CEOs Harness AI for Sustainable Growth and Net-Zero Goals

Energy, natural resources and chemicals (ENRC) CEOs are leaning into AI as a lever for decarbonisation, productivity and resilience, with confidence in the sector’s medium-term trajectory climbing sharply, according to KPMG’s 2025 Global ENRC CEO Outlook.

Executives report improving sentiment despite persistent geopolitics, inflation and regulatory flux, while zeroing in on supply chain resilience, AI integration and the mounting effects of climate and environmental risks as the biggest near-term decision drivers.

The outlook shows momentum building at an industry level even as leaders remain pragmatic about their own enterprises. The report says: “84% of CEOs are confident in industry growth compared to 72% last year (2024).”

Changing CEO confidence 

Underpinning that optimism: persistent demand for both fossil fuels and renewables, and innovation in storage, smart grids and carbon capture. Confidence at the company level has eased slightly, with 78% positive on their own growth prospects versus 82% in 2024.

“In uncertain times, ENRC companies are looking to balance growth with cost efficiency, satisfying rising energy demand whilst managing the transition to cleaner energy resources,” says Anish De, Global Head of Energy, Natural Resources and Chemicals, KPMG International, in the report.

That balancing act is reshaping capital agendas. Over the next three years, ENRC firms appear to be moving away from blockbuster M&A toward more selective transactions that sharpen capabilities and rebalance risk.

“Just 36% of CEOs expect to pursue ‘high-impact’ acquisitions in 2025, down from 58% in 2024, while 55% anticipate ‘moderate’ deal activity, a rise from 38% last year,” the report says.

AI moves from pilots to platform

The strategic priority transforming the sector most decisively is AI. KPMG’s data shows that 65% of CEOs now rank generative AI as a top investment area, a 12% increase from last year, and 72% plan to allocate 10–20% of budgets to AI over the next 12 months.

Gillian Morris, Lead of Global Chemicals KMPG International, says in the report: “When it comes to AI, companies should design a suitable governance framework over how they use AI agents and data, to ensure they stay aligned with ethics and international law."

Confidence in payback is rising quickly: 66% of CEOs expect returns from AI investments within one to three years, up from 15% in 2024.

The report says: "The shift from GenAI to Agentic AI is accelerating digital transformation, with more than half (51%) of ENRC CEOs expecting Agentic AI to have a significant or transformational impact, notably in operational and workforce efficiency.”

Shreyansh Upadhyay, Lead of Global AI for ENRC KMPG International, says: “AI is fundamentally reshaping the oil and gas sector by unlocking transformative gains in productivity, accuracy and efficiency across both core operations and enterprise functions."

“From optimising drilling and reservoir performance to maximising profitability in refining and renewable assets and streamlining supply chains and finance, AI empowers faster, data-driven decisions that reduce risk and drive sustainable value.

“It’s not just automation, it’s the foundation for smarter, more agile and future-ready operations.”

Leaders are clear-eyed about the hurdles to scaling AI:

• Ethics concerns: 55%
• Fragmented data systems: 49%
• Regulatory complexity: 47%

“Geopolitics has a major influence on ENRC companies, who must navigate varying regulatory environments around the world, with differing appetites for the energy transition,” says Jonathon Peacock, Lead of Global Oil and Gas KPMG International.

“CEOs need to balance investment in fossil fuels and renewables and keep projects economic throughout their life cycle.”

Sustainability moves from responsibility to strategy

Sustainability is embedding into core business planning, capital allocation and operating models. KPMG’s data shows that 72% of CEOs say that sustainability is embedded in their corporate strategy.

Mike Hayes, Lead of Global Climate Change, Decarbonisation and Renewables at KMPG International, says: “Energy and the energy transition remain absolutely critical to the sustainability and climate agenda."

“Access to renewable electricity, in particular to help meet growing data centre demand, requires significant upgrades of grids and an easing of permitting in regions like Europe to get projects off the ground.

“This calls for collaboration between corporates and government.”

However, execution gaps persist. While 62% of CEOs express confidence in meeting 2030 net zero targets, more than half concede their ESG strategies lag stakeholder expectations.

Leaders see AI as a critical accelerator: more than 4 in 5 (82%) believe AI can reduce emissions and optimise energy use, and roughly 74% say it can strengthen climate risk analytics to better model future scenarios.

For ENRC executives, the leadership mandate is clear: align disciplined capital deployment with robust AI and data governance; connect digital transformation to measurable decarbonisation; and build resilient portfolios that can absorb geopolitical and regulatory shocks - turning pilots into performance, and strategy into sustained value.