Investment in clean energy technologies is set to increase by over a third (34%) from the last financial year (2024 to 2025). But according to our Global Risk Engineering Leader, Alan McShane, these investments aren’t yet emerging onsite in the traditionally high carbon-emitting industry sectors.
| Base: All Respondents (450 natural resources companies) | 450 |
| We do not have a strategy | - |
| We are actively discussing our strategy, but it is not yet finalized | 18% |
| We have developed and documented a clear strategy, but have not yet begun to embed it in our business operations | 32% |
| We have begun to embed our strategy in our business operations | 37% |
| We have fully implemented our strategy and related monitoring and control measures | 13% |
Different natural resources sectors are at different stages of their clean energy implementation strategy. In our Global Clean Energy Survey 2025, where a sample of 450 natural resources companies shared their clean energy priorities and plans, most respondents are clustered in developing, documenting and embedding a clean energy strategy.
With just 13% at the fully implemented stage, it’s unsurprising that a majority of clean energy investments are yet to be visible onsite. There are significant pressures acting on decision-makers, with geopolitical headwinds, trade tensions, macroeconomic volatility, supply and demand dynamics, and stakeholder pressures all intensifying. The cumulative effect is that the natural resources industry is at a tipping point. The need for a low-carbon economy remains fundamental to achieving the decarbonization targets set out in the Paris Agreement, but shorter-term pressures to protect and grow revenue streams through traditional oil, gas, chemical, mining and power processes, plus the increased focus on energy security are pulling decision-makers in different directions.
Delaying decisions to invest in clean energy technologies could result in lost opportunities, reducing market share and ultimately profitability. For risk leaders, making informed data-driven decisions can enable businesses to take these investment decisions earlier and with greater confidence.
In a competitive industry, clean energy investments must have a demonstrable role in enabling the company to generate revenue.
The intricacies of what risk exposures mean will be unique to each natural resources company amid the clean energy transition – whether the organization is a small start-up enterprise right through to major multinational players.
While these nuances differ in the detail, major themes driving these risk exposures remain consistent:
Some new energy risks remain difficult to insure, but companies that take a proactive role in educating insurers about their risk profile often secure better terms.
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Developing economies are poised for growth as the clean energy transition gathers momentum. Latin America is rich in critical minerals that are fundamental to the manufacture of electric vehicles, and other developing economies around the world have ample opportunity for investment as part of clean energy projects. But new geographies can bring unanticipated and volatile risks.
Natural resources companies are reporting concerns on major risks to achieving their clean energy strategy.
Supply chains – ranked as the top risk faced by natural resources companies in the survey – are directly impacted by geopolitical risk and many other factors, such as climate risk and cyber. “Clean energy supply networks are still widely distributed across the world, despite the drive to nearshore or onshore supplies for critical infrastructure,” says Ana Maria Gomez, Latin America Leader, Natural Resources, Willis. “Renewable technologies are also highly dependent on rare earth minerals, produced in countries from China to Chile, Brazil and other countries across Latin America . This is a substantial economic opportunity for the wider Latin America region, but globally, any threat to trade to and from these countries could have a significant impact, delaying projects and increasing costs.”
Geopolitical risk ranked as the second-highest risk in the survey, which is a major driving factor in supply chain volatility. As trade tensions escalate in the U.S., and ongoing conflicts in Ukraine/Russia impact the cost and availability of trade to key nations around the world, businesses face a significant risk of business interruption and long-tail financial impacts to revenue. This, alongside escalating perils associated with war, political violence and terrorism, is putting geopolitical risks under the spotlight.
Climate and weather-related intermittency risk ranked as third and fourth in the survey. Established operations, both domestically and across supply chains – need to be fully assessed and quantified, but adding new projects can expose supply chains to new natural catastrophe and weather-related risks – particularly in new geographies. These new risks need to be built into the existing portfolio of risks, to truly understand how the dominos could fall.
