The Energy Transition Is Accelerating: The Rest Is Noise
María Mendiluce
This article was first published in Forbes.
A contradiction has been unfolding in the UK’s media. While floods were ravaging Valencia and fires devoured swathes of California, the nation’s newspapers filled their pages with editorials opposing climate action and renewable energy in particular. And this media trend can be noted around the world. Political noise has been drowning out scientific clarity, and yet, the Earth is burning hotter.
2024 was the warmest year on record, with global temperatures exceeding 1.5C for the first time over a 12-month period. While this spike isn’t a breach of the Paris Agreement limit, which is set against a 10-year average, it represents a red flag that the consequences of inaction are no longer theoretical and that every fraction of a degree matters.
The cost of doing nothing is here, and businesses are feeling it. In Germany, the 2021 floods inflicted $1.4 billion in damage to railways, halting the movement of goods and disrupting supply chains. In California, previous wildfires forced PG&E into bankruptcy, saddling them with $30 billion in liabilities. Drought in 2022 reduced the capacity of Sichuan’s hydropower generation by 20 per cent, forcing Toyota and Foxconn, who were reliant on this supply, to halt production at their plants. Now, the currently burning Hollywood fires are set to cost insurers $20 billion in damages.
These examples are increasing, reminding us that climate change is not just an environmental issue—it is an economic one. The World Economic Forum estimates that climate impacts have cost the world $3.6 trillion since 2000. These rising costs underscore the urgency of action, not just to protect the planet but to protect economies and livelihoods.
Relying on the energy status quo is not just risky; it is reckless. Under current trajectories, businesses face cascading risks to their operations and supply chains from climate impacts. Unchecked warming could put 5% to 25% of net operating income at risk by 2050, depending on the sector and geography. Infrastructure-heavy industries are particularly exposed, from energy to transportation to agriculture.
But these numbers only capture the direct costs. The ripple effects—job losses, higher consumer prices, and economic instability—will disrupt communities and erode public trust. For businesses, the damage to communities, and to suppliers and clients being unprepared for climate risks is much more costly than the physical impacts on their own assets.
Many businesses are right now grappling with unprecedented political and economic uncertainty, navigating complex regulatory landscapes while dealing with the immediate impacts of climate disasters. It is a difficult time to speak up when there is unpredictability about the way forward in a noisy, polarized political debate.
This doesn’t mean the energy transition is stalling. The tools to prevent further damage are already here. Renewables have emerged as the cheapest source of energy in most of the markets. Batteries and electric vehicles are rapidly becoming competitive. Innovations in clean technology are scaling up, offering a pathway to replace fossil fuels and build more resilient supply chains.
Thousands of companies are already moving in this direction. Over 18,200 businesses are taking climate action through initiatives like the Science Based Targets and the SME Climate Hub. More than 260 have committed to phasing out unabated fossil fuels. These are not symbolic gestures. They are pragmatic strategies grounded in the understanding that the energy transition is not just good for the planet—it is good for business.
This year, hundreds of countries will also update their climate plans (NDCs), setting the course for the next five years. These plans must be investible in order to accelerate competitive clean-energy and nature-positive economies.
For businesses, the risks and opportunities are equally high. China’s electric vehicle (EV) market stands as a global success story, demonstrating how bold investment and innovation can drive rapid decarbonization. Beijing’s official target, set in 2020, for EVs to account for 50 per cent of car sales by 2035, will be achieved 10 years ahead of schedule. This is disrupting the automotive market, reducing imports of European and American cars to China and expanding Chinese exports of affordable EVs to the world. China’s BYD reported 1.76 million EV sales in 2024.
The Chinese EV boom shows how scaling up clean technologies can deliver both economic and environmental benefits. It has created millions of green jobs, reduced reliance on imported oil, and significantly lowered urban air pollution in major cities. Moreover, the innovations emerging from China—such as breakthroughs in battery technology and cost-effective production—are shaping global trends, making EVs more viable worldwide. This success underscores the potential for transformative change when industries and governments align on climate action.
It is clear the cost of inaction for business will be devastating. Conversely, early movers stand to gain a competitive edge, from lower energy costs to stronger brand loyalty.
This is not about politics. It is about the chance to thrive in a changing world. The same technologies that reduce emissions also create jobs, stabilize supply chains, and boost economic resilience. The transition to clean energy is not a burden—it is an opportunity.
2025 has only just begun, but the news already reminds us of what is at stake. Every fraction of a degree matters, and every decision—whether in boardrooms or government cabinets—will make a difference. The shift from fossil fuels to clean energy is a reality, with multiple benefits in terms of energy security and economic prosperity.
Politicians will argue. Editorials will continue to divide. But beyond this is a simple truth: the energy transition is progressing rapidly; the rest is noise.