This is part two of my epic dispatch from The Economist Impact’s 10th Sustainability Week in London, focusing on the Energy Transition Summit, a gathering of leaders, disruptors, and policymakers tackling the planet’s toughest problems. While part one detailed the harsh reality that we’re still not moving fast enough on emissions, this second installment cuts deeper: uncovering what’s truly blocking the road to real change.

Short-term profits, slow-moving regulations, and cautious politics are proving the biggest obstacles to the energy transition. Instead of decisive action, companies and governments are caught between urgent climate goals and the comfort of the status quo. Capital keeps chasing shiny short-term wins, while the heavy lifting gets left behind.

The Economist’s 2nd Annual Energy Transition Summit: the chairs are comfy, the reality isn’t. *Photo: DI/MM*

The energy sector is at a crossroads. Nuclear, once feared, is re-emerging as an unlikely hero, but its growth is hamstrung by politics and outdated financing models. AI promises revolutionary efficiency yet gobbles up electricity faster than grids can handle. Electrification, crucial for clean growth, risks collapsing under infrastructure bottlenecks and half-hearted policy support.

My report goes into these tensions head-on. It’s about confronting why the path to sustainability is so tangled, and why collaboration across nations, industries, and consumers is the only way we’ll break through.

This deep dive is 7,000+ words, so you can use the table of contents on the left to jump between topics (if you’re reading online), and if you download the Substack app, you can listen to a narrated version of this feature.

— Read part one, Sustainability 🌍 The truth still hurts, before you start this piece.

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1. Oppenheimer’s new Manhattan Project

For Charles Oppenheimer, the nuclear debate is personal. As the grandson of J. Robert Oppenheimer, he grew up with a deep awareness of nuclear weapons and the global tensions they created. But in recent years, his focus has shifted. “I started thinking about the climate problem and wondered, if we were really serious about this, what would a Manhattan Project-level effort to solve it look like?”

What he found surprised him. The anti-nuclear sentiment he had absorbed over the years didn’t match the data. “I was shocked that my perceptions were so far off. It was a kind of media narrative that I had heard, that nuclear power was dangerous, terrible, had killed so many people. None of that was true.” That realisation turned him into an advocate, not just for nuclear energy, but for its potential to foster global cooperation.

Nuclear power is experiencing a shift in public perception. At COP28, a dozen countries committed to tripling nuclear capacity, while China continues to expand its fleet at record speed. Oppenheimer sees this as inevitable. “The consensus comes from engineering and science. It’s math. We cannot really get to where we need for an actual transition without it.”

The challenge, he argues, isn’t technical: it’s financial and political. “If we’re serious about reducing fossil fuels, we need to use the most powerful form of energy we have. The question becomes, how do you finance it? How do you make it happen?”

A key debate in the nuclear industry is whether to push ahead with existing large-scale reactors or wait for newer technologies like small modular reactors (SMRs) and fusion. For Oppenheimer, the answer is clear. “If you look at the number of projects being built, they’re all large light-water reactors. Those are actually perfectly safe systems with the best energy economics.”

While SMRs and advanced reactors may play a role, he warned against delaying action. “There is no question that they’ll work, but nothing counts until they’re in operation. The worst thing we can do is wait five or ten years for new systems while demand for energy is soaring.”

Fusion, meanwhile, remains a distant hope, as Oppenheimer remains sceptical about its near-term viability. “It doesn’t produce as much electricity as the first reactor in 1952.”

Oppenheimer believes the biggest barrier to nuclear isn’t technology, but economics. “It’s very hard to financially justify, especially with market dynamics. Even a conventional industrial loan of 30 years is too short.”

Yet, he sees an opportunity. “With today’s investment tax credits and loan programmes, you can justify the equity investment. But the best way to get costs down is repetition: build the same project, same design again.”

He points to China as proof. “That project in Georgia was supposed to be $14 billion, it came in at $34 billion. Meanwhile, China is building that same size project for $5 billion.” It’s not an inherent problem in the technology, it’s that we’ve been bad at building it.

One of the biggest criticisms of nuclear energy is waste disposal. Oppenheimer argues that the fear is overblown. “There hasn’t been a single energy injury from nuclear waste in the entire history of nuclear energy.” “The simple answer is that nuclear waste, stored on-site, is a pretty good solution for the next 1,000 years. If you want to, you can bury it underground.” So this idea that it’s some insurmountable danger, it’s just not true.

An audience member posed a final question: “What would it take to replace all coal-based electricity in India and China with nuclear?” Oppenheimer’s response was blunt: “Commitment.” Coal for nuclear: you take the plants already connected to the grid and swap them out. If those governments decided to do it, it would happen.

For him, the obstacles to nuclear expansion are not insurmountable. They are choices. If we don’t move forward, it’s because we’ve chosen not to. But in the long run, the cost of waiting will be far higher, Oppenheimer argued.

