• 84% of energy CEOs are optimistic about mid-term growth, up from 72% in 2024.
• 65% rank generative AI as a top investment priority, though cybersecurity and ethics pose adoption barriers.
• 82% believe AI can accelerate emissions reduction and energy efficiency goals.

Confidence Rises Amid Market Volatility

Despite inflation, supply chain volatility, and shifting regulations, CEOs across the energy, natural resources, and chemicals (ENRC) sectors are increasingly optimistic about growth and technology-led transformation, according to KPMG’s 2025 Global Energy, Natural Resources and Chemicals CEO Outlook.

The survey found that 84% of CEOs are confident about mid-term industry prospects—up from 72% in 2024—driven by resilient demand for both fossil fuels and renewables, and growing investment in energy storage, smart grids, and carbon capture. Nearly eight in ten remain positive about their own company’s outlook, though concerns around inflation and trade volatility are tempering enthusiasm in parts of the chemicals industry.

M&A sentiment has shifted toward cautious pragmatism. Only 36% of executives expect to pursue “high-impact” deals this year, down from 58% in 2024, while 55% anticipate moderate deal activity—signaling a move toward measured expansion and capital discipline.

AI Becomes Central to Energy Strategy

Artificial intelligence has evolved from experimental pilot to board-level priority. Sixty-five percent of energy CEOs now rank generative AI among their top investment areas, up 12 percentage points from last year, with 72% planning to allocate between 10% and 20% of their budgets to AI initiatives in the next 12 months.

ROI expectations are accelerating: two-thirds of CEOs expect measurable returns within one to three years, compared with only 15% a year ago. Adoption is also expanding into agentic AI systems—capable of autonomous decision-making—where 51% of respondents expect transformational operational impacts.

Yet challenges persist. Ethical concerns (55%), fragmented data infrastructure (49%), and regulatory complexity (47%) continue to obstruct large-scale deployment. Cybersecurity threats remain top of mind: 64% of CEOs cite fraud, 59% worry about identity theft and data privacy, and 51% list cyberattacks as critical risks.

Talent Becomes the Next Frontier

As AI reshapes operations and accelerates automation, talent strategy has become an existential priority. Forty percent of CEOs are reskilling and upskilling roles impacted by AI, while 31% are tailoring training to bridge generational gaps across technical teams. Only 18% of firms currently provide AI education enterprise-wide, leaving a significant capability gap.

To close it, nearly three-quarters of CEOs are prioritizing retention and retraining programs for high-potential talent. However, 43% still identify skills shortages as their biggest barrier, particularly across engineering roles in oil, gas, and mining. Competition from technology firms offering higher salaries and flexible conditions is compounding the challenge.

The findings suggest that human capital, not hardware, will determine the pace of digital transformation. Companies that combine AI fluency with workforce adaptability are likely to lead the sector’s next phase of productivity and decarbonization.

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AI’s Expanding Role in Climate and ESG Strategy

With climate disruption and regulatory scrutiny intensifying, energy leaders are positioning AI as a tool for operational resilience and sustainability. Twenty-seven percent of CEOs now cite climate-related risks as a defining factor shaping business strategy—more than in any other industry surveyed.

While 62% are confident in meeting 2030 net-zero goals, only 38% fully integrate ESG metrics into capital allocation, and more than half admit their sustainability plans fall short of stakeholder expectations. Still, momentum is building around AI’s role in advancing ESG performance.

Eighty-two percent of CEOs believe AI can directly reduce emissions and optimize energy use through predictive grid management, real-time monitoring, and efficiency analytics. Nearly three-quarters see its potential to enhance climate-risk modeling and inform investment decisions. Governance, however, remains a weak link—only 26% express strong confidence in their ESG oversight structures.

Nonetheless, 79% of respondents say AI will improve sustainability-related data quality and disclosure reliability, a crucial step as investors and regulators demand more verifiable reporting.

The C-Suite Takeaway

The 2025 outlook reinforces a decisive shift in how the energy sector views growth and resilience. CEOs are rebalancing short-term caution with long-term conviction, investing in AI and human capability as twin engines of transformation.

As AI’s potential expands—from grid optimization to predictive maintenance and climate analytics—governance and transparency will determine whether the technology accelerates or undermines corporate sustainability goals.

For global investors and policymakers, the message is clear: the energy transition is no longer just about fuel choices. It’s about data, intelligence, and the human capital capable of steering both toward a low-carbon, digitally enabled future.

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