Energy enterprises call for transition planning across sectors

The long-term direction of the energy transition and broader sustainability has not changed. At HFS, we often discuss the importance of transition planning and the unchanged future of sustainability. After recently attending Sustainability LIVE in London, which focused on decarbonization, a series of energy enterprise leaders reinforced this message: Transition planning is no longer optional—it’s key for competitiveness, resilience, finance, and long-term value—whatever your sector.

Transition planning is a competitive differentiator that helps you see beyond geopolitical and industry turbulence

A large European energy company posed a fundamental question: How much intrinsic motivation exists in industry and commercial sectors to move beyond regulatory requirements? (see our own detailed take here.) Many organizations rightly see most geopolitical rhetoric and short-termism as noise, believing that the underlying direction of the energy transition remains unchanged. Others, however, still see transition policies as a burden, even as governments attempt to streamline regulations. The winners will be those that embrace technologies (separating the ‘cool’ and ‘pragmatic’ tech) with a clear roadmap that aligns their internal strategies with external realities.

A major industry body highlighted the evolving role of hydrogen—whether as a buffer for intermittency, a zero-emissions transport fuel, or a process fuel for industrial applications. But these emerging, often turbulent trends require structured transition plans that address cost, regulation, and technological readiness in close collaboration with governments and the whole value chain your organization currently and in the future will plug into.

A leading transmission and distribution operator noted a 42% increase in demand for grid connections last year and a 28% increase in generation capacity. Over the next decade, they anticipate integrating five to nine million new EVs and one to three million heat pumps in the UK while ensuring grid resilience.

The company acknowledges it doesn’t have all the answers, but it is putting capital behind solutions, including a £500 million venture capital fund to inject new technologies into the sector. It also recognizes the importance of transition planning: the interdependencies between policy, technology, and investment need ecosystem-wide collaboration.

Energy security, finance and beyond—transition planning aligns priorities

A global energy services giant stressed that transitioning to a ‘self-serve’ energy model is now a business and policy imperative, given gas price volatility and supply chain disruption. Successful transition planning must realize what can be achieved today and what will have the most material near-term impact and integrate the long-term global trajectory.

A professional services firm noted that the capital that flowed into sustainability investments during the pandemic, particularly into infrastructure funds, did not deliver expected returns. Perception and a lack of transition planning were fatal flaws. Many firms viewed sustainability investments through a business-as-usual lens, expecting the same results they’d become accustomed to in traditional short-term shareholder value maximization efforts.

The equation has changed. Energy security concerns following geopolitical upheavals, including Russia’s invasion of Ukraine, have reinforced the necessity of transitioning from fossil fuels. The financial sector understands this long-term direction, and that stranded assets are inevitable: the question is when, not if.

Clear, dynamic transition planning provides visibility to investors, enabling them to assess progress against their own long-term mandates—connecting sustainability to value. The financial sector must help its clients and partners build and execute transition plans in the absence of adequate regulation.

Keeping transition planning realistic and actionable

A transition plan isn’t a one-off document—it’s a living framework that must evolve with changing technologies, policies, and financial conditions. The Carbon Trust talked conference attendees through its recently released Greenprint, which underscores the importance of a bottom-up approach to energy transition.

This adaptability was finally echoed by a senior stakeholder in the defense sector, of all places. The defense sector recognizes the importance of sustainability while remaining clear on its ultimate priority of security. Sustainability is not viewed as a trade-off. Resource efficiency, energy resilience, and operational sustainability can all provide strategic advantages. The same goes for anticipating the future global dynamics of conflict, aid requirements, resource scarcity, and migration.

The Bottom Line: Organizations that build and execute transition plans gain a platform for resilience, competitive advantage, and long-term sustainability and value.

Successful transition planning requires:

• A clear link between sustainability, financial value, and incentives throughout the organization
• A strategy aligning internal and external system dynamics
• ‘Live’ updates to reflect technological and regulatory changes
• Transparent communication with stakeholders to build trust and credibility

Organizations that build such transition plans will lead the coming decades. Policymakers, consumers, and businesses will reward and look to them as examples in their own transitions.