2. Power struggle: Feeding AI’s hunger

AI demands huge energy consumption. So does its potential outweigh its carbon footprint? *Illustration: Google ImageFX/MM*

AI’s meteoric rise, sparked by breakthroughs like ChatGPT, poses an urgent challenge: how do we power this revolution sustainably? While the world races ahead with generative AI, fuelled by unprecedented investments and dizzying valuations, the power required to run these data-hungry systems is soaring. The question is no longer just how smart AI can get, but how we’ll sustainably keep the lights on.

Philip Meier of L.E.K. Consulting set the stakes clearly: with AI’s explosive growth, energy use by data centres could rise “three to six times over the next 10 years,” creating a potential crisis if unchecked.

Max Beverton-Palmer from NVIDIA highlighted that semiconductors have achieved a “100,000 times improvement in energy efficiency over the last 10 years,” showing how tech innovation could temper AI’s thirst for power.

Lucy Yu, CEO of the Centre for Net Zero, acknowledged short-term demand spikes but saw them as solvable, noting “the real challenge at the moment isn’t about the supply to power these data centres,” but instead “around regulation, permitting, and speed of grid connections.” Yu believes in the potential for data centres to actually aid grid flexibility, helping integrate renewables.

Andrew Murdoch of Newcleo sees advanced nuclear as perfectly suited for AI’s energy needs. He noted a “perfect synergy” between nuclear plants and data centres, with both requiring similar infrastructure like grid connections. Co-locating nuclear and AI infrastructure could deliver power “far lower [priced] than available from the grid,” making a compelling case for new modular nuclear reactors (SMRs).

Jeffrey Donovan from the International Atomic Energy Agency (IAEA) confirmed strong global interest in nuclear, highlighting that “countries hosting data centres are contacting us, asking how to set up nuclear power programmes,” seeing nuclear as a strategic energy source for future demand.

Yet, they agreed the transition won’t be immediate. Yu cautioned that “realistically, we’re unlikely to see new nuclear sooner than a 10-year time horizon,” making renewables crucial to bridging the gap. Rob Owen from Softwire added that renewables, coupled with smarter market design like dynamic pricing and demand flexibility, are essential to balancing short-term demands.

But is AI’s energy impact justified? Yu cited DeepMind’s AlphaFold, saving “around a billion years of alternative research,” showcasing AI’s potential to vastly offset its own energy footprint through efficiency gains in critical fields like medical research and climate tech.

Ultimately, they agreed the key is not choosing nuclear over renewables, but deploying them together, harnessing AI’s power smartly and sustainably, while urgently reforming regulation to match the rapid pace of technological progress.

3. The race to modernise infrastructure

High voltage, low capacity: The grid limit

Everyone wants a cleaner, electrified future. But while EVs, heat pumps, and renewables surge ahead, the grid is creaking under the weight of outdated infrastructure and soaring demand. Can we scale up fast enough, or are we about to hit a hard limit?

Markus Heimbach, EVP at Hitachi Energy, highlighted the scale of transformation: “By 2050, 50% of the energy will be supplied by electricity, while by 2020, we had some 20%.” This shift, he explained, is driven by the need to “integrate the renewables, but on the other hand, to supply the electricity to heat pumps and to electric vehicles.” However, the grid is ageing.

Moderator Vijay Vaitheeswaran noted: “The grid in Western Europe is, on average, 40 years old. In France, 50 years old.” Heimbach agreed that massive investment is needed in both distribution and high-voltage infrastructure.

A key challenge is the shortage of transformers and high-voltage switchgear, which require extensive investment and training. But another issue is sulphur hexafluoride (SF₆), a widely used but highly potent greenhouse gas. Heimbach explained: “It has a greenhouse global warming potential of 25,000 years.” While SF₆ accounts for only 0.6% of global warming, he compared its impact to aviation: “It is basically the same amount as 1/4 of the pollution of the overall aviation industry.”

Hitachi Energy has developed a replacement gas that reduces “more than 99% of the carbon footprint of the gas.” However, the cost is still a challenge: “Price is always a question of demand and supply.”

Austrian Post is making major progress in electrification. EVP Andreas Thöni shared: “5,000 out of 10,000 vehicles already” are electric, with plans to fully electrify by 2030. But fluctuating electricity prices are a problem: “The whole price point that we’ve seen, electricity being very fluctuating on the stock markets, is a challenge.”

Charging logistics also pose difficulties. Vaitheeswaran described a port in Long Beach, Los Angeles, where an electric truck fleet faced bottlenecks: “It takes an hour and a half to charge… Sometimes 16 trucks will come in, and there’re scrambling for the charge points.”

Meanwhile, Karsan CEO Okan Baş argued that autonomy is an economic necessity: “Nobody wants to be a driver anymore.” Karsan’s electric buses have operated “more than 100,000 kilometres” in Norway, and Baş was surprised by how quickly passengers accepted them: “We were afraid that there will be a big safety reaction from the customers, right? But it didn’t go that way. It was much more faster, the consumer confidence we gained.”

