Industry Trend Analysis - Shifting Corporate Strategies Towards The Low Carbon Economy - OCT 2017


The global transition towards a low carbon economy continues to gather pace, emboldened by the 2015 UN Paris Climate Accord (COP21), which outlines the goal to reduce global greenhouse gas emissions in order to limit the global temperature increase well below 2degC from pre-industrial age temperatures.

The push to decarbonise has been identified by BMI's Industry teams as a key megatrend impacting various industries over the coming decades, as policies to reduce emissions, boost energy efficiency and promote sustainable sourcing in the supply chain come to the fore. Those companies in the heavy industry space, such as Autos, Mining, Power, Oil & Gas, and Infrastructure, are already under increasing social, investor, and regulatory pressure to lower emissions and reduce their environmental footprint. We have highlighted the heavy industry sectors as most acutely impacted by this trend given their typically energy-intensive practices and the fact their operating models are most exposed to environmental legislation.

As such, we identify that corporate strategy in the heavy industry space is evolving in line with this growing focus on environmental policy, as companies pivot towards this new operating environment. This ranges from autos companies increasing their electric vehicle manufacturing capacity, utilities ramping up investment into energy services and grid digitalisation, oil & gas majors focusing more heavily on their gas portfolios, infrastructure firms adopting more sustainable building materials into construction projects or mining companies utilising big data analytics to streamline operations and boost energy and operational efficiencies.

High Emissions Profile Of The Heavy Industries
Total Anthropogenic Greenhouse Gas Emissions By Economic Sector (% of total emissions 2010)
Second plot represents 'indirect CO2 emissions' from the electricity and heat production sector. Source: IPCC 2014

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