Published September 18, 2025 in Sustainability âą 15 min read âą 
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Picture this: youâre in a top team running a multinational corporation, perhaps in consumer goods, automotive manufacturing, or financial services. A decade ago, your business environment was relatively stable. Your value chains seemed reliable, and your strategic risks reasonably contained. Today, those certainties are dissolving. Youâre facing a landscape reshaped by forces moving faster and cutting deeper than anything you can remember: disruptive technologies evolving at exponential speed, geopolitical fault lines redrawing trade routes and investment flows, and mounting competition for the critical resources that underpin the global economy.
At the center of this storm lies the energy challenge. Energy demand is rising, driven by economic growth, electrification, and digitalization across the Global South. But our energy supply system, dependent on fossil fuels, is incompatible with climate goals, investor expectations, and the planetâs resilience. That tension sits at the heart of every companyâs strategic agenda. The energy transition, once the preserve of utility companies and regulators, cuts across every sector. It is transforming how goods are produced, transported, and consumed. Renewable technologies, once costly and experimental, have become cost-competitive and widely adopted. Electric vehicles, dismissed as niche products just a few years ago, are outselling internal combustion engines in multiple markets. Artificial intelligence is reshaping our world and the energy conversation with it.
But the transition is not universal. Hard-to-abate sectors such as aviation, cement, and steel remain tethered to legacy infrastructure and long investment cycles, with few low-cost clean energy alternatives available. This inertia introduces strategic risk: climate-related regulatory exposure, stranded assets, and declining investor confidence.
Just as the need for coordinated action grows more urgent, it has slipped down the priority list as the spotlight has shifted to geopolitics, trade restrictions, war, or generative AI. The energy transition risks becoming a forgotten revolution, unfolding in the background while executive attention is pulled elsewhere.
However, this is precisely the moment organizations need to double down and take a wider view. The body of evidence indicates that those who focus on and accelerate with the energy transition will succeed, while those who hesitate will struggle. Just consider the following imperatives in play:
How can companies surf these waves of change to emerge as the winners of the energy transition? Success demands more than carbon accounting or digital dashboards. It requires an integrated, sustained approach that connects the dots between breakthrough technologies, resource availability, policy shifts, and finance flows. This begins by reassessing and understanding the trends shaping a greener future. Making sense of these strategic shifts for your own context will reveal whether your organization is fit for purpose.
While much of the world has been distracted by political postures, trade disputes, and the hype surrounding AI, China has been executing a full-spectrum strategy to dominate the next industrial era. Once seen as the worldâs factory floor, China has quietly and deliberately reinvented itself as the global center of clean-tech innovation. It leads the world in patent filings for electric vehicles, renewable energy components, energy storage systems, and grid technologies. Its industrial policies â blending long-term investment, strategic subsidies, and R&D funding â have created an innovation velocity that other nations struggle to match.
Nowhere is this transformation more visible than in the automotive sector. BYD, a company virtually unknown outside China a decade ago, has overtaken Tesla in EV sales and tops IMDâs 2025 Future Readiness Index. Itâs not only selling more cars but also controlling more of what goes into them: batteries, software, chips, and powertrains. This vertically integrated model, backed by a favorable national industrial policy and domestic scaling, is hard to compete with.
China has also accelerated its global leadership in a wide range of future technologies, from lithium iron phosphate (LFP) and sodium-ion batteries to compressed air and gravity-based storage solutions, and solar PV. Its national hydrogen roadmap scales across sectors. All of this rests on a simple foundation: mineral access. China doesnât just make the parts; it has built a significant presence upstream. It processes over 80% of the worldâs cobalt, more than 90% of rare earth elements (such as scandium, used in aerospace alloys, or neodymium, critical for high-performance magnets), and dominates lithium, graphite, and nickel refining. Between 2020 and 2024, it accounted for the lionâs share of global supply chain growth in critical materials.
The implications for international businesses are far-reaching. When China imposed export restrictions on critical minerals and rare-earth magnets in April 2025, German automakers warned of production shutdowns and severe economic impacts across their supply chains. European electronics manufacturers reported growing uncertainty around the availability of neodymium and dysprosium, key materials for high-performance magnets used in everything from wind turbines to advanced medical imaging devices. This points to a systemic dependency for most global companies on Chinese-controlled chokepoints in the clean-tech value chain. At the same time, Chinaâs leading role in the green transition represents a considerable market opportunity for forward-thinking businesses.