Kraken’s Transformation Director, Nina Möger, explained that outdated tech is holding utilities back: because most utilities, most energy companies, struggle with their tech stack. She described an extreme case where a company relied on runners and fax machines to process customer queries: “They have runners who would then pick up the note and run into the central system where they would fax the question down to a sort of a back office who had access to the mainframe.”

AI and machine learning can help optimise energy demand, but Möger cautioned: “AI is important and plays a really important role in optimisation and in prediction, but… you actually need to have the capabilities in-house.”

Cross currents: The interconnectors solution

Interconnectors, subsea cables linking electricity grids, are transforming Europe’s energy security, cutting carbon and stabilising prices. These cables move electricity between countries, sending power where it’s needed most at the lowest price.

Rebecca Sedler, Managing Director of Interconnectors at National Grid Ventures, laid out why they’re a game-changer: “We provide just under 8 gigawatts of power… and they are highly flexible assets that can shift direction in seconds.”

The UK’s first interconnector, built in 1986, linked to France. Today, National Grid operates six cables connecting to five countries, with the longest subsea link in the world now running to Denmark. The benefits? “If we weren’t importing from Europe, we would be running marginal gas.” That means cheaper, cleaner electricity, and in the 2030s, the UK aims to become a major exporter of wind power.

But keeping the lights on takes more than cables, it takes coordination. Sedler shared a real-world example from January 8, when the UK faced tight electricity margins. “We had planned maintenance on the Viking Link… we managed to stand down the maintenance in a safe way and divert power to the UK.” Thanks to real-time cooperation with the Danish grid, power kept flowing, proving interconnectors can be lifelines.

Looking ahead, Sedler predicted the North Sea will become an energy superhub. “We’re going to see huge platforms in the North Sea connecting different countries.” These hubs could combine offshore wind, battery storage, and hydrogen production, cutting costs and easing pressure on coastal communities.

Brexit complicated UK-Europe energy ties, but Sedler sees momentum shifting: “Over the last few months, the UK and Europe have seen they have much more important things to cooperate on.” However, policies like the EU’s carbon border tax on UK electricity exports from 2026 could disrupt trade unless better agreements are struck.

Some critics argue interconnectors push up energy prices in exporting countries, but Sedler dismissed this: “The marginal cost of wind [energy] in this country is going to be zero.” As the UK ramps up wind power, surplus electricity will drive prices down, both at home and abroad.

Interconnectors are already proving their worth. “For decades to come, we’re going to see benefits.” The challenge now? Scaling up fast enough to keep up with demand.

4. Power play: Fixing renewable energy

Batteries are no longer a backup plan: from grid-scale storage to solar-plus-battery microgrids, they’re turning wind and sun into 24/7 power. Illustration: Google ImageFX/MM

Beyond lithium: Batteries electrifying clean energy

Batteries aren’t just getting cheaper, they’re revolutionising how renewable energy can scale. According to Camilo Serrano of Atlas Renewable Energy, plunging battery prices have created a “battery rush” comparable to a “gold rush,” especially in markets like Chile. Costs have dropped by “90% in the past 10 years,” making solar-plus-battery solutions financially compelling for large industrial customers. These systems, Serrano said, deliver round-the-clock power at prices “around $50 per megawatt-hour,” dramatically increasing the appeal and reliability of renewables.

Felipe Hernández from Fotowatio Renewable Ventures explained how batteries have enabled entirely new business models: “We can now do a PV-plus-storage project with lower capital expenditure than PV alone five or six years ago.” This shift means renewable energy firms can offer sophisticated, customised solutions rather than just intermittent power. A prime example is serving energy-intensive data centres, where grid connection delays and huge power demands have created a pressing need for tailored solutions, like “private networks” combining solar, batteries, and minimal gas as backup, eventually transitioning to hydrogen or ammonia.

Batteries are also extending their value beyond first-use applications. Frank Spennemann from Mercedes-Benz Mobility shared insights on reusing EV batteries for stationary storage, a field now showing remarkable potential. At Mercedes’ joint venture “10 Base,” recycled EV batteries have been repurposed into large stationary units providing grid stabilisation. After eight years in operation, Spennemann notes battery degradation has been minimal: “We don’t see any, we haven’t had one cell where we had to say we have to get rid of that battery.”

Yet, despite technological progress, barriers remain. Spennemann admits that vehicle-to-grid (V2G) solutions, where EV batteries feed back into the grid, face industry scepticism. Although technically feasible and increasingly attractive to customers, automotive manufacturers are cautious due to fears about battery lifespan. However, Spennemann is optimistic: “In two years, we will have commercial offers in the market.”

Batteries are breaking down old barriers. They’re flipping intermittency from a liability to a launchpad for new business models.

