Aggreko: CEOs Adjust Net Zero Strategies Amid Challenges
CEOs across major European cities are reassessing their timelines and financial commitments towards achieving net zero objectives, a study by Aggreko reveals.
The analysis, Rebalancing the Energy Transition, indicates a continuing struggle among companies to find a balance between being profitable and sustainable within a fluctuating energy sector.
This struggle is particularly pronounced when trying to align with environmental, social and governance (ESG) standards amidst varying market conditions.
- 95% of surveyed leaders have adjusted their net zero timelines due to energy supply and pricing challenges
- 12% prioritise rapid decarbonisation, the majority focus on reducing energy costs and gaining commercial advantages
- 80% still plan to increase investment into their energy transitions over the next year
The study surveyed 400 CEOs of companies with turnovers exceeding €200m (US$214.62m) across the UK, Germany, France and Italy.
These findings illuminate the persistent yet complex intention among companies to propel energy transitions forward amidst economic pressures.
Challenges in the energy transition
Aggreko's research points out that the backbone of accelerating the energy transition lies within European industry.
The need for heightened sustainability measures, however, is evident if success is to be ensured.
Notably, the majority of the CEOs surveyed — 95% — have altered their net zero timelines due to issues related to energy supply and pricing.
This realignment of objectives underscores the myriad of pressures business leaders face, including cost reduction and gaining commercial advantages, which, for many, outweigh the urgency of decarbonisation.
“In a tough economic landscape, grid instability and connection delays, price uncertainty and looming ESG targets are impacting many businesses’ energy transitions.”
Nevertheless, the determination to enhance investment in energy transitions remains robust, with 80% of the respondents indicating plans to escalate their investments over the next year.
However, the report suggests that most of these investment uplifts are likely to be incremental.
Robert Wells, President of Europe at Aggreko, says of the findings: "It is not surprising that our research has uncovered leaders across Europe are looking for change when it comes to their energy supply chain.
"In a tough economic landscape, grid instability and connection delays, price uncertainty and looming ESG targets are impacting many businesses’ energy transitions
“With appetite for decentralisation and alternative power agreements on the rise, we have launched our report to help leaders understand the market and how it is evolving, in addition to the procurement methods at their disposal.
“Key to this is providing access to solutions that ensure that high energy using industries can remain profitable during their energy transition without compromising on ESG commitments.”
Committing to sustainable strategies
Given the financial constraints, Aggreko’s report underscores the importance of utilising supply chains to meet the timelines and requisites of the energy transition whilst juggling profitability with ESG considerations.
Supporting energy-intensive sectors across Europe with the latest renewable technologies, alternative procurement strategies and expertise forms the crux of Aggreko’s sustainability agenda, dubbed Energising Change.
This initiative aims not only to steer Aggreko’s energy transition but also to facilitate the move towards a renewable energy infrastructure, enabling sectors like manufacturing, construction, data centres, utilities and infrastructure to achieve their Net Zero targets.
Robert adds: We are a strategic supply chain partner to organisations across Europe. Working closely with many customers from energy intensive industries, we have already been working to develop renewable energy developments, establish alternative power agreements and make technologies available for projects imminently.
“Particularly when capital is at a premium, supporting customers with controlling costs and energy supply will remain a key part of ensuring a smooth energy transition.”
Europe is currently experiencing an unprecedented rise in demand for AI and cloud services, exerting significant pressures on its data centre sector.
A report by McKinsey has pointed out that the surging global AI industry might triple EU data centre energy consumption by 2030, with expected growth hitting 35GW in this timeframe.
Leading this demand are hyperscalers, which include major cloud service providers, projected to drive up to 70% of this anticipated growth by 2028.
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