The Future Energy Leaders (FEL) Finland’s key task is to fuel change in the energy sector and give the perspective of emerging professionals, by asking questions and challenging the status quo. The program members hosted a speech at WEC Finland’s Energipäivä 2022, where they shared their views on urgent changes needed in the sector. Here is a full transcript of the speech:
Dear energy leaders of today – including all of you executives, managers, advisors, policy-makers, and influencers steering this vital business – Why did you choose to work in this industry?
Maybe some of you wanted to engineer the marvels of infrastructure that provide our society warmth, comfort, health and motion. Others perhaps sought to be part of the challenge of harnessing nature’s power via technology. Many already cared about the environment and saw the energy sector as a chance to protect it. Someone wanted to shape policy in an area that is so important for our society. And realistically, for many, it was a rational choice, as working in a rather stable, maybe even a tad boring sector provides some kind of personal security, perhaps supporting dreams and ambitions beyond the field of energy.
Since you’ve made that choice, some values and pressing issues of our society have changed. Many Future Energy Leaders chose the industry to make an impact on something that mattered. An impact on society. An impact on the environment. An impact on the economy.
For most of us, one of the drivers was helping ensure a livable place for future generations, preserving nature and biodiversity, something that has dominated the discourse for all of our lives and that we never took for granted.
Of course, the initial push for joining the sector differs between us as well, as we come from a wide variety of educational, national and professional backgrounds. But most of us agree that, even if the environmental crisis and the green transition weren’t everyone’s initial reason to join, as our understanding of the sector and its impact has grown, so has our realisation of how dire the situation is. We believe we are in the right place to make a change – irrespective of what drove us here. Our craving for change grows not only with every report we read but with every record temperature, every unprecedented natural disaster, and every species wiped out from the planet.
But even if we see that we are in the right place to make that change, change does not always materialise.
While the energy industry is the building block the rest of society relies on, it has and still is contributing to droughts in Southern Europe, floods in Pakistan, lung cancer in China, and wars in the Middle East. Directly and indirectly, it has caused tragedies we are not proud of.
We know it’s more complicated than that. Europe and large parts of the industrialised world have enjoyed the benefits of abundant cheap energy for decades, helping many firms and our society amass wealth. Increasing energy consumption resulted in rising profits for energy companies and given a good track record for energy leaders, advancing many into halls of power.
But, as the saying goes, with great power comes great responsibility. The images we see from around the world are a daily reminder of the damage we are making.
While global warming was emerging as a lingering threat – one IPCC report after the other – decision-makers kept subsidising and encouraging fossil fuel consumption and inefficient energy use. We’ve become increasingly reliant on oil, gas, and coal provided by authoritarian regimes because it was the most profitable thing to do. For leaders, it has been easy to hide behind lofty and distant goals: double renewables by 2030, fossil-free in 2035, net-zero in 2050. Even in the 2010s, despite continuous demands from scientists, the energy sector lobbied for an unchanged operational environment for a couple of more decades before, as the story was told, new technologies would suddenly solve the problems.
But the transition doesn’t happen in a month, a year, or, sadly, a decade. It is a process that takes trial and error. And all the time we waste by not taking action will hit us back. In fact, it has already: we have not been able to cool down the nuclear plants with seawater or, ironically, ship coal via rivers due to Europe’s hot and dry summer. People and animals have died from extreme heat waves.
The risks of maintaining the status quo in the energy industry are not limited to the environment. There is a prevalent culture of homogeneousness among the energy sector’s workforce. Leaders have been unwilling to tolerate people with different backgrounds and mindsets.
Open intolerance may be a thing of the past, but veiled discrimination can still take the form of everything from not recruiting a woman, especially in her early thirties, or not promoting someone with an international background who has not taken the same courses by the same professors in the same university.
How many anthropologists, social scientists, psychologists or designers do you have in your organisation? How many persons with disabilities have you hired in the past ten years? Which skills are actually required for the job, and which ones are meant to rule out some applicants? Then we wonder why we don’t see a diverse range of applicants to start with.
When we look into decision-making, the hegemony can be even more pronounced. How often do you ask a junior employee if they have another angle on the topic? Are you delegating meaningful tasks to less experienced professionals? Giving them challenges and opportunities to grow? Do we have diversity in the leadership team, board members, and other people making relevant decisions?