Smart money: AI is smoothing rough edges

Wind and solar power may be booming, but their unpredictable nature leaves grids scrambling and customers paying. Julian Lennertz, Chief Commercial Officer at E.ON Next, believes the solution to intermittency lies in empowering customers directly: “We are putting our customers first. We are building the smart and best flexible tariffs.”

E.ON is already demonstrating the potential of these customer-focused tariffs in Australia, where Lennertz said people using AI-driven pricing models are “really earning money.” Now the company is bringing similar trials to the UK, collaborating with technology providers like Kraken and Amber to test whether this customer-centric, tech-enabled approach can help solve Europe’s persistent energy affordability crisis.

But there’s no sugar-coating the challenges ahead. Lennertz openly acknowledges the severity of the current situation: “Nowhere is energy as expensive as UK, Europe.” Rising energy costs have left vulnerable households buried under debt, particularly in the UK, prompting E.ON to trial radical interventions in Coventry, where “customers who are really struggling with paying the bills… get a heat pump or battery for free.”

Yet, as Lennertz makes clear, infrastructure and regulatory hurdles remain stubborn barriers to faster progress. While praising the UK’s advanced smart-meter rollout, he contrasts it sharply with his home country of Germany, which is lagging significantly behind. “I’m from Germany…they have nearly zero smart meter roll out,” he said, highlighting the urgency for nations to accelerate their infrastructure readiness to support smart-energy solutions.

Households must understand and embrace the benefits. AI-driven smart tariffs, free heat pumps for struggling families, and improved battery storage are just the beginning. Lennertz’s message is clear: empower the customer, and renewable energy’s greatest challenge could become its strongest asset.

5. People power: Can we drive the energy grid revolution?

As electric vehicles, heat pumps, and smart home energy systems go mainstream, the way we consume electricity is changing fast. But can a consumer-driven grid improve resilience and affordability, or will it push energy markets into chaos?

Devrim Celal, Chief Marketing and Flexibility Officer at Kraken, argued that the current system is stuck in the past. “We still run the system based on peak load,” he said, describing how grids are built for extreme spikes in demand, even if they only happen once a year. “In the UK, one of the case studies we talk about is the FA Cup half-time, when everybody goes to their kitchen, flicks on the kettle to have a cup of tea.”

This rigid approach, he explained, leads to overbuilt and underused infrastructure. Instead, AI-driven flexibility could shift energy use away from peak times, reducing costs and emissions. “We have to build a consumer-centric system.”

Kraken’s solution is simple: automation. “Nobody wants to be an energy trader,” Celal said. “They just want cold beer and hot showers.” Kraken’s smart tariffs allow EV owners to schedule charging at the cheapest and greenest times. “You just tell the app, ‘I want my car charged to 80% by 7am,’ and that unlocks nine to 14 hours of flexibility,” he explained. Consumers benefit from massive cost savings, charging at two pence per mile instead of 20.

The biggest barrier though is trust. “The utility industry has not always had the best relationship with its consumers,” Celal admitted, referencing surveys where utilities score poorly on public trust. “We have to give consumers really simple, transparent propositions, but always give them control.” Kraken includes an override button that lets users charge immediately if they choose.

Scaling flexibility is no longer theoretical. Kraken already manages 1.6 gigawatts of flexible power daily, the equivalent of “one or two nuclear power plants.” But regulation is a challenge. “The whole world in energy is designed to operate a generation-based system,” he said. “Its incentives are for big power generators, not for consumers to participate.”

On AI’s surging energy demand, Celal sees an opportunity. AI training models can be delayed, optimised, or run in locations with abundant renewable power. Meanwhile, heat from data centres could be repurposed for district heating, though he noted, “I’ve not seen it at scale anywhere yet.”

The energy transition, Celal argued, is about making smart systems work for consumer. And the answer lies in using AI to optimise energy use, not just consume more of it.

6. Capital crisis: Finance is still failing the energy transition

Investors are still drip-feeding funds into the energy transition, just as the planet’s demands are accelerating. *Illustration: Google ImageFX/MM*

Short-sighted profits: Missing the big picture

Climate investing is caught in a dangerous contradiction: chasing quick wins on carbon emissions is diverting money from the real long-term solutions needed for meaningful energy transition.

John Cook, Senior Vice-President at Mackenzie Greenchip, sees a critical gap emerging: “Our world is so obsessed with financialised schemes and short-term investing that we really aren’t getting enough capital to energy transition.”

Cook argues clearly that markets are rewarding the wrong strategies. Investors chasing ESG-friendly benchmarks inadvertently prioritise “low-carbon investing” over genuine “energy transition investing,” and he warned these “couldn’t be more different.” Low-carbon investing looks good on paper today but starves critical infrastructure and innovation needed tomorrow. The result? “We’re going to end up in a climate trap,” he cautioned.

