Global Investment in Energy Decarbonization: Challenges and Opportunities
The decision makers driving the commercial and industrial sector energy evolution are still clearly on the side of sustainability and decarbonization, but they desire clearer policy markers at the governmental and regulatory levels to light the path.
Nine in 10 business leaders rank sustainability as a competitive advantage and they are backing that up with 89% of those surveyed are still investing in decarbonizing strategies, according to according to a new report from the World Business Council for Sustainable Development (WBCSD) in partnership with the Breakthrough Agenda, the Marrakech Partnership and with the support of Bain & Company and the Climate High-level Champions.
The report, “Business Breakthrough Barometer 2026,” also learned that most executives are concerned about a “disorderly climate transition” with rising energy and decarbonization costs. They also want more consistent policy strategies from government entities, and nearly half are willing to pay more short-term for stricter regulations.
“The climate transition is underway and is increasingly accelerating as the economic, resilience and supply-chain security benefits of sustainability become ever stronger,” Peter Bakker, president and CEO of the World Business Council for Sustainable Development. “But there is a growing cloud on the horizon as climate impacts and policy volatility drive up costs and risks for businesses. The real challenge is whether and when governments will act decisively through policy strengthening, certainty and coordination.”
So far, the second Trump Administration has not shown much support for decarbonization strategies and eliminated some incentives for electrification through the One Big Beautiful Bill Act. These climate investment headwinds are strongest in the U.S. as the nations await mid-term elections which could counter-balance the administration’s fossil-friendly policies.
For this reason, some 85% of business leaders who were surveyed in the Business Breakthrough Barometer are calling for stronger and more predictable climate policy.
“This year's Barometer reveals disciplined selectivity in transition investments, not retreat,” Henning Huenteler, partner at Bain & Co., said. “Capital is available, but investors want a clear roadmap, backed by solid commercial economics and policy support.”
The World Economic Forum two years ago estimated that about $30 trillion in additional capital will be needed to achieve net zero targets in eight carbon-intensive sectors by 2050. Those sectors include the steel, cement and chemical industries.
In reality, global capital spending on energy decarbonization is closer to $2 trillion this year, according to S&P Global.
Among the biggest spenders on lower carbon energy contracts are data infrastructure hyperscalers such as Amazon, Google, Meta and Microsoft. The artificial intelligence technology buildout anticipated by those companies and others such as OpenAI is leading to as much as $511 billion capital investment on power generation capacity additions by 2030, according to financial analysts at UBS.
Energy efficiency investment by commercial and industrial companies is historically seen as a leading decarbonization tool to reduce emissions and is often nicknamed “the first fuel” in energy transition work.
A report earlier this year by energy management firm ABB noted that 63% of 2,700 industrial leaders surveyed are already invested in energy efficiency and more are planning to raise their spending.
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About the Author
Rod Walton, EnergyTech Managing Editor
Managing Editor
For EnergyTech editorial inquiries, please contact Managing Editor Rod Walton at [email protected].
Rod Walton has spent 17 years covering the energy industry as a newspaper and trade journalist. He formerly was energy writer and business editor at the Tulsa World. Later, he spent six years covering the electricity power sector for Pennwell and Clarion Events. He joined Endeavor and EnergyTech in November 2021.
Walton earned his Bachelors degree in journalism from the University of Oklahoma. His career stops include the Moore American, Bartlesville Examiner-Enterprise, Wagoner Tribune and Tulsa World.
EnergyTech is focused on the mission critical and large-scale energy users and their sustainability and resiliency goals. These include the commercial and industrial sectors, as well as the military, universities, data centers and microgrids. The C&I sectors together account for close to 30 percent of greenhouse gas emissions in the U.S.
He was named Managing Editor for Microgrid Knowledge and EnergyTech starting July 1, 2023
Many large-scale energy users such as Fortune 500 companies, and mission-critical users such as military bases, universities, healthcare facilities, public safety and data centers, shifting their energy priorities to reach net-zero carbon goals within the coming decades. These include plans for renewable energy power purchase agreements, but also on-site resiliency projects such as microgrids, combined heat and power, rooftop solar, energy storage, digitalization and building efficiency upgrades.