Environmental campaigners have frequently warned that a race to return to “business as usual”—with companies and countries scrambling to escape the recession wrought by coronavirus stagnation—could come at the detriment of climate change goals.
So here may be some good news: a report from Deloitte this week says that companies are largely staying the course toward decarbonization despite suffering pandemic disruption.
The report, based on interviews with 600 executives and managers worldwide, says that “despite current economic challenges, energy and industrial leaders are expected to remain committed to their long-term plans to reduce fossil fuel reliance.”
Admittedly, the statistics Deloitte cites lend little weight to its assertion. The accounting group’s headline figure shows 89% of respondents have developed or are developing a strategy to reduce reliance on fossil fuels—a fact that offers little insight into how these plans will be affected by the pandemic. When it comes to oil and gas companies, too, Deloitte says most do not have a renewables plan “per se.”
The fossil fuel industry’s moves to “reduce fossil fuel reliance” is geared primarily at cutting fossil fuels from their own operations but, even then, only 49% of oil and gas companies intend to do so.
Other groups are less bullish on the future of the green energy transition. This week, the International Energy Agency warned that energy investment—including spending on R&D—is set to slump 20% this year, down almost $400 billion compared to last year.
“The slowdown in spending on key clean energy technologies also risks undermining the much-needed transition to more resilient and sustainable energy systems,” IEA director Fatih Birol said.
But Deloitte’s report does account for a short term “pause” in spending on new technologies. The consultancy wagers investment in the sector will return in the long run because, ultimately, better tech means lowers costs.
Lower costs are ultimately what will continue to drive the energy transition towards greener pastures, too, as the price of renewable energy continues to decline. Industrial consumption of polluting energy, Deloitte says, will naturally decline as cheap renewables ease utility networks off of fossil fuels.
In the U.K., in fact, the pandemic slowdown has provided a testing ground for the national grid’s transition to clean energy, as Fortune’s Katherine Dunn reports. The grid has gone over 46 days without burning coal during the pandemic, as coal proves too expensive relative to decreased power demand.
But, of course, it’s the return to higher levels of demand that will test the resolve of companies pledging to transition from fossils. Here, even Deloitte seems uncertain, concluding: “The coming months will likely show how enduring these innovations may prove.”