlook asked 1,325 CEOs from among the world’s most influential companies to provide their 3-year outlook on the economic and business landscape, as well the impact that the on-going COVID-19 pandemic will have on their organizations' future. All respondents have annual revenue over US$500M and a third of the companies surveyed have more than US$10B in annual revenue. The survey was conducted June 29 – August 6 and included leaders from 11 key markets (Australia, Canada, China, France, Germany, India, Italy, Japan, Spain, UK and US) and 11 key industry sectors (asset management, automotive, banking, consumer and retail, energy, infrastructure, insurance, life sciences, manufacturing, technology, and telecommunications).

About KPMG International

KPMG is a global organization of independent professional services firms providing Audit, Tax and Advisory services. We operate in 146 countries and territories and in FY20 had close to 227,000 people working in member firms around the world. Each KPMG firm is a legally distinct and separate entity and describes itself as such.

KPMG International Limited is a private English company limited by guarantee. KPMG International Limited and its related entities do not provide services to clients.

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