Introduction

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Sustainability is more than Net Zero; it is a strategic imperative that can drive business value for organizations across industries. Sustainability ranges from new business models, assets and infrastructure – think powering grids and vehicles with low carbon energy, to reinventing existing products – like optimizing product design with greener materials, or improving resource efficiency to reduce cost. Most companies consider it critical to maintaining market share (54%). More practically, it is also a route to ESG incentives (37%) and regulatory compliance (48%), and to a good reputation with customers and investors (53%)(see Chart 2).

Recent research from the Capgemini Research Institute ^[16]revealed that 62% of organizations invest in sustainability initiatives primarily because of the associated cost benefits. These expectations are particularly high in areas such as waste reduction, water and energy consumption, and transportation and supply chain costs.

Global engineering leaders believe the clock is ticking for them to become more sustainable. In our recent Engineering Trends report, 84% said that

sustainability demands will transform their industry within five years, necessitating dramatic changes to how things are done (see Chart 1).

Engineering is critical because it transforms fundamental science into commercially viable, sustainable technologies – technologies that can be integrated at scale into the products and processes of industrial leaders. Doing so holds significant potential for companies to achieve cost savings.

The International Energy Agency (IEA) reported that without engineering advancements over the past five years, the increase in CO_² emissions would have been three times larger than observed. Engineering companies will be the heroes of the green revolution.

But knowing exactly what strategy to pursue in any of these areas is hard in a volatile world and, unsurprisingly, engineering leaders see significant risks that could derail their best laid transformation plans. In this report, we will explore three in particular: the supply of critical materials, the availability of the technologies they need to decarbonize, and skills shortages (see Chart 3).