London Climate Action Week (LCAW) 2026 arrives as ongoing shockwaves are shifting the role of sustainability in the economy and society. Geopolitical unrest, the role of clean energy in the struggle for energy security and affordability, and AI’s potential to both accelerate and hinder progress on sustainability will likely dominate discussions. No longer believing that volatility is temporary, companies are reshaping their sustainability approach to deliver business value.

All this makes sustainability-focused action a performance imperative. The companies pulling ahead are those using sustainability to sharpen their competitive edge. The sustainability pathways that enhance business performance and resilience are clear: lower costs, stronger differentiation, secure low‑carbon energy, faster innovation, digital advantage, and greater operational resilience. The ERM team in London is preparing for discussions with forward-looking leaders. Please click here to see the full program of ERM events planned.   

ERM sessions at LCAW will focus on the following four themes: clean energy, energy efficiency and decarbonization, AI’s contribution to sustainability, and the urgency of integrating nature.     

Theme 1: Clean energy as a pathway to bolster energy security and affordability 

In the quest for energy security, the promise of clean energy is increasingly attractive in fossil-fuel-importing regions like Europe and Asia.  

Globally, installed capacity for solar and wind grew by 27% and 14% in 2025, while global battery storage increased by 40%. With the Iran war supercharging the drive for energy independence, 2026 will likely exceed those numbers. Clean energy is also becoming cheaper. In 2024, the average levelized cost of energy (LCOE) for solar and onshore wind was up to 50% lower than that of the cheapest fossil-fuel-generated electricity. Fossil fuel prices have soared since then.

After being sidelined for a few years, low-carbon hydrogen is getting a fresh look. Interest in low-carbon hydrogen as an alternative feedstock for fertilizers is on the rise now that fertilizer shortages are starting to bite. The same is true for low-carbon hydrogen use in producing green steel and sustainable jet fuel.

Substantial obstacles remain. In many countries, grid capacity cannot keep up with two trends: rapid electrification, which is pushing up power demand, and the expansion of clean energy production. For example, in the Netherlands, thousands of clean energy installations are waiting in line for grid connections, while one-fifth of global data center projects face potential delay or failure due to grid congestion. Battery storage may eventually solve the grid problem, but the massive global expansion this would require reveals another Achilles' heel: critical minerals.

Supply chains for critical minerals, indispensable ingredients in batteries and other clean energy equipment, are highly concentrated, and the main players are not afraid to use their dominance to their advantage. For more on the efforts of various economies globally trying to create alternative supply chains, read our recent article “The new rules of critical minerals financing.”  

Finally, clean energy faces high upfront development costs, which can slow down or halt project development, especially when capital costs rise.  

ERM will explore this clean energy as a pathway theme during two interactive sessions at LCAW:  

  • “Are energy decarbonization, affordability, and security aligned or opposed?” 
  • “Fault lines and green lines: energy and food security, and the geopolitics of the sustainability transition.”

Theme 2: The untapped strategic potential of energy efficiency and decarbonization  

Beyond cost reductions, energy efficiency and decarbonization help mitigate dependence on fossil fuels. As geopolitical unrest keeps electricity, natural gas, and oil prices high and volatile, the number of cost-effective business cases for energy efficiency continues to grow. When advanced, these measures also reduce corporate carbon footprints.

In a recent energy efficiency report, the International Energy Agency (IEA) estimated that 75% of global companies across all sectors could collectively save US$600 billion in annual energy costs if they replicated the actions of their 25% most energy-efficient peers. Real estate is a good example. Global research assessing 46,000 buildings across eleven sectors concluded that, in a light-to-medium retrofit scenario, energy use would be reduced by 10% to 40%. Read our blog “Decarbonizing the built environment” to learn more.

Electrifying corporate vehicle fleets is also increasingly effective. At current U.S. gasoline and electricity prices, even without tax credits, the total cost of ownership for most electric cars and vans is lower than that of comparable fossil-fuel vehicles. High gasoline prices in Europe and some U.S. states make electric fleets even more attractive, since fuel costs for electric vehicles are substantially lower, even with high electricity prices. Electric cars are also getting cheaper. For more, read our blog on fleet decarbonization.  

It is also a suitable time to start looking beyond measures with short payback periods. According to the IEA’s recent energy efficiency report, companies have prioritized quick wins over deeper system upgrades so far. https://www.iea.org/reports/gaining-an-edge/unlocking-the-potential-of-energy-efficiencyHowever, on average, each deeper upgrade reduces energy costs by 5% compared to 2% for quick wins. If you include non-energy benefits, such as reduced downtime and lower raw material use, the average profitability of energy-efficiency measures doubles.

Capturing such benefits will require relentless financial quantification. As opportunities rise, so does the pressure on sustainability-related investments to demonstrate clear financial returns. Analysis and corporate-finance-grade quantification of all direct and indirect benefits are crucial to winning funding for viable business cases. See more in our blog “Quantifying sustainability - How to anchor a value-creation approach.”   