Find out how vulnerable your value chain is to a Chinese policy shift, export restriction, or geopolitical escalation. What would a supply interruption do to your growth strategy? Unless addressed, these uncertainties could derail your business entirely. On the other hand, consider what opportunities related to China and relevant to your business are available. Find out how to explore and embrace those opportunities.
None of tomorrowâs vital technologies can function without mined materials: the energy transition is also a materials transition. The speed, scale, and equity of that shift will be determined by how we secure the right minerals in the right places, without repeating the last centuryâs patterns of exploitation and instability. The message from the IEAâs Global Critical Materials Outlook is clear: lithium demand rose by nearly 30% in 2024, a threefold acceleration from the 2010s. Nickel, cobalt, graphite, and rare earth elements all rose between 6-8%, driven almost entirely by electric vehicles, battery storage, and renewable grids. For battery metals, 85% of demand growth came from the energy sector, and the refining of those materials has become even more geographically concentrated. Between 2020 and 2024, 90% of all new refining capacity was added in just two countries: Indonesia and China.
This extreme concentration is triggering a geopolitical scramble. President Donald Trumpâs recent overtures, including controversial mineral access deals in Ukraine and revived American interest in Greenlandâs rare earth reserves, reflect a growing awareness that without energy minerals, industrial sovereignty is impossible. Similar moves are playing out across Europe and Asia, where governments are scrambling to onshore or nearshore refining capacity, often with little transparency or social safeguards.
For companies, the risks are very real. Projected copper shortages are threatening manufacturing timelines and grid expansion across Europe. In the US, ambitious offshore wind projects face multi-year delays due not only to port infrastructure limitations but to global competition for steel, rare-earth magnets, and specialized vessel availability. These delays drive up costs, increase investor uncertainty, and put climate targets at risk.
Beyond boardroom strategies and procurement headaches, there lies a deeper social challenge: who digs up the future? From the lithium triangle of South America to artisanal cobalt mines in the Democratic Republic of Congo, the energy transition is producing new labor struggles, land rights conflicts, and environmental degradation, often in communities that saw little benefit from the last industrial revolution. As companies and governments race to secure materials, they must confront the risk of repeating colonial-era patterns of resource extraction: displaced communities, unsafe working conditions, and broken local economies. Boards that treat mineral sourcing as a purely transactional problem will find themselves exposed to reputational, legal, and financial fallout.
Smart firms are taking a different path: co-investing in responsible sourcing programs, funding traceability technologies, and supporting third-party certification schemes. They are collaborating with governments and NGOs to ensure that new mining capacity comes with upgraded infrastructure, fair wages, and development benefits for communities.
Few technologies promise more â or threaten more â than AI. Its rise is rewriting the rules of efficiency, automation, and decision-making as well as reshaping the energy landscape in ways many business leaders have yet to grasp fully. At first glance, AI appears to be a great ally in the transition to a sustainable economy. Advanced analytics, real-time simulations, and autonomous systems are helping organizations optimize supply chains, reduce waste, and anticipate risk in ways previously unimaginable. Research by Stern et al. (2025) shows that AI deployed strategically in three sectors (power, meat and dairy, and light vehicles) could slash global greenhouse gas emissions by up to 5.4 gigatonnes of COâ annually by 2035, more than offsetting the emissions added by its own expanding footprint.
The upside is tangible. Companies like UPS and Maersk are harnessing AI to optimize logistics and shipping routes. NestlĂ© uses AI to reduce food waste by efficiently matching surplus supplies with demand, while McDonaldâs is exploring AI-driven inventory analytics to minimize waste. AI-driven digital twins help manufacturers and energy providers spot inefficiencies before they become costly mistakes. In urban planning, AI is driving smarter, cleaner infrastructure investments.
