In a year defined by economic volatility and accelerating digital transformation, the 2025 KPMG Global Energy, Natural Resources and Chemicals (ENRC) CEO Outlook reveals a sector increasingly confident about its medium-term prospects and increasingly reliant on artificial intelligence (AI) to achieve both growth and sustainability. According to the report, 84% of energy CEOs are optimistic about their industry’s three-year outlook, a sharp rise from 72% in 2024. This renewed optimism reflects strong energy demand across both fossil and renewable sources, rising investment in energy storage and carbon capture, and a pragmatic shift toward digital efficiency in an era of climate accountability.

Confidence Rises as CEOs Navigate Uncertainty

Despite inflationary pressures, supply chain disruptions, and volatile commodity markets, most executives in the ENRC sectors see resilience taking hold. The report highlights that nearly eight in ten CEOs remain positive about their company’s near-term trajectory, buoyed by resilient demand, policy incentives, and an improving outlook for green infrastructure. However, M&A activity is expected to moderate. Only 36% of executives plan to pursue high-impact deals this year, down from 58% in 2024, with most preferring measured, strategic acquisitions that prioritize capital efficiency over rapid expansion. This cautious optimism signals a new corporate maturity one that balances short-term financial discipline with long-term innovation and sustainability.

Artificial Intelligence Moves from Pilot to Core Strategy

What was once a boardroom experiment has now become a board-level imperative. The KPMG survey finds 65% of energy CEOs ranking generative AI among their top investment priorities, a 12-point increase from last year with nearly three-quarters planning to allocate 10–20% of their total budgets to AI initiatives in 2025. The technology’s value proposition is shifting rapidly from experimentation to measurable results. Two-thirds of CEOs expect financial or operational returns within one to three years, compared to just 15% in 2024. Meanwhile, 51% of executives believe agentic AI systems capable of autonomous decision-making will drive transformational impacts across production, trading, and grid operations. Still, challenges remain. Ethical concerns (55%), fragmented data infrastructure (49%), and regulatory uncertainty (47%) continue to slow large-scale deployment. Cybersecurity also tops the list of CEO anxieties, with 64% warning of fraud, 59% citing data privacy concerns, and 51% naming cyberattacks as a critical risk to business continuity. KPMG’s analysis underscores a defining shift: AI is no longer viewed as a standalone innovation but as the operating system of the energy transition enabling predictive maintenance, efficiency optimization, and intelligent emissions management at industrial scale.

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Talent and Human Capital: The Deciding Factor

As AI adoption accelerates, the energy workforce faces its own transformation. Forty percent of CEOs are already reskilling or upskilling employees affected by automation, while 31% are redesigning training programs to bridge generational and technical divides. Yet only 18% of firms have rolled out enterprise-wide AI education, leaving a significant skills gap. Nearly three-quarters of executives are prioritizing retention and retraining for high-potential talent, but 43% still identify skill shortages especially across engineering, digital systems, and data analytics as a primary barrier to transformation. The competition for tech-savvy talent is intensifying, with technology firms offering higher pay and flexible work conditions, drawing engineers away from traditional energy companies. KPMG’s findings suggest that human adaptability not hardware will ultimately determine the pace of digital and decarbonization success.

“Energy companies that combine AI fluency with workforce agility will define the sector’s next phase of productivity and sustainability,” the report notes.

AI as a Driver of Climate and ESG Impact

Amid rising regulatory expectations and climate risk, AI is emerging as a powerful enabler of ESG performance. Eighty-two percent of energy CEOs believe AI can directly accelerate emissions reduction and energy efficiency through predictive grid management, smart resource allocation, and advanced analytics. Another 73% see AI enhancing climate-risk modeling and improving capital allocation toward low-carbon projects. However, only 38% of companies currently integrate ESG metrics into investment decision-making, and just 26% express strong confidence in their governance structures for ESG oversight. KPMG’s report calls this “the next maturity test” for the energy sector ensuring that the use of AI in sustainability initiatives remains transparent, accountable, and ethically grounded. Encouragingly, 79% of CEOs believe AI will improve the quality and reliability of sustainability data, a critical requirement as investors and regulators demand more credible climate disclosures.

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Strategic Implications: Data, Governance, and the New Energy Equation

The 2025 Outlook paints a clear picture of an industry in transition balancing caution with conviction. CEOs are betting on technology and talent as twin levers for resilience, productivity, and emissions reduction. Yet governance, cybersecurity, and workforce readiness remain decisive challenges. For policymakers and investors, the message is unequivocal: the energy transition is no longer just about fuel sources, it’s about data intelligence, operational transparency, and human capability. AI has become the connective tissue between commercial growth and climate action, allowing companies to optimize grid performance, predict maintenance needs, and monitor carbon in real time. The firms that integrate AI not just as a tool but as a strategic mindset are likely to define the next decade of industrial innovation.

In KPMG’s words, “AI is reshaping not just how energy is produced, but how value, trust, and sustainability are built.”

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