This second theme will be the focus during three interactive ERM sessions at LCAW:  

  • “Future of transport decarbonization in the context of energy affordability and security.” 
  • “Future of industrial and buildings energy sustainability in an era of energy security.” 
  • “Pharmaceutical, consumer, and manufacturing supply chains are entering a decisive phase of the decarbonization transition.”  

Theme 3: Leveraging AI for decarbonization and detecting greenwashing

The explosive growth of AI and the rising emissions it generates are well-documented. However, it is also increasingly clear that AI will play a powerful role in identifying opportunities for energy and other efficiencies, as well as mitigating the disruptive effects of climate change on business continuity. Another consequence of AI is that it will make greenwashing riskier than ever.

AI has great potential to boost corporate energy efficiency and decarbonization. Recent research estimates that AI applications will unlock US$ 600 billion per year in sustainability-related benefits by 2028, more than half from enhanced industrial and equipment efficiency.

Digital twins (DT) of existing industrial processes support decarbonization in direct and indirect ways. In the solar and wind sector, for example, AI-powered DT models reduced unplanned downtime by 35%, increased energy production by 8.5%, reduced energy costs 26%, and optimized the integration of solar, wind, and battery storage into the grid.

The automotive industry also employs DT models and AI to stay competitive and minimize waste. BMW’s new battery plant is using digital twins to plan, train, and optimize the production process, aiming for zero-defect battery production with the lowest possible raw material and energy input. ERM company emissions.AI built a digital twin for a midstream pipeline operator that will help deliver a 60% reduction in carbon emissions by 2030.

However, standardized, well-structured data is a prerequisite to effectively applying AI. Companies do not have to wait until everything is perfect, but their data architecture must be in good enough shape to ensure AI solutions deliver trustworthy results. To read more about AI data foundation requirements, read our blog “Modernizing legacy EHS systems.”

Companies need to be aware that stakeholders also use AI to check corporate sustainability claims. This has risks and rewards. If the claims do not add up, this will be quickly and harshly exposed. On the other hand, AI tends to favor well-substantiated information, raising the value of robust public data, such as sustainability reports. Greenhushing is not the answer: silence will create a vacuum that others will fill. Honesty paired with evidence is the best approach.

ERM will cover this theme in two interactive sessions at LCAW:  

  • “Good data: The missing link in AI‑driven decarbonization.” 
  • “AI is judging your sustainability claims - are you ready?” 

Theme 4: Building a nature approach that minimizes impact and increases resilience

Nature and biodiversity increasingly make their way onto the corporate sustainability agenda. Scorching heat is dropping crop yields worldwide. Water disputes increasingly stall data center projects. Companies reporting to CDP anticipate nearly US$1 trillion in losses, or US$40 million per company, due to production slowdowns caused by extreme weather. And 55% of global GDP is estimated to be moderately to highly dependent on nature and ecosystem services.

Companies increasingly realize that acting on nature, for example, by implementing water-efficiency policies and taking action on biodiversity preservation, is about business resilience, not just reducing impact. The growing popularity of the Taskforce for Nature-related Financial Disclosures (TNFD) framework is a good indicator. According to recent research, about 9 in 10 large global companies with mature sustainability reporting mention the TNFD framework in their disclosures.

However, just 26% in the same group follow all the TNFD recommendations, which include setting concrete targets for water, biodiversity, and ecosystem preservation. Similarly, only 35% of companies reporting to CDP list extreme weather as a material financial risk despite anticipating substantial future damage. In practice, many companies still underestimate their exposure to disruptive impacts from nature, as well as their dependence on healthy ecosystems for commercial success.

This poses a substantial risk to future business resilience. Currently, the 14,000 companies that make up the S&P Global BMI index fully degrade 0.7 hectares of pristine nature for every US$1 million in revenue they generate. To pivot to a more sustainable path, corporate awareness of the importance of nature needs to accelerate and be translated into decisive action.

Some sectors that have been forced to confront this reality early could serve as trailblazers. Faced with rising community and political resistance to mega data centers that compete for local water resources, tech companies have adopted aggressive water targets and are investing heavily in water-efficient technologies. For more, read our blog “Community permission: the new critical path for U.S. data center delivery.”

Critical minerals mining is another sector in which project success is closely tied to proactively mitigating mining’s negative impacts on nature and to considering community needs. Projects that fail to do this are more likely to struggle with permitting and access to capital, resulting in costly delays or project failure. For more on nature- and community-conscious mining, read our report ”Mission Critical: Resilient mines for a modern society.”  

This final theme will be explored in two interactive ERM sessions at LCAW: 

  • “Can mining support the energy transition while protecting nature?”  
  • “Can nature and climate resilience pay back—now?”  

Conclusion 

External pressure is transforming sustainability into an indispensable pillar of business strategy for managing volatility, strengthening competitiveness, and enhancing resilience. To reap the full benefits, companies should integrate sustainability across the organization, robustly quantify sustainability-related risks and opportunities, and leverage AI's analytical capabilities to capture them. However, the journey is challenging, and each company must follow its own pathway. ERM meets companies where they are and helps them chart their unique course. I am looking forward to discussing with other leaders at LCAW what the next phase will look like.