Future Fit businesses outperform others. They've flourished by hitting objectives like growth, innovation and sustainability. Their forward planning and agility have enabled them to drive through execution despite uncertainty.

Here are some highlights from our Future Fit data, which show how energy businesses that effectively integrate sustainability into their operations and projects are better positioned to thrive in a fast-changing sector.

• Define your ‘North Star’: Establish a clear vision and purpose to guide your business through volatility and instability.
• Understand your ecosystem: Anticipate supply chain pressures and political and economic challenges by developing contingency plans.
• Integrate goals for multiple impact: Align sustainability, resilience, innovation and talent strategies to drive transformative change.

Our research surveying 100 businesses from across the natural resources, renewables and utilities sector highlights what it takes to become Future Fit in these industries. Sustainability  and digital transformation are specifically providing an edge to those setting the pace.

None of these businesses have it easy. Renewables businesses are managing significant investment programmes while facing down political and economic volatility. Utilities companies are dealing with the pressures of a regulated marketplace, with significant press scrutiny. And in the natural resources sector, companies such as oil and gas producers are working out how to position themselves in a transitioning world.

Andy O’Hare, our Head of Natural Resources, Renewables and Utilities, says the Future Fit businesses in these industries are those that have been quickest to pick a path through disruption and change. “They successfully position themselves for tomorrow’s world, embracing sustainability in every sense of the word,” he says.

• Work with key stakeholders, including shareholders, to understand their priorities for improved sustainability and decarbonisation.
• Align sustainability objectives to commercial strategy to drive returns on investment that fund further gains.
• Leverage sustainability improvements for business advantage – explore green finance, for example, and sustainability’s role in recruitment and retention.

While natural resources, renewables and utilities businesses are in very different places on sustainability issues – particularly on decarbonisation – leaders in the sector have much in common.

Businesses from across the sector implement tools and solutions to improve their performance on key sustainability issues: almost three-quarters (72%) have taken measures to reduce energy consumption; more than half (54%) have tools to monitor and report on their environmental impacts; and 52% now include contribution to purpose as one of the metrics in employees’ performance reviews.

Critically, 68% of these businesses believe that investment in sustainability improvements can drive competitive advantage and 66% point to the view of their employees, reporting that their workforce expects to be engaged and inspired by a sense of purpose.

“The biggest winners are those businesses that really exploit the link between sustainability and their commercial objectives,” Andy says.

• Put data-driven insights at the heart of strategic and commercial decision-making to improve internal operations and client experiences.
• Explore areas where business model change could be enabled by digital transformation to create new opportunities for organisations.
• Identify innovation leaders from across the business who could drive transformation to enhance efficiency, productivity and sustainability.

The leaders in this sector recognise the importance of proactively embracing new innovations. This is how they will drive change most effectively, Andy explains, pointing to the complexity of the physical infrastructure in many of these businesses, often backed up by multiple technology systems and IT networks. “It can be challenging to stitch those legacy systems together, particularly where you’re utilising operational technology such as sensors as well as traditional information technology assets,” he says.

The key to making progress is to identify where new technologies could help businesses to reduce inefficiency and improve performance. More than a third of businesses in the sector (36%) now adopt artificial intelligence tools, for example. “Optimisation is everything for many of these organisations in terms of delivering profitability,” Andy says.

• Forge closer relationships with suppliers and customers to co-develop solutions to shared problem and to promote ideation.
• Use the sustainability agenda to drive closer collaboration, providing a foundation for closer working in other areas.
• Improve the business’s practices on monitoring suppliers’ environmental, social and governance (ESG) performance.

Whether it’s renewable energy providers that must source raw materials and connect to the grid, or oil and gas businesses dependent on transport and logistics companies, collaboration up and down the value chain is vital.

The sector’s leaders are making good progress here: 47% regularly collaborate with suppliers on strategic decisions, 55% have already implemented supply chain risk modelling and 47% use traceability technology.

Andy urges other businesses to embrace this idea. “When your suppliers understand your needs and objectives, you have a broader group of people looking to solve your problems – and they do so from different angles,” he says.

The imperative for close collaboration will also be driven by the sustainability agenda, Andy points out. “The development of gigafactories is a good example because as electric vehicle battery passports come in, the end user needs to be able to understand and verify what has gone into the battery at every stage.”

• Prioritise long-term skills challenges at the senior leadership level.
• Establish links with universities to attract graduates.
• Develop compelling employee value propositions that go beyond financial rewards.

The most Future Fit businesses in this research recognise that talent is the final piece of the jigsaw and take far-sighted steps to secure the skills they will need to compete for years to come.

While 64% understand their long-term skills needs only 26% have detailed plans and partnerships to meet these needs. There is no time to lose, Andy says.

“This is a transformational time for the sector and there is a huge development opportunity to be offered to prospective employees, but that requires businesses to bring in the right talent,” he says. Organisations must understand exactly what their needs are going to be and then identify how those needs might be met. Could renewable energy businesses, for example, leverage the skill sets of those trained by the oil and gas sector?

Renewables businesses and those in related fields may have an advantage, in that younger people in particular appear to be increasingly focused on concepts such as purpose and sustainability when choosing employers. But everyone in the sector will need to look beyond remuneration to attract the best people.

Future Fit businesses in the sector balance risk and opportunity as they look to the future, Andy says. “Their leaders spend time thinking about how to make the business safe in terms of what tomorrow’s world is going to look like, but also focus on what can be done to realise the opportunities that it will bring.”

In a fast-moving sector, that debate will be ongoing and ever-changing. But leading businesses are underpinned by resilience, giving them the confidence to adapt as the external environment evolves.

By acting now to prioritise change, your business could be more ready to boost future resilience, meet market demand, reduce costs, or access capital. Find out about all the ways we could support you.

Renewables & Utilities, Natural Resources

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