Complicating the picture is the turbulent US political environment. Cook is blunt about the scale of disruption from “the orange man in the south” (he’s Canadian). He described the US election’s market implications as having “turned our world upside down.” The ripple effects are already reshaping how Canada manages its energy exports to its southern neighbour: “If we stop [shipping green electricity to the US], it would be replaced with natural gas and coal.”

Despite these hurdles, Cook is confident in the underlying logic of transition investments, especially given the recent market dip. With sentiment low and valuations down, he firmly believes now is the moment for investors to act: “The valuations are as attractive as I’ve ever seen them in 20 years.”

But the pressure to generate immediate returns remains fierce. Cook stressed the urgency of breaking free from short-term thinking: “We have to extend our investment time horizons. I’m absolutely convinced that the returns will be there for investors that do.”

This longer view extends to technology debates too. Cook is wary of hype-driven bubbles, particularly AI, where he sees massive wasted potential. Quoting recent analysis, he points out the staggering “$8 trillion” in added market value from AI hype, contrasting this sharply with the concrete, unmet needs of the energy transition: “You know what we could do with $8 trillion in the energy transition? That is such a waste of capital.”

Cook advocates clearly where investors should look next: grid infrastructure and battery storage. Grid upgrades remain essential: “Costs were going to go up anyway…when we build the new stuff, the cheaper way to do it will be in that transition,” and battery technologies hold huge promise, despite supply chain risks.

Ultimately, Cook believes the energy transition is inevitable, though he’s blunt about the challenges ahead: “Inflation is real…[but] the cheaper way to do it will be in that transition. It’s not going away.” He leaves investors with a direct challenge: move beyond short-term gains, recognise real climate opportunities, and redirect capital before it’s too late.

Patience pays: Can it speed up the transition?

Finance has long been criticised for short-termism, but impact investing is proving that profit and purpose don’t have to be at odds. “We need to generate the returns for our clients to be happy with us. But if we can do that with the right moral lens applied, our clients should be even happier with us,” said Prince Maximilian of Liechtenstein, CEO of LGT Group and founder of Lightrock. His approach? Long-term capital, bold bets, and patient investment in the technologies shaping the energy transition.

Uncertain regulations remain a challenge. “One of the key problems of the lack of sustainability and the energy transition only being as far as it is, is, frankly, the huge weakness in our broader political and economic systems of not looking forward enough and being much too short-term oriented,” Prince Maximilian argued.

Europe’s mandatory carbon markets have been slow to develop, but “they actually [are] working remarkably well.” Meanwhile, the US approach has been more fragmented, but bolder. “The US comes way later and goes in a quite bold way,” he said. “All the Europeans feel like, ‘Hey, this is unfair.’ And the truth is, no, it’s not totally unfair. They just have been a little bit bolder, and probably we should learn from that.”

For investors, climate tech is the battleground. “Some of the most significant opportunities in the energy transition megatrend… have a strong technology component,” he said, pointing to sectors like hydrogen, storage, and AI-driven efficiency. Competitive advantage, he believes, comes from securing patents, processes, and scalable innovation.

Long-term capital allows investors to take bolder, high-impact bets—something sovereign wealth funds are already leveraging. “If you don’t have to convince shareholders every day that they shouldn’t sell your stock tomorrow, that makes life much, much easier,” he noted. “If you look at the value creation… the development of LGT relative to most of our competitors… you will see that our shareholders have not done such a bad deal.”

The transition is happening. The only question is if investors are moving fast enough.

7. Hidden emissions, real solutions: Industry’s race to clean up its act

Turning the tide on Scope 3: businesses are rewiring their supply chains, trading opacity for impact, one carbon domino at a time. *Illustration: Google ImageFX/MM*

Concrete solutions: How to build greener

The global construction industry faces a huge dilemma. It’s essential for economic growth, literally laying the foundations for modern life, but is also responsible for a staggering 37% of global carbon emissions. So can construction fuel growth without undermining climate goals?

Emre Hatem, Energy Group President and board member at Rönesans Holding, believes it can, but only if the industry tackles key barriers urgently. He identified five big hurdles holding construction back: costly green materials, limited supply, rigid regulations, reluctant consumers, and scarce sustainable financing options.

Green concrete, for example, still represents just 4% of the market. The perception of higher upfront costs also makes customers hesitant. “Most of the consumers see this as a high price tag,” Hatem explained, adding the solution lies in clearly highlighting “the long-term benefits of sustainable buildings,” such as energy and water savings.

Yet sustainability isn’t just a cost; it’s good business. Hatem notes sustainable buildings command higher rents and attract premium tenants. At Rönesans, “60% of our commercial real estate has green building certificates,” which directly translates into higher rental yields compared to competitors. He argues sustainability is “like a hedge against the future risks of the business,” protecting against tightening regulations and changing market demands.

Innovation, especially AI, is crucial to accelerating the green shift. Rönesans already leverages AI extensively, from design (optimising buildings for minimal energy consumption and emissions), to construction (using predictive tech to reduce waste by up to 20%), to smart building management through digital twins. Hatem cited a concrete example: Rönesans’ Dutch subsidiary, Ballast Nedam, is successfully piloting “full electric machines” on an entirely renewable-powered construction site in the Netherlands.

