Bain & Co Asks: Is it Possible to Achieve Net Zero by 2050?

Bain & Company have found that many industry leaders are sceptical about achieving 2050 net zero targets – partly due to investment challenges

In a recent survey conducted by Bain & Company, a significant portion of energy industry executives voiced doubts regarding the achievability of 2050 net zero targets.

The Energy and Natural Resource Executive Survey reveals that almost two-thirds anticipate that global net zero objectives will not be met until 2060 or beyond. This marks a significant shift in sentiment, with 54% expressing similar doubts in the 2023 survey.

“The energy transition looks slower as it becomes even more difficult to ensure adequate investment returns and progress diverges across a fragmenting world,” says Grant Dougans, Partner at Bain & Co, summarising the report. 

“This year’s survey found that energy and natural resource (ENR) companies haven’t dampened ambitions for their transition-oriented growth businesses. However, customers’ willingness to pay is a growing issue, as is the ability to generate adequate return on investment in energy transition-orientated projects. As a result, companies are focusing on projects with a viable ROI path.”

Among the identified barriers to achieving net zero targets, a prominent concern is the lack of sufficient returns on investment in sustainability initiatives. The report highlights the challenge faced by energy and natural resource companies in scaling up transition-orientated businesses due to customers' reluctance to pay higher prices.

The expected net-zero timeline is shifting later

The landscape of sustainable energy has undergone significant changes in recent years. In response to consumer and shareholder demands for portfolio diversification and sustainability, the mining industry has witnessed a notable shift. A quarter of the top 20 mergers and acquisitions deals in 2022 were driven by these demands, indicating a growing focus on projects with viable paths to return on investment.

Regional attitudes to net zero

The survey reveals divergent perspectives across regions regarding the transition to renewable energy sources. 

Executives in the Middle East, Asia-Pacific and Latin America display greater optimism regarding renewables, hydrogen, bio-based products and transition commodities. In contrast, executives in Europe and North America exhibit more cautious attitudes, with varying levels of optimism about the profitability of transition projects.

These regional variations in attitudes towards renewables and green investments highlight the complexity of the transition process. As industry leaders navigate these challenges, a sober assessment of practical realities becomes increasingly vital in driving meaningful progress towards a sustainable energy future.

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