# embedding_metadata

key: chroma:document
string_value:
8/11/23, 10:36 AM Leading by example in spearheading the energy transition
https://www.pwc.com/gx/en/services/tax/publications/leading-by-example-in-spearheading-the-energy-transition.html 2/7
unfamiliar with the Green Deal, and only 29% were prepared for
it. But some other findings were more encouraging: for
example, 66% had already earmarked capital to invest in
becoming more sustainable, and 51% said they intend to shift
key locations in their supply chain.


key: chroma:document
string_value:
What do these findings tell us? Based on my everyday
conversations with Energy, Utilities and Resources (EU&R)
companies, who are by nature heavy users of energy and
resources and thus ahead of the curve in this area, it’s a reality
check to hear that more than half of companies across all
industries are not familiar with the EU Green Deal. Especially
because EU&R businesses are actively working on
decarbonisation, and hence most of them are keenly aware of
what the Green Deal means for them. So, for me, the lower level
of awareness in other sectors sounds like a wake-up call that
more story-telling is needed to get the message across. Something else I find surprising is the relatively high proportion
of companies – 51% – that are looking to reshape their supply
chains to reduce carbon. While I’m seeing more and more
EU&R companies do this, including moves such as the wind
farm investment I mentioned above, I’ve seen less concrete
action on supply chains so far in other industries. Which
suggests that this is an area where EU&R companies can lead
the way – and are doing so. Priorities for progress
So, what actions should companies in EU&R – and across other
sectors – be taking to support the Green Deal’s goals and
comply with its requirements? Again, the EU Green Deal Survey
results provide some useful guidance. Among sustainability
initiatives, decarbonising energy emerges as the top priority –
with 78% of companies wanting to increase their consumption
of clean energy, and 60% looking to reduce their energy
consumption, which means becoming more energy efficient. For companies in any industry, the first step towards these
priorities is to inventorise their energy usage across their
operations and the resulting Scope 1 and Scope 2 emissions.


key: chroma:document
string_value:
8/11/23, 10:36 AM Leading by example in spearheading the energy transition
https://www.pwc.com/gx/en/services/tax/publications/leading-by-example-in-spearheading-the-energy-transition.html 3/7
more outside the span of control of the company. Large
companies that are already emitting within Europe can have a
head-start in creating this inventory, as they’ll already be
subject to the EU Emissions Trading System (ETS), as a result
of which they should already have the processes, procedures
and technologies in place to understand their emissions
elsewhere in the world. Armed with a comprehensive inventory,
a business can identify which areas of its operations and
sourcing can be replaced or upgraded most easily to reduce
energy usage and carbon emissions, and target investment at
these. EU&R companies can play a big role in helping other industries
realise these opportunities. Companies across the EU&R sector
– from long-standing incumbents to new startups – are
investing heavily in renewable energy, and international oil
companies are diversifying into renewables to decarbonise their
own business and to help others decarbonise. As part of this
shift, established EU&R players are using their existing
infrastructure and processes to support the energy transition,
while also applying their brain power and connections to
emphasise the importance of cooperation to maximise chances
for a successful transition. Cooperation between competitors in
the same Industry, across Industries, between public and
private and between politics and businesses.


key: chroma:document
string_value:
And they’re
helping to bring their customers and wider society along on the
journey, while being frank about the challenges it involves.


key: chroma:document
string_value:
This
includes the replacement of old jobs with new ones, but also
upskilling the workforce to better fit this changing demand for
new capabilities through extensive training programs. As mentioned before, a key enabler of this drive for greater
sustainability is collaboration and convergence between EU&R
and other industries, often including cooperation along value
chains between the public and private sectors. Some prime
examples? The roll-out across countries of infrastructure for
charging electric vehicles (EVs), the battery value chain. The
creation of integrated “industrial clusters” to improve energy
efficiency and reduce emissions. And joint investments in green
hydrogen to provide a decarbonised energy carrier for the
future.