Renewable energy is equally key. Hatem said construction must focus on greening both sites and finished buildings through electrification, efficiency, and renewable power. He describes the ideal scenario: “Imagine a house which produces its own electricity from solar panels, stores electricity, charges your electric car, heats or cools itself with heat pumps, and uses AI to optimise all these activities.” According to Hatem, “Smart greenhouses are not a dream, it’s actually a reality right now.”

The sustainable future of construction isn’t decades away; it’s happening now. Companies that embrace innovation, green finance, and renewable energy will dominate the market. The foundations have been laid; the rest is up to industry leaders to build upon them.

Supply chains unchained: Taking control of hidden carbon

Scope 3 emissions, the messy, invisible carbon hidden deep in global supply chains, have become every sustainability leader’s nightmare. But could tackling them strategically unlock competitive advantage? Companies willing to tackle these emissions head-on will not only future-proof their business but turn transparency into a powerful competitive edge.

Cléa Martinet, VP Sustainability, Renault Group and Ampere, set the scene starkly: Renault’s upstream scope 3 emissions are “a bit of a jungle,” with huge variations in supplier readiness. Renault tackles this by making emissions reporting a ticket to the table. “If suppliers want future contracts,” Martinet explained, “they must have CDP approval or complete our sustainability training. Given our scale, that’s a powerful incentive.”

Joe Franses, VP Sustainability, Coca-Cola Europacific Partners, echoed the enormity of the challenge: “Scope 3 accounts for around 90% of our emissions.” For Coca-Cola, a meticulous journey from basic spend-based estimates to precise supplier-specific data is crucial. Franses believes transparency is the antidote to accusations of greenwashing: “Restating figures as data improves isn’t massaging numbers, it’s best practice.”

But gathering data is only half the battle. Matteo Battaini, Head of Sustainability at Pirelli, pointed to technology, especially AI-driven platforms, as essential for crunching supply chain emissions accurately. Battaini highlighted an industry truth: “If I don’t deliver carbon reductions, my automotive customers won’t give me business. That’s the ultimate incentive.”

For service industries, like hospitality, the scope 3 challenge looks different. Inge Huijbrechts, Chief Sustainability Officer at Radisson Hotel Group, revealed that half their scope 3 emissions come from food and beverages—highly localised suppliers needing tailored support. Rather than penalties, Radisson works closely with franchisees and suppliers, building sustainability directly into contracts.

They all agreed investor pressures had noticeably cooled, at least for now, but saw no reason to slow down. Martinet bluntly observed, “The pressure is diminishing,” noting fewer investors pushing climate accountability. Yet Franses argued this doesn’t change the fundamentals: “Regulations aren’t slowing, and climate risk isn’t disappearing. Boards know this is strategic.” Huijbrechts framed it succinctly: “It’s about resilience, longevity, and survival.”

From footprint to finish line

Adidas ships over a billion products each year from 1,500 suppliers across 30 countries, creating a vast emissions footprint. Dipjay Sanchania, director of climate and energy at Adidas, revealed that a staggering 97% of Adidas’s carbon footprint comes primarily from its supply chain, not transport or packaging, as commonly thought. The bulk (87%) is buried deeper within manufacturing processes themselves.

Sanchania, who joined Adidas after decades in the energy industry, has brought a fresh perspective. He observed a significant “knowledge gap” on the consumer side regarding energy strategies like PPAs, rooftop solar, and renewable certificates.

Adidas is tackling its emissions by first cutting energy use, then transitioning from coal boilers to cleaner alternatives such as biomass or electrification. Rooftop solar is proving especially effective in Asia, particularly China, where some suppliers now run factories entirely on renewables paired with battery storage. “Solar plus storage is very economically attractive in China,” Sanchania noted.

Despite global headwinds against sustainability, Sanchania insists Adidas’s decarbonisation is “pretty much on time,” largely because the strategies chosen already make financial sense. “We’re not working on green hydrogen or ammonia, which are fancy,” he said. Instead, the company focuses on proven, scalable tech that reduces costs while cutting carbon, like rooftop solar and efficiency measures.

When questioned about passing decarbonisation costs onto customers, Sanchania was clear: “Rooftop solar today in most countries is cost-negative, it’s saving money.” Overall, energy transition strategies only result in minor cost increases, usually “low single digits,” a price Adidas considers worth paying for meaningful carbon cuts.

Beyond greenwashing: Supply chain sustainability

How do you make a beauty brand sustainable without greenwashing? Sustainability in business used to be a box-ticking exercise. Today it’s core strategy.

Estée Lauder has been Scope 1 and 2 net zero since 2020, thanks to a wind energy investment in Oklahoma. Nancy Mahon, Chief Sustainability Officer said that “since 2020, we have made money by selling green energy back… about $5.4 million.” But Scope 3, the supply chain, is the hard part.

