Despite record clean energy investments, executives cite financial constraints, shareholder hesitancy, and policy uncertainty as key obstacles—while optimism grows around AI and emerging technologies
Despite record-breaking global investments in clean energy last year, the leaders of the companies tasked with delivering on the transition have become less optimistic about when the world will achieve net-zero carbon emissions. This is according to Bain & Company’s 2025 Energy & Natural Resources Executive Survey.
Nearly half (44%) of energy and natural resources (ENR) executives now expect the world to reach net-zero emissions by 2070 or later, a steep jump from the 31% that felt this way in 2024. Similarly, only 32% expect it by 2050—a reversal from previous surveys, when around 40% to 50% foresaw net zero by 2050.
On average, oil and gas executives anticipate peak oil around 2038, a clear signal that sector leaders expect legacy assets to play a crucial role in meeting energy demand for the foreseeable future.
Bain’s annual survey of more than 700 executives across oil and gas, utilities, chemicals, mining, and agribusiness offers a pulse check on industry leaders’ views on the energy transition’s challenges and opportunities, providing perspective on how they’re balancing those investments with other business priorities.
Financial viability a major obstacle for the energy transition
The era of enthusiasm for environmental, social, and corporate governance–driven investment is giving way to a harder-nosed focus on ROI. Tighter budgets, constrained balance sheets, and rapidly rising capital costs are forcing companies to make tough calls about where to place their bets.
Executives continue to say their top roadblock to scaling up their transition-oriented growth energy (TGE) business is finding enough customers willing to pay higher prices to create sufficient ROI, with a greater portion pointing to a lack of shareholder support as a major issue this year. Other top obstacles include government policy and regulation as well as a lack of cash or capital.
“Energy leaders are facing a stark reality: the transition to net zero is proving more financially and operationally complex than many anticipated. Rising capital costs, policy uncertainty, and shareholder hesitancy are forcing executives to make difficult trade-offs. However, the growing optimism around AI and emerging technologies suggests that innovation will play a crucial role in overcoming these challenges.” – Eric Beranger-Fenouillet , Head of Energy, Natural Resources and Sustainability & Responsibility Practices at Bain & Company Middle East
Capital project costs continue to rise
More than three-quarters of executives say their capital project costs rose at least somewhat over the past 12 months, and one in 10 executives experienced extreme cost increases surpassing 20%. To deliver projects more effectively, executives intend to improve capital allocation across their portfolios, more tightly scope projects, and do a better job of engineering project value and designing project concepts. Nearly half plan to deploy technologies, including AI, to help improve project execution and outcomes.
Pockets of optimism around AI, other emerging technologies
Though optimism about the net-zero timeline has slipped, executives feel increasingly positive about the business cases for select emerging technologies. Enthusiasm for AI and digital tools is surging, with 72% of executives saying they feel positively about the 5-to-10-year business case for these technologies.
“Emerging technologies like AI and energy storage are offering a bright spot amid the challenges. While we may have to adjust our timelines for net-zero, the continued development and adoption of transformative technologies could be the key to overcoming the financial and regulatory obstacles hindering the energy transition.” – Raja Atoui, Partner, Energy Natural Resources and Sustainability & Responsibility Practices at Bain & Company Middle East
While companies may have been able to put off major technology investments without significant consequences in recent years, executives are starting to recognize that those days are over. Most say they are planning technology-enabled improvements across multiple key functions, and one of the first items on the agenda is overhauling their ERP systems—more than 60% anticipate their next ERP transformation will take place within the next three years.
Executives are also more confident about the business cases for energy storage (47% feel positively about this business case), renewables (45%), and circularity (39%), as well as carbon capture, utilization, and storage (43%).
Utilities cautiously confident about meeting AI-driven energy demands
Bain estimates data centers’ annual global energy consumption could more than double by 2027, consuming 2.6% of global energy power and costing more than $2 trillion in new energy generation resources.
Utilities executives are clear-eyed about the challenge. Most believe they can manage the demand spike, though many (43%) say that’s only if everything goes right. For utilities worldwide, the top three solutions to meet increased demand from AI and data centers are investing in more renewables, prolonging the lifespan of existing assets, and adding more natural gas assets. Nuclear is seen as a potentially important lever in North America, though executives in other regions aren’t considering it as much.
