Clean Energy Investments Surge in Natural Resources Sector
Average spending on clean energy technologies across the natural resources industry is expected to climb by over a third in the coming financial year, according to the latest global Clean Energy Survey published by Willis, a WTW business.
While investments in fossil fuels may continue in the short and medium term, natural resources companies have solidified long-term plans for clean energy investments. The survey highlights that businesses are maneuvering through a complex risk landscape, attempting to balance financial, regulatory, and operational priorities. The survey received responses from 450 senior decision-makers from prominent energy and natural resources companies in Europe, North America, Asia-Pacific, and Latin America, offering insights into the industry’s strategic direction concerning clean energy.
All surveyed natural resources companies reported having a clean energy strategy, though implementation levels varied by sector. Among renewable energy companies, 71% stated they are either implementing or have fully implemented their strategies. This percentage contrasts with 36% for oil and gas firms, 63% for power companies, and 43% for mining and metals operations. Clean energy is widely recognized as a growth opportunity, with 63% of respondents expressing optimism about the sector’s potential. This sentiment was consistent across all surveyed industries, including oil and gas companies that are investing in clean energy alongside ongoing fossil fuel activities.
The Transition to Clean Energy
The shift to renewable energy sources—such as solar, wind, hydro, and geothermal—is crucial for achieving net-zero emissions. This transition necessitates reshaping energy production, distribution, storage, and consumption patterns. The International Energy Agency (IEA) has underscored the necessity of decarbonizing the global energy system to limit global warming to 1.5°C. This transformation not only addresses climate change but also enhances energy security and fosters economic growth through the creation of green jobs.
Industry-wide investment in clean energy technologies and infrastructure is projected to increase by an average of 34% in 2025. Spending is expected to rise from an average of $185 million in 2024-25 to $249 million in the subsequent financial year. Technology priorities within the sector are similarly evolving. In the near and medium term, 51% of respondents identified solar energy as a primary focus. Over a longer time horizon, 61% cited battery storage solutions and carbon capture and storage as key priorities. Geothermal and hydrogen technologies were also highlighted as areas of significant interest over the next decade.
Key Risks and Challenges
Supply chain disruptions and geopolitical instability were named as top risks by industry leaders. Of those surveyed, 79% cited supply chain challenges, while 78% identified geopolitical uncertainty as a key concern. Trade tensions, regulatory changes, and shifts in government subsidies were noted as factors contributing to these risks. Challenges in obtaining suitable insurance coverage were also highlighted. Over half of the respondents, 53%, stated that blanket exclusions were a barrier to risk transfer. Other concerns included limited policy duration and inflexible terms (48%), and a lack of suitable insurance products (47%).
Rupert Mackenzie, global head of natural resources at Willis, stated that natural resources companies are faced with the challenge of balancing regulatory, financial, and operational challenges while transitioning to clean energy.