Yet, AIâs promise comes at a steep price. The same computational power that fuels breakthrough applications requires massive energy inputs, especially during the training of large language models and machine learning algorithms. Microsoft, for example, reported a 30% rise in its carbon footprint between 2020 and 2023, mainly due to emissions from the expansion of its data-hosting infrastructure.
Energy use is just the beginning. For example, the mining of rare earth elements and metals required for AI processors adds pressure to already strained supply chains for many of the materials powering the energy transition itself. The result? A collision of demands: AI is enabling the clean energy revolution, while exacerbating the challenges that threaten it.
The question is no longer whether AI will transform sustainability â it already has. The real question is whether business leaders will guide that transformation strategically and responsibly or let it run on autopilot.
If the energy transition is global in ambition, it is profoundly unequal in execution: the vast majority of the world is being left behind. Over 85% of clean energy finance flows into developed economies. That leaves less than 10% for the rest of the Global South, a region that houses half of the worldâs population, most of its future growth in energy demand, and many of its critical mineral reserves.
The result is a growing investment fault line that undermines not only climate targets but also global economic stability. Take solar capacity: the Netherlands, home to 17 million people, has more installed solar panels than sub-Saharan Africa. The reasons are structural: higher perceived investment risk, less developed financial systems, and limited access to concessional capital. Yet the consequences are strategic. Without accelerated investment in these markets, the global transition simply will not happen â or not happen fast enough.
The good news? Leapfrogging is possible. Distributed renewables, smart mini-grids, and digital monitoring tools mean many developing economies could skip the dirty phase of industrialization. But leapfrogging does not come for free. It requires patient capital, de-risking mechanisms, technology and patent transfers, and a redesign of global financial flows. This is where corporate strategy meets moral responsibility.
The opportunity for business is real and growing. Heineken, for example, partnered with the Dutch development bank FMO to finance solar PPAs for its Nigerian operations, cutting costs and risks while improving grid reliability. Multinationals across textiles, agriculture, and tech are seeing energy access as part of supply chain resilience. The financial architecture must evolve, too. Companies must work with development banks, pension funds, and insurers to create blended-finance structures that reduce risk and unlock scale. Treasury teams need new capabilities: deal structuring, concessional capital literacy, and sovereign engagement.
The next wave of clean growth wonât only be built in Frankfurt or Silicon Valley. It will also be built in Lagos, Jakarta, or Dhaka. And whether it happens fast enough will determine emissions trajectories and long-term global value generation.
Against this backdrop, climate leadership is a challenge on two fronts: reducing emissions at scale and building resilience to the disruptions already underway. Yet, too many companies treat these as separate conversations. The ones that will define their industries over the next decade are integrating both, designing mitigation and adaptation strategies to reshape their business models from the inside out.
For a growing number of industrial leaders, mitigation is no longer about marginal improvements but strategic reinvention, retooling the core business for a low-carbon economy.
Two companies stand out as examples: Siemens and Schneider Electric. Longtime rivals in electrification and industrial automation, they are now in what one author of this article calls âthe Coca-Cola wars of sustainabilityâ. Each is pushing the other to go further and faster in decarbonizing not only their operations, but those of their customers.
Siemens has embedded an internal carbon price for investment decisions and rolled out digital twin technology to help manufacturers simulate energy impacts before making changes on the shop floor. Schneider has built a $40bn business helping clients reduce their emissions, turning sustainability into a top-line driver rather than a compliance cost. Their competition is raising the bar across sectors: from smart buildings and low-voltage grids to factory automation and energy-as-a-service models. This is what true mitigation leadership looks like, not offsetting emissions, but reengineering value creation for a net-zero future.
In the energy sector, European utility RWE is making a comparable shift. Once one of Europeâs largest coal generators, RWE is now among the continentâs fastest-growing renewable energy developers. It plans to invest âŹ55bn ($64bn) in green energy by 2030 â doubling down on the reality that future profitability hinges on decarbonized capacity. Ărstedâs pivot from fossil fuels to offshore wind is well documented, but it is worth including here. The point is to recognize the pattern: mitigation leaders arenât tweaking, theyâre transforming.
Also often overlooked is the vast and rapidly expanding landscape of transition opportunities between climate-tech pioneers and traditional corporates. Across industries, opportunities are emerging to retrofit existing infrastructure, electrify fleets, decarbonize heat, embed circular design into product lifecycles, and use AI to drive operational efficiency and resource optimization.
