T H E 1 2 T H U THE MOST PRESSING CHALLENGES ENERGY CROSS INDUSTRY N I T E D N A 1 INFLATION & PRICE VOLATILITY 2 CLIMATE CHANGE 3 TRADE REGULATION T I O N S G L 1% 23% O B A 9% L C O 58% 57% 57% M P 34% 40% 31% A C T - A C C The energy industry is enduring E N T massive disruption, with the U R CURRENT LANDSCAPE E C pandemic and the war in Ukraine E O S triggering spikes in energy prices T TOP RESILIENCE ACTIONS FOR ENERGY CEOS U D and threatening the security of Y supply. This disruption presents Y of CEOs are of CEOs are of CEOs are upskilling or digitizing investing in 75% 73% 71% a unique opportunity for CEOs to reskilling their workforce for business processes renewable energy sources accelerate their adoption of low-the future labor market to reduce their dependency carbon fuels, invest in innovations on fossil fuels to decarbonize, and expand energy G access and equity. Mounting pressure from geopolitical conflicts, as well as regulatory changes and consumer pressure to address climate change concerns, are accelerating the energy sector’s sustainability transition and decarbonization efforts. The volatile supply of fossil fuels is prompting the industry to reimagine a cleaner, more secure energy system for the future. To tackle the challenge of decarbonizing energy production, companies are embracing renewables, exploring cleaner production methods, and investigating carbon-capture methods. Taking action towards decarbonization in the energy industry in particular addresses both the demand and supply side of the net-zero equation. As part of the transformation, a top priority for CEOs is to ensure that they promote a just transition, not only for employees – which companies are prioritizing reskilling for clean energy jobs – but also for the wider society by striving to avoid new forms of inequity or infrastructure poverty. ER WHERE IS THE INDUSTRY GOING? TOP SUSTAINABILITY PRIORITIES FOR INDUSTRIAL CEOS “Ten years ago I’m not sure how many CEOs would have said of CEOs are of CEOs are of CEOs are lowering enhancing investing in 69% 49% 49% sustainability is something they GHG emissions diversity and inclusion skills development would discuss with their board at every meeting, or even something they would focus on with their Energy sector CEOs are also looking at transformative ways to diversify their fuel sources, aiming to build a diversified, distributed employees. Now, it’s an essential energy system. In terms of diversification, CEOs are especially embracing low-carbon fuel sources like clean hydrogen fuels, and part of doing business.”biofuels (including sustainable aviation fuel). To further decarbonize the industry, the energy sector is exploring innovative avenues like carbon capture and storage (CCS) to produce and distribute energy as cleanly as possible. The removal of carbon from the energy Lorenzo Simonelli, ENsystem with CCS and industrial efficiency technologies provides significant potential in terms of emissions reduction and economic Chairman & CEO of Baker Hughesvalue. These innovations are redefining the energy industry, setting the stage for a more diverse, multi-fuel system. TRANSFORMATIVE INNOVATIONS Renewable energy 77% Energy storage and battery technology 69% Interconnected power girds (cross-country) 61% Carbon capture, utilization, and storage 51% Hydrogen fuel 46% Circular energy systems 46% HIGH IMPACT MODERATE IMPACT LOW IMPACT NO IMPACT 102 103