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The global energy system fuels modern economies, societies, and daily life. It provides electricity, heat, and mobility to billions of people, underpins critical infrastructure, and represents a multi-trillion-dollar sector that touches every other industry. Yet it is also a major driver of nature loss — contributing to around 10% of global biodiversity decline, disrupting freshwater and marine ecosystems, and driving land-use change and pollution across its vast value chains.
The very foundations the energy system depends upon stable climates, clean water, healthy ecosystems, and resilient communities. These are under increasing pressure from current practices which creates profound risks for utilities, generators and investors.
But transformation is both possible and urgent. With the right strategies, the energy sector can pivot from being a source of systemic nature risk to a powerful enabler of a resilient, low-carbon, and nature-positive future.
The energy system is at the heart of global development and decarbonisation. Fossil fuels still dominate today’s mix, but renewables are rapidly scaling, with their share of electricity generation projected to rise from 29% in 2020 to over 60% by 2030 and nearly 90% by 2050. This transition is essential to achieving climate goals — yet across both fossil and renewable supply chains, the sector exerts profound pressures on land, water, and biodiversity.
Energy companies face growing scrutiny from regulators worldwide. The EU’s Corporate Sustainability Reporting Directive, global ISSB standards, and the TNFD framework all require businesses to measure and disclose their dependencies and impacts on nature. Combined with national energy and biodiversity policies, this creates a powerful policy signal for the sector to act.
The global energy mix is shifting. While fossil fuels still dominate, renewables are projected to provide nearly 90% of electricity by 2050. Managing this transition while ensuring affordable, reliable supply is one of the sector’s greatest challenges. Poorly planned expansion risks land conflict, water stress, and biodiversity loss, but well-designed strategies can deliver both security and sustainability.
Energy is both a driver of climate change and highly dependent on healthy ecosystems. Fossil fuel combustion remains the leading source of greenhouse gas emissions, while hydropower, thermal plants, and transmission networks rely on water, land, and stable weather systems to operate. Without integrating nature into transition planning, climate and biodiversity goals risk being undermined.
From fuel extraction to wind turbines and solar panels, the energy system is resource-intensive. Mining for critical minerals, constructing infrastructure, and expanding grids all create significant pressures on land, water, and biodiversity. Companies that adopt circular models, strengthen supply chain traceability, and prioritise low-conflict siting will reduce risk and gain competitive advantage.
If left unaddressed, sector challenges will continue to disrupt energy security, drive up costs, and undermine the sector’s ability to deliver a stable and sustainable transition.
The expansion of energy infrastructure — from mines and pipelines to solar farms and transmission lines — often competes with natural ecosystems. Poorly sited projects can fragment habitats, erode biodiversity, and increase conflict with local communities.
Energy systems depend heavily on water, whether for cooling in thermal plants, hydropower generation, or processing fuels and minerals. Over-abstraction, altered river flows, and discharges of heated or polluted water all pose risks to ecosystems and long-term supply.
The energy transition requires vast amounts of metals and minerals for turbines, panels, batteries, and grids. Unsustainable extraction can cause deforestation, pollution, and social conflict, leaving companies exposed to reputational, regulatory, and supply chain risks.
If managed well, the energy transition can strengthen resilience, unlock new sources of value, and position the sector as a driver of both climate and nature solutions.
Projects that prioritise low-conflict siting and integrate biodiversity safeguards are more likely to gain community support, face fewer legal challenges, and move through approval processes more quickly.
Embedding circularity and efficiency into supply chains — from recycling metals to extending asset life — can cut material costs, reduce exposure to volatile markets, and limit environmental liabilities.
Investors and lenders are increasingly directing finance toward companies with robust climate–nature strategies. Demonstrating strong performance on nature can open doors to sustainable finance, de-risk portfolios, and strengthen long-term competitiveness.
New models such as agrivoltaics, floating solar, offshore wind designs that enhance marine habitats, and smart grids create opportunities to expand generation while delivering positive environmental outcomes and new revenue streams.
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