“We have this supply of inexpensive green energy, and we also are able to access the grid for Scope 3, which is essentially our suppliers,” Mahon explained. But getting suppliers on board isn’t easy. “You basically want to take your top 200 suppliers and make sure you have their data.”

Rather than paying for supplier decarbonisation, Estée Lauder is putting sustainability into procurement. “We want our suppliers to pay for their carbon reduction. What we want to do is essentially mainstream that as a criteria for selection.”

Beyond manufacturing, the company is also tackling hidden emissions in digital advertising. “We’ve been working with some of our advertising agencies to make sure that they are aware of their carbon footprint and that they are reducing it.”

In the US, consumers focus on their own carbon footprint, not the brand’s. “They can make choices where you can opt into one shipment instead of five shipments.” In Europe and the UK, it’s different: “Sustainable packaging, ingredient transparency, really is a table stake. Many consumers will not even look at your product unless they see those attributes.”

Among investors, “climate is number one.” But there’s a regional divide. “We certainly see many US investors still very concerned… but definitely more concern in Europe and the UK than in the US.”

Refillables aren’t one-size-fits-all. “In China, refills are considered more value. In Europe and the UK, if the big pouch is really not very attractive, they’re not as attracted to it.”

Bottom line: “Power to the people,” but brands must make it easy for consumers to choose sustainability. Mahon shows that embedding sustainability across a company demands tough decisions and trade-offs at every step. But companies that engage suppliers, educate customers, and genuinely rethink their product lifecycles will win, because sustainability is now a non-negotiable part of how successful businesses operate.

8. Fuel for thought: Transport’s tricky road to net zero

Sustainable aviation fuels are ready for take-off, but high costs and investor hesitancy still have the industry stuck on the runway. *Illustration: Google ImageFX/MM*

Biofuels: A bridge or a blind spot?

Heavy goods vehicles (HGVs) keep our economy running, but electrifying them is a tougher challenge than it sounds. Justin Laney, General Manager of Fleet at John Lewis Partnership, and Philip Fjeld, CEO of ReFuels, argued biofuels aren’t just an interim fix — they’re the smartest way to rapidly decarbonise road freight today.

Laney highlighted that electric trucks simply aren’t viable yet at scale: costs are prohibitive, infrastructure lacking, and productivity losses substantial. John Lewis Partnership, with over 500 heavy trucks, is already using biomethane extensively, achieving carbon savings of “at least 80%.” Each truck running on biomethane saves about “100 tonnes of CO₂ a year,” and crucially, the switch “saves money versus diesel,” which Laney noted is essential in the “low-margin” logistics industry.

Fjeld, whose company supplies fuel for thousands of trucks daily, reinforced that biofuels are a proven solution: “There’s more biomethane wanting to go to transport than there is transport demand.” The barriers to electrification, like limited grid capacity, are stark. Fjeld revealed that at a planned station near Swindon, securing just “one megawatt” of grid connection would cost £972,000, and “we will get that capacity in 2037. That's a terrible business.”

Despite clear industry preference for biomethane, UK policymakers remain fixated on electrification. Laney warned of a policy blind spot, cautioning that prioritising zero-tailpipe emissions can inadvertently increase carbon footprints. He explained, “On current grid mix, the gas truck is probably lower carbon than your EV,” especially when EVs charge at peak times.

The message is clear: biofuels aren’t a distraction, but a critical part of decarbonising heavy transport now, not just decades down the line. Fjeld’s call for pragmatism in policy resonated strongly: “Electrification will happen…but it will happen when it’s ready to happen, not when it is wished.”

If policymakers and industry align, biofuels could bridge the gap, ensuring vital road freight cuts emissions today without stalling the economy. The industry’s message to government? It’s time to shift gears from idealism to realism.

Aviation biofuels: Green skies stuck at the gate

Sustainable aviation fuels (SAFs) are billed as aviation’s best chance to hit net-zero targets, but high costs, limited feedstocks, and risky economics continue to hold the sector back. So, what’s needed to bridge the gap between ambition and reality?

SAFs promise to reduce “lifecycle emissions of flying by up to 80%,” according to Gabriele Bowen from Economist Impact. Yet scaling up production to match aviation’s vast demand remains challenging.

Daniel Kim, CFO at Crysalis Biosciences, laid out the stark numbers: aviation consumes about “100 billion gallons of jet fuel a year,” and SAF would need to replace nearly all of that by 2050. He described several promising SAF production methods, including “alcohol-to-jet, HEFA fuels, Fischer-Tropsch, and methanol-to-jet,” but warned that even in a best-case scenario, production could realistically reach only “30 to 35 billion gallons.” He said there’s a need to “support best-in-class for every one” of these SAF pathways rather than betting on just one.

