KPMG's CEO Report: AI, Net Zero & Sustainable Energy Growth

Energy, natural resources and chemicals (ENRC) leaders are betting on AI to cut emissions, boost efficiency and steady growth in a volatile market, according to KPMG’s 2025 Global ENRC CEO Outlook. 

Confidence in the sector’s mid-term prospects has risen to 84%, up from 72% last year, even as geopolitics, inflation and regulation continue to change.

The report also found that supply chain resilience, AI integration and the growing impact of climate and environmental risks are the top challenges that influence short-term decisions.

Is CEO confidence changing?

Executives point to persistent demand for both fossil fuels and renewables, plus innovation in storage, smart grids and carbon capture, as reasons for the uplift. 

Although 78% are positive about their own company’s growth prospects, this represents a slight decline from the 2024 figure of 82%.

The report states that “84% of CEOs are confident in industry growth compared to 72% last year (2024).”

“In uncertain times, ENRC companies are looking to balance growth with cost efficiency, satisfying rising energy demand whilst managing the transition to cleaner energy resources,” says Anish De, Global Head of Energy, Natural Resources and Chemicals, KPMG International, in the report.

“In uncertain times, ENRC companies are looking to balance growth with cost efficiency, satisfying rising energy demand whilst managing the transition to cleaner energy resources,” says Anish De Global Head of Energy, Natural Resources and Chemicals, KPMG International in the report

Over the next three years, ENRC firms appear to be reassessing their merger and acquisition (M&A) strategies, shifting towards more targeted deals. 

“Just 36% of CEOs expect to pursue ‘high-impact’ acquisitions in 2025, down from 58% in 2024, while 55% anticipate ‘moderate’ deal activity, a rise from 38% last year,” the report says.

AI powered innovation

AI has shifted from experimentation to core strategy.

When it comes to AI, companies should design a suitable governance framework over how they use AI agents and data, to ensure they stay aligned with ethics and international law,” says Gillian Morris, Lead of Global Chemicals, KPMG International, in the report.

KPMG’s data shows that 65% of CEOs now rank generative AI as a top investment area, a 12% increase from last year.

The data also shows that 72% of CEOs plan to allocate 10–20% of budgets to AI in the next 12 months. 

AI is fundamentally reshaping the oil and gas sector by unlocking transformative gains in productivity, accuracy and efficiency across both core operations and enterprise functions,” says Shreyansh Upadhyay, Lead of Global AI for ENRC, KPMG International, in the report.

“From optimising drilling and reservoir performance to maximising profitability in refining and renewable assets and streamlining supply chains and finance, AI empowers faster, data-driven decisions that reduce risk and drive sustainable value. 

“It’s not just automation, it’s the foundation for smarter, more agile and future-ready operations.” 

In the report it is found that 66% of CEOs expect returns from AI investments within 1-3 years, rising from 15% in 2024.

The report states, “the shift from GenAI to Agentic AI is accelerating digital transformation, with more than half (51%) of ENRC CEOs expecting Agentic AI to have a significant or transformational impact, notably in operational and workforce efficiency.”

CEOs are recognising that they need to “keep pace with AI” while also recognising barriers such as:

• Ethics concerns: 55%
• Fragmented data systems: 49%
• Regulatory complexity: 47%.

“Geopolitics has a major influence on ENRC companies, who must navigate varying regulatory environments around the world, with differing appetites for the energy transition,” says Jonathon Peacock, Lead of Global Oil and Gas, KPMG International, in the report.

“CEOs need to balance investment in fossil fuels and renewables and keep projects economic throughout their life cycle.”

ESG and net zero focus

Sustainability has moved from responsibility to strategy. 

KPMG’s data shows that 72% of CEOs say that sustainability is embedded in their corporate strategy.

“Energy and the energy transition remain absolutely critical to the sustainability and climate agenda,” says Mike Hayes, Lead of Global Climate Change, Decarbonisation and Renewables, KPMG International, in the report.

“Access to renewable electricity, in particular to help meet growing data centre demand, requires significant upgrades of grids and an easing of permitting in regions like Europe to get projects off the ground. 

“This calls for collaboration between corporates and government.” 

The report says that 62% of CEOs are confident in meeting 2030 net zero targets however more than half admit that their ESG strategies lag behind stakeholder expectations.

More than 4 out of 5 CEOs (82%) believe that AI can support emission reductions and optimised energy use.

Roughly 74% of CEOs believe that AI can boost climate risk analytics to better model future scenarios.

AI is becoming the operating system of the energy transition, from real-time grid balancing and demand management to predictive maintenance and better disclosure. 

The challenge is stitching together secure, high-quality data, closing capability gaps and strengthening ESG governance so AI drives measurable outcomes, not just pilots.

Interested in learning more about this topic? Join us at Sustainability LIVE: The Net Zero Summit in London on 4-5 March 2026 for in-depth discussions with leading sustainability experts. Secure your ticket now and save over £200.