The tendency to recruit and promote people with similar profiles fosters confirmation bias leading to, what we like to call, collective delusion. Groupthink is comfortable in the short term but leads to misjudgement in the long term, as it increases the likelihood of repeating the past even if the world around you is evolving fast. Who doesn’t remember the Kodaks, Firestones, and others who were once leaders but failed to adapt? What about diversifying from Russian gas after the invasion of Crimea? No one saw that coming.
Over time, decision-makers in the energy sector have built structures and practices that are ill-fitted to adapt to new ways of thinking. Risk aversion is embedded in the way we evaluate new projects. We tend to think that all outcomes are predictable, provided that the correct inputs are chosen. But if the results don’t deliver the required returns, or if past data do not back them up, we don’t risk investing. We can add a lot of contingency and choose only bullet-proof investments, all by the book. But that is a recipe for 4 degrees warming. We should remember that the low-hanging fruits are already picked. We must go beyond and navigate uncharted waters, if that is what it takes.
Corporate bureaucracy can also be a problem: it’s not unusual that processes and structures stop serving the purpose they were created for and start perpetrating themselves just because “it has always been done this way” and “it has never gone wrong”. Then, a leader should know that we won’t be ready to embrace new ideas and ways of working. Everybody talks about “agility”, but a competent leader should have the courage to remove barriers to move fast, pivot and think anew.
Many corporations have published decarbonisation goals and diversity initiatives to polish their image. Often, however, these initiatives have little flesh around the bones. The initiatives can be rightfully labelled green or pinkwashing if the organisation does not truly renew its structures and engage in painful discussions on how to change behaviours.
We know it is hard. Leaders are, of course, only human: wanting a sense of belonging and fearing what others might think can prevent us from making the right choices.
But even if it is hard, there are heavy reasons why leaders need to change the paradigm of how they run the industry. The climate crisis, changes in world politics, and the rise of social media simply make it impossible to conduct business in the old, monolithic and linear way.
Easy to state in a speech, harder to do, right? But, we have some suggestions on what to think about at least.
Firstly, we need to stop thinking the only way forward is to keep growing and consuming more. Our society and economy are built on growth, but growth as such is not the only goal. Our lifestyle is incompatible with the planet’s limits, yet a large fraction of the population needs to be lifted from poverty and raised to a decent living standard. Leaders must transform their businesses to embrace resource efficiency and circularity to solve this conundrum. How can we do more with less? Are companies prepared to decouple growth from resource and energy consumption? Most importantly, we must prioritise investments that help save the planet and stop money from flowing to fast returns but low-impact projects.
By now, it should be clear that ALL – and we repeat ALL – available technologies to decarbonise the energy sector are needed. We also need ALL types of people to develop these technologies and businesses. Diversity in recruiting should not be about trying to fill some mandated quota; it should be about ensuring we secure all the skills we need to reinvent the energy industry. Making the industry more appealing to young people goes beyond securing labour and future revenues; it’s a question of how much the average temperature will rise in 30, 50, or 100 years.
We cannot hide the fact there’s a lot of uncertainty as we move into uncharted waters. We must navigate an ever-changing, multi-faceted storm, an economic, societal and environmental crisis. Therefore we call on you to embrace the fact that there will be no one perfect solution. Not moving forward will for sure lead to withering. Perfect is the enemy of good.
The energy sector needs bold leaders that make courageous decisions. It’s not only about taking more risk: it’s about questioning the decisions we make when it comes to resource allocation, new investments, company policies, and recruitment. With new eyes. We shall dare to look beyond the traditional bottom line and stand up to the challenges that the energy transition presents to us.
Unfortunately, to make a change, a leader has to endure discomfort. In addition to her own discomfort, the leader has also to manage the discomfort of others. All learning happens outside the comfort zone. Humility ahead of the unknown. The sooner we admit we are wrong, the quicker we learn.
Followers react to market trends, regulations, and competition. They stick to their comfortable path, trying to enjoy a “free ride”. Maybe try something new, but with low conviction, keeping it hanging. With the best luck, they will always be behind. Most likely, they will fail. Leaders, on the other hand, dare to make big moves, accelerate when others are slowing, be brave to quit poor initiatives, and pivot. Start from scratch, disrupt. So, I’m asking you all, do you want to take a shot and have a chance to stand out, or would you settle for the average? We Future Energy Leaders are quite sure of what we will choose.
And finally, a short piece of advice on how to know if you are on the right path: Only once you are a little bit terrified over the boldness of your strategy, you’re building something meaningful.
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