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Africa|Business|Consulting|Energy|supply-chain|System|Systems|Environmental
Africa|Business|Consulting|Energy|supply-chain|System|Systems|Environmental
africa|business|consulting-company|energy|supply chain|system|systems|environmental

FTI report highlights importance of urgency on energy transition

24th May 2022

By: Tasneem Bulbulia

Senior Contributing Editor Online

     

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This year represents a critical inflection point in the way that energy is perceived, and the global systems needed to find, produce, deliver and decarbonise it, a new report by global business advisory firm FTI Consulting emphasises.

“Significant, era-defining events are happening all around us, all around the world, and all at a breakneck pace – shaping both short- and long-term structural considerations around energy and sustainability,” the company says.

This report captures what some of the largest energy firms in the world are thinking about and planning for as they look at the energy transition, the firm states.

As countries look to shore up domestic energy supply chains and meet increasing demand, the decisions companies make today will reverberate for years – even decades – into the future, FTI says.

Forty-five per cent of energy companies surveyed believe they will face increased pressure to improve on environmental, social and governance (ESG) and sustainability metrics, as compared to 36% of companies from other sectors.

FTI Consulting’s Resilience Barometer data shows that more energy companies struggled to secure finance in the past 12 months compared with other sectors. This could reflect the increasing pressures that companies in the energy sector are facing around financing, FTI posits.

It notes that the entire supply chain will become a source of opportunity and risk. Results from the company’s yearly global survey highlight that 49% of energy companies surveyed plan to conduct reviews of their supply chain and suppliers in the next 12 months in response to anticipated consumer activism.

The report highlights the significant and mounting environmental pressures facing the industry, including the threat of regulatory action and assets becoming stranded before the end of their operational life; pressure from investors and reduced access to capital; and activists leveraging every available tool, from the courts through to the corporate governance system, to influence companies.

“The pressure to improve ESG now outstrips concerns about improving operating performance and increasing market share for energy companies.

“To address ESG scrutiny, businesses need to review their supply chains and suppliers, especially as attention to ESG gains momentum,” says FTI Consulting South Africa senior MD and business transformation head Christo Roux.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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