Existing risk and insurance programs aren’t always designed to withstand volatility of new and expanding risks.
Risk engineering can deliver clarity on loss scenarios. Using robust data and analytical models, risk engineers model the most likely and estimated maximum loss (EML) scenarios faced by projects. By conducting risk surveys, testing existing risk controls and applying different scenario modelling, risk engineers can quantify key financial exposures. These insights can then be assessed against insurance market appetite to balance cost and coverage, to help strategic leaders make informed decisions about the affordability and value of clean energy projects in their value chain.
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Across the board, natural resources companies are planning to invest in new technologies in a big way, with carbon capture and storage (CCS) and battery energy storage solutions (BESS) pulling ahead as priorities in the next 5-10 years, followed shortly by biofuels.
These technologies can amplify risks such as non-performance, potentially leading to larger business interruption/delay in start-up impact, operational downtime, inability to service debt and disrupted revenue flow.
Against this backdrop, companies across the natural resources industry shared concerns that insurance coverage for new technologies is patchy, demonstrating a clear need for the insurance market to evolve in parallel as technologies develop.
For example, viewing clean energy projects as entirely prototypical can be problematic for natural resources companies looking to secure capital funds and insurance cover, but blanket prototypicality is limiting opportunities for insurers to build clean energy risks into their books. Insurance markets need robust risk engineering data and insights to make informed decisions. Until this is provided, managing these risks will involve leaning on retention and control strategies that need to be factored into the overall balance of cost and coverage.
Risk engineering can demystify prototypical technology. Not all aspects of new projects are prototypical. When examining the detail of project scopes, risk engineers are often able to identify which elements of the project are prototypical technologies, and which are well-established and well-known technologies. Technology risk needs to be considered through three lenses: if known technology is being deployed in traditional ways; if known technology is being deployed in new or different ways; or if new technology is being used. Articulating which elements of a clean energy project fall into these categories allows project owners, project sponsors and insurers understand the technical details of the technology risks without a blanket banner of prototypicality.
Once a good understanding of the project and the associated assets have been established, risk engineers can develop a series of loss scenarios both for the project assets and for the wider value chain. This will raise insights into potential losses to develop effective loss controls and mitigation strategies. These engagements will improve risk resilience and help project sponsors invest in projects with confidence.
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There are several reasons why companies fund clean energy projects from their balance sheet:
These factors can help to reduce some risks, but equally, internally funding a project will reduce companies’ capital liquidity, which leaves less in the pot to respond to other opportunities.
| Base: All Respondents | 450 |
| Debt financing (public or private) | 38% |
| Equity investment | 55% |
| Generating cashflow for investment | 66% |
| Infrastructure funds, development banks or other large investment institutions | 48% |
| Initial public offering (IPO) | 27% |
| Raising capital through divestment | 59% |
| Other | - |
| No clean energy initiatives in place | - |
Irrespective of the funding mechanism, companies still require clarity on project scope, benefits and value chain on technologies they are less familiar with.
Risk engineering helps natural resources companies protect their balance sheets as they fund clean energy projects in-house by systematically identifying, assessing, and mitigating risks throughout the project lifecycle, which reduces financial uncertainty and enhances project bankability. By implementing structured risk management plans that define risk tolerance levels, assigning accountability, using quantitative techniques to estimate impacts, and employing continuous monitoring to adapt to evolving risks, natural resources companies can reduce the likelihood of cost overruns, operational failures, and financing hurdles. With these measures, risk engineering can safeguard the company's financial health during the transition to clean energy investments.
Risk engineering is a critical component to a robust clean energy strategy. With data-driven insights, strategic leaders can understand how their clean energy strategy could tip the balance either way between the potential value delivered and the potential costs. Supported by sophisticated Risk & Analytics modelling, a data-driven approach ensures natural resources companies investing in clean energy can manage and transfer risks effectively, optimize financing structures, and maintain balance sheet strength amid the complexities of clean energy project development.
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