Three structural dilemmas have slowed progress in the energy transition: the inter-temporal dilemma -costs are immediate, but benefits are long-term and uncertain; the commons dilemma - costs are local, but benefits are global; and the competitiveness dilemma - early movers risk losing ground to less constrained peers. Together, these dynamics explain why collective ambition has consistently outpaced individual incentives.
These are among the findings of the latest INSEAD and BCG report, Delivering the Energy Transformation, launching today during the INSEAD Global Alumni Forum in Oslo. The report is a contribution to discussions among business, policymakers and civil society leading up to the next COP31, and is based on interviews with 40 top executives in the global energy sector.
Since the Paris Agreement, targets have multiplied, but policy, capital, and actual emissions reductions have not kept pace. The report argues that the transition must be treated as a multi-decade system transformation, one that requires different pathways for different regions, but a common global framework for carbon accounting, incentives, and institutional governance.
Key findings
The report points to two encouraging developments. First, the economics are increasingly compelling. A large share of emissions reductions can now be delivered at competitive cost, particularly in renewable power, electrification, and efficiency. The transition creates value, not just cost.
Second, energy security is reshaping the agenda. Geopolitical shocks have accelerated investment in domestic and resilient energy systems, beginning to loosen the traditional energy trilemma between sustainability, security and affordability.
But significant challenges remain. Large parts of the industrial economy still require long-term investment, coordination, and development. And as decarbonisation shifts from regulatory compliance to competitive dynamics, the role of business becomes decisive.
"Decentralised and uneven pathways do not imply stalled progress. Decarbonisation will continue – driven by economics, security, technology learning curves, and system resilience, often faster in practice than in plans”, said Pattabi Seshadri, Managing Director & Senior Partner and Global Leader of the Energy Practice at Boston Consulting Group.
Call to Action towards COP 31
The following are key calls to action ahead of COP31 based on the main findings of Delivering Energy Transformation. The energy transformation has entered the execution decade and now depends on implementation, resilience and collective action.
Business Leaders:
- Advance implementation with greater urgency
- Prioritise solutions that are ready to scale today
- Embed transition in business strategy
Policy Makers:
- Ensure policy durability
- Address systemic bottlenecks and remove frictions
- Support and incentivise early movers
A Shared Priority: Multiply impact through alignment
"The Execution Decade is an important next step towards a successful energy transformation as it outlines clear roles and responsibilities for the public as well as the private sector. And it highlights the value of partnership on our way to a sustainable future that respects the boundaries of our planet.” said André Hoffmann from the INSEAD Hoffmann Institute.
Implications for Business Leaders
The report calls on business leaders to separate signals from noise, distinguishing durable structural changes in the energy system from short-term volatility. To do so, it outlines three strategic priorities:
- Embed decarbonisation into core value creation, rather than treating it as a parallel agenda.
- Adopt a dual investment focus, scaling what works today while building next-generation capabilities for tomorrow.
- Engage actively with policymakers and test new market opportunities to shape the conditions for future competitiveness.
The report concludes that those who navigate this balance will accelerate the transformation and define their competitive position within it.
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