key: chroma:document
string_value:
8/11/23, 10:36 AM Leading by example in spearheading the energy transition
https://www.pwc.com/gx/en/services/tax/publications/leading-by-example-in-spearheading-the-energy-transition.html 4/7
Government incentives are supporting the
journey…
Alongside public-private cooperation, a further powerful driver
of the EU Green Deal’s ambitions is government funding. Our
survey finds that 70% of companies undertaking environmental
improvements have tapped incentives, grants and tax credits to
do so.


key: chroma:document
string_value:
This bears out my experience with EU&R clients, which
suggests that companies’ traditional reluctance to take
government money has substantially softened – with a growing
acceptance that the sheer scale of the climate challenge means
accepting government support is fully justified and required. Under the EU Green Deal and other EU schemes there are
many funds and sources of finance for green initiatives,
available not just to companies but also countries. These funds
should act as a lubricant for the energy transition. …as taxes shift from labour to pollutive
activities
As progress continues, an important change that the EU Green
Deal is helping to drive – and which also has big implications for
EU&R businesses – is an ongoing shift in the focus of taxation
away from labour and towards pollutive activities. While this
refocusing is clearly positive for the environment, it brings
significant challenges for governments, since it will not be easy
to replace the existing revenues from labour taxes with a similar
level of income from pollution-based levies. But there’s now the
political will in place to reshape the tax base in this way, and
legislation and tax rules will follow: the question is not if, but
when. The opportunities ahead for EU&R businesses
In my view, the main opportunities are two-fold. First, to
harness the know-how and funds now available to limit the
negative impacts of climate change by reducing emissions.


key: chroma:document
string_value:
And second, to lead by example and help other industries
navigate the transition successfully. This is all the more
important in a world where companies are seen as being
responsible and accountable to their wider stakeholders


key: chroma:document
string_value:
8/11/23, 10:36 AM Leading by example in spearheading the energy transition
https://www.pwc.com/gx/en/services/tax/publications/leading-by-example-in-spearheading-the-energy-transition.html 5/7
rather than just shareholders, and where environmental,
ethical and humanitarian issues increasingly influence their
financial performance and valuation. These opportunities are mirrored by the biggest downside
risks from failing to comply with the Green Deal.


key: chroma:document
string_value:
The risks
include a strongly rising carbon price, increased costs
passed on to consumers and business customers,
reputational and financial damage, and – most important of
all – a failure to halt the rise in global temperatures that’s
threatening the future of the planet and mankind. While the EU Green Deal raises challenges for EU&R
business, it also gives them a chance to be among the
leaders in tackling the biggest single threat facing the world
today. It’s a role that Europe’s EU&R companies are
increasingly starting to play. Related content
The EU Green Deal and operations: advancing from digital operations transformation to
physical value chain reengineering
From my everyday conversations with clients across many industries, it’s clear that operations transformation using
digital remains a major focus. The core...


key: chroma:document
string_value:
8/11/23, 10:36 AM Leading by example in spearheading the energy transition
https://www.pwc.com/gx/en/services/tax/publications/leading-by-example-in-spearheading-the-energy-transition.html 6/7
Industrial products: A huge industry wrestling with diverse issues
If you spend a lot of time – as I do – working with industrial products companies, you’ll know they have one key
characteristic that shines through every day:... Why consumer markets companies need an overarching ESG strategy
This is the first entry in a blog series which aims to deliver an industry perspective on the findings of the EU Green
Deal Survey. The first of which delves...


key: chroma:document
string_value:
8/11/23, 10:36 AM Leading by example in spearheading the energy transition
https://www.pwc.com/gx/en/services/tax/publications/leading-by-example-in-spearheading-the-energy-transition.html 7/7
See what's new
Get in touch
Email
Chris Winkelman
Energy - Utilities - Resources Industry Leader & Energy Transition Leader, Partner, PwC
Netherlands
Tel: +31 (0)65 154 18 97
PwC office locations Site map Contact us
© 2017 - 2023 PwC. All rights reserved.


key: chroma:document
string_value:
PwC refers to the PwC network and/or one or more of its member firms, each
of which is a separate legal entity. Please see www.pwc.com/structure for further details. Legal notices  Privacy  Cookie policy  Legal disclaimer  Terms and conditions


