The global energy transition is entering a new phase, in which reducing carbon emissions remains a key priority but is no longer the sole objective. Energy security, infrastructure resilience, access to critical raw materials, and adaptation to the impacts of climate change are emerging as equally critical factors in the design of business and investment strategies.
According to Bain & Company’s annual Global Energy and Materials Outlook 2026 report, rising demand for electricity, supply chain constraints, and diverging energy policies across countries are creating a more complex and fragmented environment. Within this context, companies are being called upon to reassess their investment priorities, placing greater emphasis on resilience, operational flexibility, and long-term energy security.
Although Artificial Intelligence and data centers currently dominate the energy conversation, Bain estimates that the increase in electricity demand will stem primarily from broader structural trends, such as the growing use of cooling systems in developing economies, the electrification of buildings, and the gradual electrification of industrial production.
At the same time, the report notes that the impacts of climate change will continue to intensify in the coming decades, regardless of the pace of the energy transition. As a result, adapting to new climate conditions and strengthening the resilience of energy infrastructure are emerging as strategic priorities for businesses and investors.
Using the Intersect℠ model, Bain analyzes three possible scenarios for the evolution of the global energy system through 2040. Despite their differences, all highlight a common challenge: How can growing energy demand be met while ensuring economic sustainability, the reliability of the energy system, and the reduction of carbon emissions?
Three possible scenarios for the energy system by 2040
To capture the different developments that could shape global energy markets, Bain & Company has developed three alternative scenarios through 2040:
- Continuation of current trends: Energy security and geopolitical balances continue to drive investment decisions, slowing the transition to decarbonization. In this scenario, fossil fuels continue to account for approximately 72% of the global energy mix by 2040.
- Divergent regional trajectories: Policies and investment priorities vary across markets, leading to uneven rates of adoption of low-emission technologies. In this scenario, fossil fuels account for approximately 67% of the energy mix.
- Accelerating the transition: Greater convergence in policy, trade, and investment accelerates the development of low-carbon technologies, limiting the share of fossil fuels to around 52% by 2040.
Despite their differences, the three scenarios reach a common conclusion: electrification will be the key driver of the global energy system’s transformation in the coming decades. Industry and buildings are expected to remain the largest energy consumers, accounting for the bulk of future demand.
The four forces reshaping investment decisions
Regardless of how the energy transition unfolds, Bain & Company identifies four developments that are expected to significantly influence corporate strategic planning and investment decisions in the coming years.
- Rising energy demand is putting pressure on infrastructure
The significant increase in electricity consumption through 2040 is expected to intensify pressure on transmission and distribution networks. In this environment, energy-intensive businesses may turn to solutions such as on-site power generation, microgrids, and storage systems to enhance their energy security and reduce their exposure to supply risks.
- Critical raw materials are taking on strategic importance
Access to raw materials such as copper, nickel, lithium, and cobalt is emerging as a critical factor for the development of low-carbon energy infrastructure and technologies. Supply constraints, delays in permitting, and geopolitical shifts may exacerbate imbalances between supply and demand, making the resilience and geographic diversification of supply chains a strategic priority.
- Natural gas and nuclear energy remain part of the energy mix
Despite the continued growth of renewable energy sources, natural gas continues to play a significant role in ensuring the reliability and flexibility of energy systems. At the same time, nuclear energy is returning to the forefront, as many countries seek stable, low-carbon sources of electricity generation. Its further development will depend largely on the commercial maturity and cost reduction of small modular reactors (SMRs).
- Resilience to climate change is emerging as an investment priority
The increasing exposure of businesses to extreme weather events, water scarcity, and pressures on critical infrastructure elevates the role of resilience in business planning. Adapting to climate change is no longer just a matter of compliance, but a fundamental prerequisite for effective capital allocation, strengthening resilience, and protecting the long-term value of investments.
Resilient investment strategies in an environment of heightened uncertainty
The report emphasizes that companies need to focus less on predicting a specific scenario and more on developing investment strategies that can create value under different market conditions.
This requires strengthening the resilience of supply chains for critical raw materials, investing in infrastructure and energy security, and increasing operational flexibility. At the same time, companies are called upon to strategically evaluate merger and acquisition (M&A) opportunities that can enhance their access to critical infrastructure, resources, and available network capacity.
As access to energy, raw materials, and infrastructure becomes increasingly important, these factors are expected to influence business competitiveness just as decisively as traditional financial criteria.
Commenting on the report’s findings, Andreas Kyriilis, Senior Partner at Bain & Company Greece, stated: “The energy transition is entering a new, more complex phase, as it is simultaneously influenced by growing energy security demands, the need to adapt to climate change, and constraints on the availability of critical resources. In this environment, success will not depend on the ability to predict a single scenario for the future, but on the ability to formulate strategies and investment choices that remain resilient across different scenarios. Organizations that combine disciplined capital allocation, operational flexibility, and a long-term strategic orientation will strengthen their competitiveness in the coming years.”