A unique opportunity for change in the energy sector

A unique opportunity for change in the energy sector 3 Environmental considerations are not new in the energy industry, but often were not given investment priority. However, 2020 looks to be a tipping point, with the industry encouraged by its stakeholders to increase funding in, or launch, business models which have the potential to transform the energy sector. In Citi’s view, there is no going back: with respect to wrapping environmental initiatives tightly into the business, the “new normal” has arrived. A catalyst for change For all industries, supply and demand imbalances throughout the value chain in 2020 highlighted inefficiencies and structural weaknesses in norms such as “just-in-time” delivery, and even opportunistic purchasing from non- strategic suppliers. These traditional business approaches were tested in a world suffering lockdown-induced demand destruction. A unique opportunity for change in the energy sector The COVID-19 pandemic and resulting demand destruction, along with the unusual changes in crude prices through 2020, triggered an acute economic shock across the energy sector as it has for many other industries. These events have enabled strategic, company specific, approaches to environmental initiatives.

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