This year, in our annual global survey of over 4,000 C-suite executives from across sectors, including energy, the top five boardroom concerns were surging energy prices, inflation reaching damaging levels, rising unemployment, global energy shortages, and economies failing to tackle climate change quickly. All five elements are interconnected and have major ripple effects across entire economies. The energy sector, which fuels our economies globally, is victim to current volatile geo-politics and energy independence is becoming an omnipresent national security issue – driving increased impetus for faster energy transitions.
Lenders and investors are challenging the robustness of business strategies to deal with market events and supply side shocks, now and in the future. The very relevance of business models to address rapidly changing consumer, societal, and economic needs is under review.
Global sanctions are impacting profitability and liquidity, and in some cases, lenders and regulators are requiring a clear roadmap for transitioning away from certain energy operations, for example those linked to Russia. Decisionmakers are demanding enhanced visibility and documentation on specific milestones for “de-risking” events as well as future plans for greater resilience.
With diminishing investor appetite for the traditional energy sector, businesses will need to start preparing contingency plans alongside their refinancing strategies to maintain optionality and protect value for stakeholders.