by Brianna Crandall — August 3, 2020 — Global financial and consulting services firm Deloitte released results from multiple surveys in recent weeks indicating that despite a “pause” during the pandemic and economic downturn, companies are still committed to their plans to reduce energy use and transition to clean energy in the long term.
Energy management and clean energy still on track
Since Deloitte began conducting its annual survey tracking clean energy attitudes and actions a decade ago, the percentage of consumers concerned about climate change and personal carbon footprints has risen steadily from about half to a consistent 68%, putting increasing pressure on businesses to do more. The year 2020 appeared to be the tipping point, but when COVID-19 hit, many questioned whether the momentum had been derailed as companies focused on survival.
Deloitte’s 2020 Resources Study, Energy Management: Paused by Pandemic, but Poised to Prevail, found that despite the pandemic — and maybe in part because of it — progress in efforts to manage energy use, reduce carbon emissions and address climate change will likely continue and even potentially accelerate in the longer term. The study is based on survey data collected from 1,531 residential consumers and 602 business decision-makers.
Marlene Motyka, principal, US and global renewable energy leader, Deloitte Transactions and Business Analytics LLP, remarked:
If there were any sort of “silver lining” to the disruption created by COVID-19, it may be that it seems to have acted as a clean energy accelerator, which the current recession will likely not deter. Over the last 10 years, we’ve seen a shift in energy attitudes, preferences and pressure gradually trend toward greater climate consciousness, but these past several months of isolation seem to have strengthened and propelled that momentum further.
Consumer views put pressure on businesses and governments to act
According to the survey, consumer sentiment about climate change has steadily increased over the past decade, which puts pressure on businesses and governments to take action. A full 68% of residential consumers surveyed said they were “extremely or very concerned” about climate change and their personal carbon footprint, and 65% said they saw greater renewable energy development as boosting the national economy, the highest level since 2014. While the benefits of clean energy are clear, most consumers (80%) surveyed expect others, such as the government and corporations, to address climate change issues. And about a third of respondents expect action from their employers.
Further emphasizing the corporate role, more than a third of respondents who identified as full- or part-time employees, students and/or job seekers said it is extremely or very important to work for a company with sustainability and/or climate-risk goals, and this sentiment rose to nearly 50% among Millennials. “Employee motivations” has consistently been one of the top three drivers of corporate energy management programs, selected by at least a quarter of business respondents each year. But in 2020, that rose to a third, the highest level ever in these surveys. Employees are becoming more vocal about climate change, and this may be due to the growing influence of Millennials in the workplace.
Businesses are feeling increasing stakeholder pressure to address climate risk
In line with rising consumer sentiment, nearly 60% of businesses surveyed feel increased pressure from stakeholders to develop and disclose plans to demonstrate how they are addressing climate risk. The stakeholders seen as most active are employees (49%), followed by board members (42%), customers (41%), and shareholders (37%). Of those businesses feeling increased pressure, nearly 90% have reviewed or changed their climate-risk disclosure procedures and developed plans to address climate-related risks.
Importantly, although businesses are feeling pressure, they also increasingly see procuring clean energy as doing the “right thing.” In fact, 75% of those surveyed said recent global climate change reports have caused them to focus more on energy management. And almost 90% of respondents now see energy procurement as “not simply a cost to the company, but an opportunity to reduce risk, improve resilience, and create new value.”
Convergence of cost and clean means more green
Over the past 10 years, the “cost” versus “clean” motivations for utilizing cleaner energy resources have been steadily converging as renewable energy costs have declined. This greater affordability is allowing businesses and consumers to prioritize clean energy without making bottom-line sacrifices.
Businesses are procuring more renewables through more channels:
- 63% of businesses surveyed have increased emission reduction goals.
- Three-quarters of business respondents said customers are asking them to procure renewable energy.
- More than half (51%) of businesses said they are working to procure more electricity from renewables.
- Of the 60% of businesses citing having onsite generation, the highest share of electricity supply was generated with cogeneration (15%) and renewables (13%).
- Microgrids also appear to be growing in popularity, with 44% of business respondents saying they’ve considered a microgrid, a spike of 9 points over 2019.
Interestingly, residential consumers are still cost-conscious but putting environment first:
- For the first time in five years, “utilizing clean energy sources to be better stewards of the environment” was cited ahead of “keeping my total energy bills affordable” as one of the top three most important energy issues to residential consumers.
- More than half (53%) of respondents said it’s “extremely” or “very” important that part of their electricity supply comes from renewable energy.
- 32% of respondents said they were “very” or “extremely” interested in installing solar panels, and 51% expressed interest if combined with battery storage.
- Among respondents who had already installed rooftop solar, “clean” beat out saving money for the first time as the primary motivator.
Jim Thomson, vice chairman, US power, utilities and renewables leader, Deloitte Consulting LLP, stated:
The preference for cleaner energy sources will likely continue, and given their increasing affordability, usage may continue to grow even during a recession. Sustained strong consumer sentiment and increasing pressure on businesses, coupled with accelerating capital markets’ reward for ESG-minded companies, are positively reinforcing the energy management value proposition for many businesses long term.
Hurdles to clear for more meaningful progress
Power reliability and protection of data have consistently been the top issues cited by businesses and consumers in adopting or expanding technology that provides more flexibility in managing and controlling electricity use and sources. A full 52% of businesses and 37% of consumers surveyed are concerned about an interruption to their electricity supply due to a cybersecurity event. And 76% of residential respondents cited growing concern about privacy and security as homes become more automated. These hurdles threaten to slow progress in energy management if not addressed by energy and technology providers.
Deloitte’s 2020 Resources Study, Energy Management: Paused by Pandemic, but Poised to Prevail, is available for free download from the firm’s website.
Energy and industrial sectors remain on track for transitioning to clean energy long-term
Similarly, Deloitte’s survey released in May of energy and industrial sector executives indicated a continued prioritization of the transition to cleaner energies in the longer term despite the pandemic.
Key takeaways of the results include:
- Despite current economic challenges, energy and industrial leaders are expected to remain committed to their long-term plans to reduce fossil fuel reliance.
- 89% of executives surveyed across energy and industrial sectors reported already having or developing a strategy to reduce reliance on fossil fuels.
- While a temporary pause in spending on some priorities and technologies is expected, as companies await a recovery, they are unlikely to be canceled completely.
- Momentum for action on decarbonization, reinforced by growing consumer and stakeholder pressures, will likely not be compromised by present circumstances.
Navigating the Energy Transition from Disruption to Growth is also available on the Deloitte website.
Power & Utilities and Renewable Energy industry outlooks
In addition, Deloitte released in July its 2020 midyear Power & Utilities and Renewable Energy industry outlooks that take a look at the latest challenges facing these industries as they respond, recover and thrive in the current downturn.