KPMG: ENRC Leaders Turn to AI for Growth and Efficiency

Energy natural resources and chemicals (ENRC) leaders are indicating a strategic change towards artificial intelligence to improve efficiency and promote growth, a move that could have direct implications for the manufacturing sector.

According to KPMG’s 2025 Global ENRC CEO Outlook, confidence in the mid-term prospects for the energy sector has risen, which could suggest a more stable operational environment for manufacturers reliant on its output.

The report highlights that, even as geopolitics, inflation and regulation remain points of concern, leaders are focused on supply chain resilience, AI integration and the effects of climate risks.

CEO confidence and market strategy

Confidence in industry growth among ENRC leaders has seen a notable increase to 84% up from 72% the previous year according to the report.

Executives identify sustained demand for both fossil fuels and renewables alongside innovation in storage, smart grids and carbon capture as foundations for this positive outlook.

While optimism for individual company growth has taken a slight dip, the overall industry confidence could signal a reliable energy supply for manufacturing operations.

Anish De, Global Head of Energy, Natural Resources and Chemicals at KPMG International, explains in the report: “In uncertain times ENRC companies are looking to balance growth with cost efficiency satisfying rising energy demand whilst managing the transition to cleaner energy resources.”

This balancing act is critical for manufacturers who require both cost-effective energy and a clear path to decarbonisation. The report also notes a change in acquisition strategies with a move away from high-impact mergers.

The data shows just 36% of CEOs expect to pursue "high-impact" acquisitions in 2025, down from 58% in 2024, while 55% anticipate "moderate" deal activity, a rise from 38% last year.

AI investment driving industrial efficiency

The integration of artificial intelligence has moved from a tangential experiment to a central component of corporate strategy in the ENRC sector.

According to KPMG’s data, almost two-thirds (65%) of CEOs now identify generative AI as a top investment priority. Further to this, 72% of these leaders plan to direct between 10-20% of their budgets toward AI within the next year.

Shreyansh Upadhyay, Lead of Global AI for ENRC at KPMG International, says: “AI is fundamentally reshaping the oil and gas sector by unlocking transformative gains in productivity, accuracy and efficiency across both core operations and enterprise functions.”

"From optimising drilling and reservoir performance to maximising profitability in refining and renewable assets and streamlining supply chains and finance, AI empowers faster, data-driven decisions that reduce risk and create sustainable value. It’s not just automation; it’s the foundation for smarter, more agile and future-ready operations.”

The applications and efficiency gains seen in the ENRC sector could provide a roadmap for manufacturers looking to implement AI on the factory floor and across their own supply chains.

However leaders also recognise implementation barriers, including:

• Ethics concerns (55%)
• Fragmented data systems (49%)
• Regulatory complexity (47%)

Gillian Morris, Lead of Global Chemicals at KPMG International, advises: “When it comes to AI, companies should design a suitable governance framework over how they use AI agents and data, to ensure they stay aligned with ethics and international law.”

Navigating ESG and net-zero goals

Sustainability is increasingly being integrated into the core business strategy of ENRC companies, which directly impacts manufacturers’ ability to meet their own ESG targets.

KPMG’s findings show that 72% of ENRC CEOs confirm that sustainability is now embedded within their corporate strategy.

This alignment is crucial for manufacturers, as the decarbonisation of their energy supply is fundamental to reducing Scope 2 and 3 emissions.

Mike Hayes, Lead of Global Climate Change, Decarbonisation and Renewables at KPMG International, states: “Energy and the energy transition remain absolutely critical to the sustainability and climate agenda.”

"Access to renewable electricity, in particular to help meet growing data centre demand, requires substantial upgrades of grids and an easing of permitting in regions like Europe to get projects off the ground. This calls for collaboration between corporates and government.”

A majority of CEOs (82%) believe AI can support emissions reduction and optimise energy use, while 74% see its potential in boosting climate risk analytics.

AI is becoming a key tool for managing the energy transition, yet success depends on securing high-quality data and strengthening ESG governance to ensure AI initiatives produce measurable results rather than remaining pilot projects.