Highlights

• 84% of ENRC CEOs have confidence in growth, up from 72% in 2024, despite market pressures.
• CEOs rank AI as a top investment, and 66% expect returns within three years.
• Most CEOs have sustainability at the heart of their strategy, with 62% confident in meeting 2030 net zero goals.

KPMG’s 2025 ENRC CEO Outlook reveals that leaders in energy, natural resources, and chemicals view artificial intelligence (AI) as a tool for cutting emissions, improving efficiency, and securing growth in a market shaped by inflation, geopolitics, and regulatory shifts.

Confidence levels among CEOs have increased to 84%, up from 72% last year, which is a stronger outlook for the industry despite ongoing pressures.

Executives attribute this rise in optimism to ongoing demand for fossil fuels and renewables and progress in energy storage, smart grids, and carbon capture technology.

Even though 78% of business leaders are positive about their company’s growth, the number is slightly lower than the previous year’s figure of 82%. Many leaders are also reassessing their strategies for mergers and acquisitions (M&A), with a move toward smaller and more targeted transactions.

Read More: From Data to Impact: How AI Is Driving ESG Progress in the Channel

Only 36% foresee high-impact deals in 2025, compared with 58% last year, while more than half predict moderate activity.

AI shifts from trial use to a core business strategy

KPMG’s findings show that 65% of CEOs place generative AI among their top investment areas, a 12% rise from 2024. Around 72% intend to commit 10–20% of their budgets to AI projects over the next year. The technology is viewed as a foundation for smarter and more agile operations within the oil and gas sector, enhancing productivity, precision, and efficiency in drilling, refining, and renewable energy management.

Steve Chase, Global Head of AI and Digital Innovation, KPMG International, said: "CEOs are investing in AI with greater confidence — not just because of its promise, but because of the measurable value they are seeing and the rapid emergence of agents, making expected returns more accessible and scalable.

"Leading organizations are integrating AI into the core of their business strategies and investing in what’s needed for success: quality data, workforce readiness, and responsible AI governance built both for trust and agility."

66% of company chiefs, the report says, expect AI investments to yield returns within one to three years, up from 15% in 2024. This shows an acceleration in the adoption of Agentic AI, which many predict will transform operational and workforce efficiency.

Also Read: As AI Grows, Data Centres Face Soaring Energy Demand

Yet, concerns remain about ethics (55%), fragmented data systems (49%), and regulatory complexity (47%). These are seen as the main barriers slowing digital transformation.

KPMG experts say that geopolitical differences also impact how companies manoeuvre the energy transition, as regulations and energy policies vary across regions. Leaders have zeroed in on achieving economic balance between fossil fuels and renewables for project viability across their life cycles.

The report also shows that sustainability has transitioned from a corporate responsibility to a strategic business factor. About 72% of business heads say that sustainability is part of their corporate strategy.

Moreover, 62% are confident in meeting 2030 net zero targets, even though more than half admit that their ESG frameworks still lag behind investor and stakeholder expectations.

AI is important for environmental progress

Around 82% of executives opine that AI can help pare down emissions and optimise energy use, and 74% say it can improve climate risk analysis for better scenario modelling.

The report suggests that AI is fast becoming the operating system of the energy transition, giving teeth to grid management, demand forecasting, maintenance, and disclosure.

See Also: How AI Could Be The Key To ESG & Sustainability Working

However, to witness this, as well as to see tangible results, companies need secure and high-quality data, upgraded skills, and rationalised ESG governance.

Overall, KPMG's analysis shows that the industry is embracing change by integrating AI, planning with sustainability in mind, and using resilient development methods. In order to strike a balance between profitability and advancements in energy efficiency and net zero, CEOs are pushing technical innovation and data transparency.

***

Are you looking for sustainability experts to guide your business?

Explore our ESG Marketplace or solutions page, which features over 1000 providers offering a wide choice of sustainable advisory services.

Follow our Social and Governance News for regular news and views.

Also, check out our latest ESG Event updates