Lahiru Ranasinghe, easyJet’s Director of sustainability, highlighted the difficulties airlines face sourcing SAF at scale. Current SAF supplies are limited mostly to used cooking oil converted via the HEFA method, but he questioned, “What happens when we hit that ceiling of the 10 billion tonnes?” He pinpointed the main challenge not as technical but financial, noting the huge upfront investment: “unlocking the investments that’s needed to build these plants” is aviation’s real hurdle, with each plant potentially costing “a billion dollars or so.”

Ranasinghe also spotlighted the competitive risks airlines face, calling it a “first-mover disadvantage” if they lock in high-priced SAF contracts early, only for competitors to get cheaper deals later. He illustrated just how tight airline margins are: “Our profit margin per seat is £6… If you had a croissant and a cup of coffee anywhere in the vicinity of this place, it would cost you more than that.”

Both called for stronger, smarter policy. Ranasinghe praised the EU’s strategy, which uses aviation’s emissions trading scheme (ETS) revenues to “close the gap, the green premium on SAF purchases,” reducing financial barriers. He also promoted an innovative policy initiative, “Project SkyPower,” which would create “a capitalised intermediary” providing revenue certainty, thus reducing investor and airline risk simultaneously.

While SAFs represent aviation’s clearest route forward today, Ranasinghe made it clear they aren’t the only solution. Airlines must also reduce overall energy consumption through innovations like “lighter paint on our aircraft” or software that “helps aircraft descend more efficiently,” which saved easyJet “around 88,000 tonnes of carbon last year.”

SAF remains aviation’s strongest card, but it’s going to take bold, coordinated action from governments, airlines, and producers to ensure this vital fuel finally achieves take-off.

9. Bandwidth vs. footprint: Telco’s balancing act

The telco sector is booming, fuelled by surging demand for data-heavy AI and 5G, but with explosive growth comes soaring energy use and bigger carbon footprints. Nilmar Seccomandi, Director of Autonomous Network and Infrastructure at Telefónica (Movistar, Virgin Media O2), laid bare the scale of the challenge, alongside strategies to tackle emissions head-on.

Telefónica alone consumes “six terawatt-hours a year,” about as much electricity as “a country such as El Salvador with six million people,” according to Seccomandi. With global mobile data traffic jumping “about 30% each year,” he explained the equation clearly: more data means more infrastructure, more energy, and inevitably, more carbon.

But Telefónica has ambitious sustainability commitments, pledging to achieve “net zero emissions by 2040,” including Scopes 1, 2, and 3. By 2030, the company aims to reach “100% renewable energy” across all markets. It’s already achieved this in “the UK, Spain, and Germany,” though Latin America remains a significant challenge.

Practical action underpins these commitments. Seccomandi showcased Telefónica’s renewable push with strategic power purchase agreements (PPAs), including an offshore wind farm in Germany’s Baltic Sea, generating “more than 500 gigawatt-hours a year,” powering around “30,000 mobile towers,” and extensive local solar projects in Brazil, generating “700 gigawatt-hours a year.” Half of Telefónica’s renewable energy today comes from PPAs.

Seccomandi also highlighted innovative energy-saving strategies. Using AI-driven solutions to manage mobile traffic, Telefónica has cut energy usage by “up to 30%” during off-peak hours at high-demand sites like Wembley and Oxford Street. Immersion cooling, a method of submerging equipment directly in cooling fluids, is another game-changer, delivering energy savings of “up to 70%.”

But as AI’s adoption grows, so do its environmental challenges. GPUs, essential processors powering AI models, consume massive amounts of energy and infrastructure space. Seccomandi said that today’s GPU-driven AI systems remain mainly “available for big companies,” but argued that the sector’s next frontier is to “democratise AI,” making it accessible and affordable for smaller businesses and individuals.

With clear targets, aggressive innovation, and strategic partnerships, Telefónica is showing the telco industry’s potential, not just to shrink its own footprint but to lead the global sustainability charge.

10. Climate action’s reality check: Leadership wanted, courage required

Across every industry, the message is clear: climate ambition is easy, but real climate action hurts. It requires investment, cooperation, and uncomfortable decisions that many are still reluctant to make.

Yet, optimism persists. Nuclear power, once feared, emerges as a key player. AI’s thirst for energy, alarming at first glance, could become the very lever needed to push policy and infrastructure reforms that have stalled for decades. Batteries and flexible smart grids are essential lifelines for the intermittent renewable future. Biofuels and sustainable aviation fuels are here, ready to bridge gaps that electrification can’t yet fill, provided governments choose pragmatism over dogma.

The risks of delay far outweigh the short-term comfort of doing nothing. Ultimately, the transition won’t be powered by technology alone, but by the courage to commit real resources now, accepting short-term costs for long-term survival.

The biggest challenge ahead is not technological — it’s psychological. The solutions exist. What’s missing is decisive leadership to unlock them. Our future depends not on waiting for change, but choosing to build it today.

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