In real estate, developers are integrating low-carbon concrete and smart grid connectivity. In agriculture, startups are leveraging biochar and precision fermentation to reduce methane emissions and regenerate soil. In logistics, companies are using AI to optimize shipping routes and electrify last-mile delivery. Industrial firms are investing in hydrogen-powered heat processes, while retailers are reimagining packaging, logistics, and customer engagement with carbon and material footprints in mind.
The next wave of mitigation leaders will emerge not only from clean tech but from every sector willing to reimagine how it operates.
In contrast, adaptation is about survival and preparing for climate shocks that no amount of mitigation can avoid. Weâre already suffering from the consequences of our inaction.
Take Climeworks, the Swiss startup leading the charge in direct air capture (DAC), the process of removing COâ directly from the atmosphere. The technology is promising, potentially essential. Itâs also expensive, energy-intensive, and struggling to move from lab-scale to economic viability.
This reflects a broader truth: we cannot offset our way out of this crisis. Adaptation technologies are crucial, but they are not a substitute for emissions cuts. Theyâre a hedge; a safety net. In sectors such as insurance, food, and infrastructure, they are rapidly becoming a lifeline. Yet adaptation extends far beyond carbon removal. It includes physical infrastructure that can withstand extreme weather, supply chains that can reroute in real time, and cities that can cool, drain, and protect faster than nature disrupts.
From urban flood defenses in Bangkok to predictive crop management in sub-Saharan Africa, adaptation is becoming a core operating requirement. Itâs also a space ripe for innovation, but one that demands realism. The financial returns may be longer, the payoff harder to measure, but the risk of neglecting it is existential.
Opportunities are emerging rapidly. Businesses are investing in climate-resilient agriculture, including drought-tolerant crops, sensor-based irrigation, and AI-driven yield prediction. Utilities are exploring distributed energy networks to preserve continuity during grid disruptions caused by storms or heatwaves. Apparel and food producers are localizing and diversifying sourcing to insulate themselves from climate-related supply volatility. Cities and developers are embedding adaptation into planning codes, with green roofs, permeable pavements, and heat-resilient design becoming standard practice in leading markets.
Even financial services are innovating: banks and insurers are offering new climate-linked products and rethinking asset valuations based on long-term exposure to climate risk. Human capital strategies are shifting, too. Companies are asking: how do we keep workers safe in high-heat environments? How do we address mental health and migration stress caused by extreme climate events? These are no longer peripheral questions; they are business continuity issues.
Adaptation is not an act of surrender. It is a strategic investment in operational integrity, community stability, and long-term viability. The businesses that thrive will be those that see resilience not as a cost, but as a core competency.
The most mature companies arenât choosing mitigation over adaptation, or vice versa. Theyâre building dual-track strategies that do both, often within the same capex cycle or innovation budget. Mitigation without adaptation is a delayed failure, and adaptation without mitigation is a slow surrender.
As the energy transition accelerates, so does the temptation to retreat. Faced with inflation, geopolitical instability, shifting subsidies, and political backlash, you might be tempted to quietly soften targets, delay investments, or deprioritize sustainability in favor of near-term stability. You may be hoping to coast until clarity returns, or you may be simply overwhelmed. In reality, this kind of inaction is a decision to let others define the rules of the game. What feels like caution today will be seen as complacency tomorrow. Those who step back will find themselves locked out of markets, talent, capital, and influence.
One question towers above the noise: are you preparing your business to thrive in a world remade by energy, technology, and climate risk, or are you optimizing for a version of the economy that no longer exists? As you face up to that question, consider these critical trade-offs:
In the coming decade, climate performance will become indistinguishable from financial performance. Leadership wonât be measured by how well you comply but by how clearly you chart direction, how bravely you invest ahead of the curve, and how quickly your organization can adapt to shocks without losing sight of its long-term mission.
As you face your next board meeting, quarterly review, or investor Q&A, donât just ask yourself, âWhat are we doing about sustainability, energy, or climate?â Ask, âAre we shaping the future, or will we be shaped by those who do?â
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